DRAFT 10/4/96
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CREDIT AGREEMENT
among
GULFSTREAM DELAWARE CORPORATION,
CERTAIN LENDERS,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent,
Dated as of October __, 1996
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . 19
SECTION 2. TERM LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1 Term Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.2 Repayment of Term Loans . . . . . . . . . . . . . . . . . . . . . 19
2.3 Proceeds of Term Loans. . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS . . . . . . . . 20
3.1 Revolving Credit Commitments. . . . . . . . . . . . . . . . . . . 20
3.2 Proceeds of Revolving Credit Loans. . . . . . . . . . . . . . . . 21
3.3 Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . 21
3.4 Participating Interests . . . . . . . . . . . . . . . . . . . . . 22
3.5 Procedure for Opening Letters of Credit . . . . . . . . . . . . . 22
3.6 Payments in Respect of Letters of Credit. . . . . . . . . . . . . 22
3.7 Swing Line Commitment . . . . . . . . . . . . . . . . . . . . . . 23
3.8 Participations. . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT . . 25
4.1 Procedure for Borrowing . . . . . . . . . . . . . . . . . . . . . 25
4.2 Repayment of Loans; Evidence of Debt. . . . . . . . . . . . . . . 25
4.3 Conversion Options. . . . . . . . . . . . . . . . . . . . . . . . 26
4.4 Changes of Commitment Amounts . . . . . . . . . . . . . . . . . . 27
4.5 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . . 27
4.6 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . 28
4.7 Interest Rates and Payment Dates. . . . . . . . . . . . . . . . . 29
4.8 Computation of Interest and Fees. . . . . . . . . . . . . . . . . 29
4.9 Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.10 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.11 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . 30
4.12 Letter of Credit Reserves . . . . . . . . . . . . . . . . . . . . 31
4.13 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 32
4.14 Obligations Absolute. . . . . . . . . . . . . . . . . . . . . . . 32
4.15 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.16 Participations. . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.17 Inability to Determine Interest Rate. . . . . . . . . . . . . . . 33
4.18 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . 33
4.19 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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4.20 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . 36
4.21 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 38
5.1 Corporate Existence; Compliance with Law. . . . . . . . . . . . . 38
5.2 Corporate Power; Authorization. . . . . . . . . . . . . . . . . . 38
5.3 Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . 39
5.4 No Legal Bar. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.5 No Material Litigation. . . . . . . . . . . . . . . . . . . . . . 39
5.6 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . 40
5.7 Investment Company Act. . . . . . . . . . . . . . . . . . . . . . 40
5.8 Federal Regulation. . . . . . . . . . . . . . . . . . . . . . . . 40
5.9 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.10 No Burdensome Restrictions. . . . . . . . . . . . . . . . . . . . 41
5.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.12 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.13 Ownership of Property; Liens. . . . . . . . . . . . . . . . . . . 41
5.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 42
6.1 Conditions to Effectiveness of this Agreement, Initial Loans
and Letters of Credit . . . . . . . . . . . . . . . . . . . . . 42
6.2 Conditions to All Loans and Letters of Credit . . . . . . . . . . 45
SECTION 7. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 46
7.1 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 46
7.2 Certificates; Other Information . . . . . . . . . . . . . . . . . 48
7.3 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . 49
7.4 Conduct of Business and Maintenance of Existence. . . . . . . . . 49
7.5 Maintenance of Property; Insurance. . . . . . . . . . . . . . . . 49
7.6 Inspection of Property; Books and Records; Discussions. . . . . . 49
7.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.8 Additional Subsidiary Guarantors; Stock Pledge. . . . . . . . . . 51
SECTION 8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 52
8.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.2 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . 53
8.3 Limitation on Contingent Obligations. . . . . . . . . . . . . . . 55
8.4 Prohibition of Fundamental Changes. . . . . . . . . . . . . . . . 55
8.5 Prohibition on Sale of Assets . . . . . . . . . . . . . . . . . . 55
8.6 Limitation on Investments, Loans and Advances . . . . . . . . . . 56
8.7 Limitation on Capital Expenditures. . . . . . . . . . . . . . . . 57
8.8 Maintenance of Interest Coverage. . . . . . . . . . . . . . . . . 58
8.9 Maintenance of Current Ratio. . . . . . . . . . . . . . . . . . . 58
8.10 Maintenance of Leverage Ratio . . . . . . . . . . . . . . . . . . 58
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8.11 Limitation on Restricted Payments . . . . . . . . . . . . . . . . 59
8.12 Transactions with Affiliates. . . . . . . . . . . . . . . . . . . 60
8.13 Foreign Exchange Contracts. . . . . . . . . . . . . . . . . . . . 60
8.14 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10. THE ADMINISTRATIVE AGENT; ISSUING LENDER. . . . . . . . . . . . 64
10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . 64
10.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . . . 64
10.4 Reliance by the Administrative Agent. . . . . . . . . . . . . . . 65
10.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . 65
10.6 Non-Reliance on Administrative Agent and Other Lenders. . . . . . 65
10.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.8 Administrative Agent in its Individual Capacities . . . . . . . . 66
10.9 Successor Administrative Agent. . . . . . . . . . . . . . . . . . 66
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . 67
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . 69
11.4 Survival of Representations and Warranties. . . . . . . . . . . . 69
11.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . 69
11.6 Successors and Assigns; Participations; Purchasing Lenders. . . . 71
11.7 Adjustments; Set-off. . . . . . . . . . . . . . . . . . . . . . . 73
11.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 74
11.9 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.10 GOVERNING LAW; NO THIRD PARTY RIGHTS . . . . . . . . . . . . . . 75
11.11 SUBMISSION TO JURISDICTION; WAIVERS. . . . . . . . . . . . . . . 75
11.12 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . 76
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SCHEDULES:
Schedule 1.1A Lists of Addresses for Notices; Lending Offices;
Commitment Amounts
Schedule 1.1B Terms of Used Aircraft Inventory Financing
Schedule 3.3 Outstanding Letters of Credit
Schedule 5.14 ERISA
Schedule 5.5 Material Litigation
Schedule 5.12A Domestic Subsidiaries
Schedule 5.12B Foreign Subsidiaries
Schedule 5.6(d) Dividends
Schedule 8.1 Existing Indebtedness
Schedule 8.2 Existing Liens
Schedule 8.3 Existing Contingent Obligations
Schedule 8.13 Existing Foreign Exchange Contracts
EXHIBITS:
Exhibit A Revolving Credit Note
Exhibit B Swing Line Note
Exhibit C Term Note
Exhibit D Company Pledge Agreement
Exhibit E Holdings Guarantee
Exhibit F Holdings Pledge Agreement
Exhibit G Subsidiary Guarantee
Exhibit H Subsidiary Pledge Agreement
Exhibit I-1 Opinion of Fried, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇
Exhibit I-2 Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Exhibit J-1 Holdings Closing Certificate
Exhibit J-2 Company Closing Certificate
Exhibit J-3 Subsidiary Guarantor Closing Certificate
Exhibit K L/C Participation Certificate
Exhibit L Swing Line Loan Participation Certificate
Exhibit M Assignment and Acceptance
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CREDIT AGREEMENT, dated as of October __, 1996, among GULFSTREAM
DELAWARE CORPORATION, a Delaware corporation (the "COMPANY"), the several
lenders from time to time parties hereto (the "LENDERS") and THE CHASE MANHATTAN
BANK, a New York banking corporation, as administrative agent for the Lenders
(in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, Holdings and the Company have informed the Administrative
Agent and the Lenders that Holdings intends to issue and sell shares of its
common stock in an initial public offering registered under the Securities Act
of 1933, as amended (the "IPO"); and
WHEREAS, in connection with the IPO, Holdings and the Company have
requested the Lenders to enter into this Agreement to make loans and other
extensions of credit to be used, together with the proceeds of the IPO, to
refinance certain of the outstanding indebtedness of Company, to pay fees and
expenses related to the IPO and the other transactions contemplated hereby, to
retire certain capital stock of Holdings and to provide financing for the
working capital needs and general corporate purposes of the Company and its
Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms defined in
the preamble hereto shall have the meanings set forth therein, and the following
terms have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "PRIME RATE" shall mean the rate of interest per
annum publicly announced from time to time by Chase as its prime rate in effect
at its principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by Chase in connection with extensions of
credit to debtors); and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day,
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which is a Business
Day, the average of the quotations for the day
2
of such transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate, for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms hereof, the ABR shall be determined without regard to clause (b), of the
first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the ABR due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
as of the opening of business on the effective day of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"ABR LOANS": Loans whose interest rate is based on the ABR.
"ACCOUNTANTS": as defined in subsection 7.1(a)
"ADJUSTMENT DATE": the first Business Day following receipt by the
Administrative Agent of both (i) the financial statements required to be
delivered pursuant to subsection 7.1(a) or 7.1(b), as the case may be, for the
most recently completed fiscal period and (ii) the certificate required to be
delivered pursuant to subsection 7.2(b) with respect to such fiscal period.
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": of any Person (a) any Person (other than a Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such Person, or (b) any Person who is a director or officer
(i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person
described in clause (a) above. For purposes of this definition, control of a
Person shall mean the power, direct or indirect, either to (i) vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person, or (ii) direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
modified from time to time.
"AGGREGATE REVOLVING CREDIT EXTENSIONS OF CREDIT": at any particular
time, the sum of (a) the aggregate then outstanding principal amount of the
Revolving Credit Loans, (b) the aggregate amount then available to be drawn
under all outstanding Letters of Credit and (c) the aggregate then outstanding
amount of Revolving L/C Obligations.
"APPLICABLE MARGIN": (a) with respect to ABR Loans, .75%, and (b)
with respect to Eurodollar Loans, 1.75%, PROVIDED that, from and after the first
Adjustment Date to occur after the Closing Date, the Applicable Margin for all
Loans will be adjusted, if required on each Adjustment Date, to the Applicable
Margin set forth on ANNEX A hereto opposite the Leverage Ratio Level of the
Company in effect on such Adjustment Date, and PROVIDED further, that in the
event that the financial statements required to be delivered pursuant to
subsection 7.1(a) or 7.1(b), as applicable, and the related certificate required
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pursuant to subsection 7.2(b), are not delivered when due, then, during the
period from the date upon which such financial statements were required to be
delivered until one Business Day following the date upon which they actually are
delivered, Leverage Ratio Level I shall be deemed to be in effect for the
purposes of determining Applicable Margins during such period.
"ASSET SALE": any sale, sale-leaseback, assignment, conveyance,
transfer or other disposition by the Company or any Subsidiary thereof of any of
its property or assets, including the stock of any Subsidiary of the Company and
any primary issuance of capital stock of any Subsidiary of the Company other
than to the Company or any Subsidiary of the Company (except sales, sale-
leasebacks, assignments, conveyances, transfers and other dispositions permitted
by clauses (a), (b), (c), and (d) of subsection 8.5).
"ASSIGNEE": as defined in subsection 11.6(c).
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance
substantially in the form of Exhibit N hereto.
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any Lender, at a
particular time, an amount equal to the excess, if any, of (a) the amount of
such ▇▇▇▇▇▇'s Revolving Credit Commitment at such time less (b) the sum of (i)
the aggregate unpaid principal amount at such time of all Revolving Credit Loans
made by such Lender pursuant to subsection 3.1, (ii) such Lender's L/C
Participating Interest in the aggregate amount available to be drawn at such
time under all outstanding Letters of Credit, (iii) such ▇▇▇▇▇▇'s Revolving
Credit Commitment Percentage of the aggregate outstanding amount of Revolving
L/C Obligations and (iv) such Lender's Revolving Credit Commitment Percentage of
the aggregate unpaid principal amount at such time of all Swing Line Loans,
PROVIDED; however, that the amount referred to in this clause (iv) shall be
zero for the purposes of calculating the Available Revolving Credit Commitment
pursuant to subsection 4.9; collectively, as to all the Lenders, the
"AVAILABLE REVOLVING CREDIT COMMITMENTS".
"BENEFITTED LENDER": as defined in subsection 11.7 hereof.
"BOARD": the Board of Governors of the Federal Reserve System of the
United States or any successor.
"BORROWING DATE": any Business Day, or, in the case of Eurodollar
Loans, any Working Day, specified in a notice pursuant to (a) subsection 3.7 or
4.1 as a date on which the Company requests Chase to make Swing Line Loans or
the Lenders to make Revolving Credit Loans, respectively, hereunder or (b)
subsection 3.5 as a date on which the Company requests the Issuing Lender to
issue a Letter of Credit hereunder.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
"CAPITAL EXPENDITURES": for any period, all amounts (other than those
arising from the acquisition or lease of businesses and assets which are
permitted by subsection
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8.6(g)) which are set forth on Holdings', and its Subsidiaries' consolidated
statement of cash flows for such period as "Additions to property and
equipment", in accordance with GAAP, consistent with the Holdings financial
statements for the year ended December 31, 1995 (it being understood that
tooling expenditures shall, in any event, constitute capital expenditures).
"CASH EQUIVALENTS": (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than six months from the
date of acquisition, (ii) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any Lender or with any domestic commercial bank
having capital and surplus in excess of $250,000,000, (iii) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (i) and (ii) entered into with any financial
institution meeting the qualifications specified in clause (ii) above, and (iv)
commercial paper issued by any Lender, the parent corporation of any Lender or
any Subsidiary of such ▇▇▇▇▇▇'s parent corporation, and commercial paper rated
A-1 or the equivalent thereof by Standard & Poor's Rating Group or P-1 or the
equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. and in each case maturing
within six months after the date of acquisition thereof.
"CHANGE IN LAW": with respect to any Lender, the adoption of any law,
rule, regulation, policy, guideline or directive (whether or not having the
force of law) or any change therein or in the interpretation or application
thereof by any Governmental Authority, including, without limitation, the
issuance of any final rule, regulation or guideline by any regulatory agency
having jurisdiction over such Lender or, in the case of subsection 4.12(b) or
4.20(b), any corporation controlling such Lender.
"CHASE": as defined in the preamble hereto.
"CLOSING DATE": the date on which each of the conditions precedent to
the effectiveness of this Agreement contained in Section 6.1 has been either
satisfied or waived in accordance with the terms and provisions of Section 6.1.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COMMERCIAL L/C": a commercial documentary Letter of Credit under
which the relevant Issuing Lender agrees to make payments in Dollars for the
account of the Company, on behalf of the Company or any Subsidiary thereof, in
respect of obligations of the Company or any Subsidiary thereof in connection
with the importation or exportation of goods in the ordinary course of business.
"COMMITMENT PERCENTAGE": as to any Lender at any time, its Term Loan
Commitment Percentage or its Revolving Credit Commitment Percentage, as the
context may require.
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"COMMITMENTS": the collective reference to the Revolving Credit
Commitments, the Swing Line Commitment and the Term Loan Commitments;
individually, a "COMMITMENT".
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Company within the meaning of Section
4001 of ERISA or is part of a group which includes the Company and which is
treated as a single employer under Section 414 of the Code.
"COMPANY": as defined in the preamble hereto.
"COMPANY PLEDGE AGREEMENT": the Pledge Agreement, substantially in
the form of Exhibit D hereto, made by the Company in favor of the Administrative
Agent, for the ratable benefit of the Lenders, as the same may be amended,
supplemented or otherwise modified from time to time (it being understood and
agreed that, subject to Section 7.8(c) hereof, the Company Pledge Agreement
shall not require the Company to pledge (x) any of the stock of any Foreign
Subsidiary of the Company or Holdings which is owned by a Foreign Subsidiary of
the Company or Holdings or (y) more than 65% of the stock of (i) any other
Foreign Subsidiary of the Company or Holdings or (ii) any other Subsidiary of
the Company or Holdings if more than 65% of the assets of such Subsidiary are
securities of foreign Persons (such determination to be made on the basis of
fair market value)).
"CONSOLIDATED CURRENT ASSETS": at a particular date, all amounts
which would, in conformity with GAAP (except that the unamortized amount of
production tooling shall be included as a current asset), be included under
current assets on a consolidated balance sheet of Holdings and its Subsidiaries
as at such date , plus the lesser of (i) the Available Revolving Credit
Commitment at such date and (ii) $165,000,000.
"CONSOLIDATED CURRENT LIABILITIES": at a particular date, all amounts
which would, in conformity with GAAP, be included under current liabilities on a
consolidated balance sheet of Holdings and its Subsidiaries as at such date,
excluding any portion of the Loans otherwise so included.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income ((i)
including earnings and losses from discontinued operations, (ii) excluding
extraordinary gains, and gains and losses arising from the proposed or actual
disposition of material assets, and (iii) excluding the non-cash portion of
other non-recurring losses) of Holdings and its Subsidiaries for such period,
PLUS to the extent reflected as a charge in the statement of consolidated net
income for such period, the sum of (a) interest expense (net of interest
income), amortization (including accelerated amortization) and write offs of
debt discount and debt issuance costs, including such write-offs in connection
with the prepayment of debt, and commissions, discounts and other fees and
charges associated with Letters of Credit, (b) taxes measured by income, (c)
depreciation and amortization expenses including acceleration thereof and
including the amortization of the increase in inventory resulting from the
application of APB 16 for transactions contemplated by this Agreement including
acquisitions permitted under 8.6(g), (d) non-cash compensation expenses arising
from the sale of stock, the granting of stock options, the granting of stock
appreciation rights and
6
similar arrangements, (e) the excess of the expense in respect of post-
retirement benefits and post-employment benefits accrued under Statement of
Financial Accounting Standards No. 106 ("FASB 106") and Statement of Financial
Accounting Standards No. 112 ("FASB 112") over the cash expense in respect of
such post-retirement benefits and post-employment benefits and (f) the amount of
any non-cash charges made or required to be made in connection with the
Refinancing (including, in the case of stock appreciation rights, any charge
thereafter on a cumulative basis) in respect of (A) the charge to expense for
compensation relating to stock options, stock appreciation rights and stock
purchases by officers, directors and key employees of Holdings or any of its
Subsidiaries and (B) the charge to expense for deferred financing costs
resulting from the prepayment of all amounts owing and payable under the
Existing Credit Agreements; PROVIDED, that Consolidated EBITDA during any period
shall be increased by research and development expense incurred during such
period in respect of the Gulfstream V program (if the amount of such expense for
such period is greater than $0), but only to the extent of customer deposits
received, net of cancellations, during such period.
"CONSOLIDATED INTEREST EXPENSE": for any period the amount of
interest expense, both expensed and capitalized (excluding amortization and
write offs of debt discount, and debt issuance costs net of interest income, of
Holdings and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, for such period, PROVIDED that (i) Consolidated Interest Expense for
the period of four consecutive fiscal quarters ending December 31, 1996, shall
be equal to the product of (A) Consolidated Interest Expense for the fiscal
quarter ending December 31, 1996 times (B) 4, (ii) Consolidated Interest Expense
for the period of four consecutive fiscal quarters ending March 31, 1997, shall
be equal to the product of (A) Consolidated Interest Expense for the two
consecutive fiscal quarters ending March 31, 1997 times (B) 2, and (iii)
Consolidated Interest Expense for the period of four consecutive fiscal quarters
ending June 30, 1997, shall be equal to the product of (A) Consolidated Interest
Expense for the three consecutive fiscal quarters ending June 30, 1997 times (B)
a fraction, the numerator of which is 4 and the denominator of which is 3.
"CONSOLIDATED NET INCOME": for any period, the net income or net loss
of Holdings and its Subsidiaries for such period, determined in accordance with
GAAP on a consolidated basis, as reflected in the financial statements furnished
to the Administrative Agent in accordance with subsections 7.1(a) and (b)
hereof.
"CONSOLIDATED TOTAL DEBT": at any date of determination, the
principal amount of all indebtedness of Holdings and its consolidated
Subsidiaries outstanding in accordance with GAAP under this Agreement plus any
other amounts, without duplication, included in clause (a) of the definition of
Indebtedness (including any amounts drawn and unreimbursed under letters of
credit) at such date of determination, on a consolidated basis in accordance
with GAAP.
"CONTINGENT OBLIGATION": as to any Person, any obligation of such
Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent (a)
to purchase any such primary obligation or any
7
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; PROVIDED, HOWEVER, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount (based on the maximum
reasonably anticipated net liability in respect thereof as determined by the
Company in good faith) of the primary obligation or portion thereof in respect
of which such Contingent Obligation is made or, if not stated or determinable,
the maximum reasonably anticipated net liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by the Company in
good faith.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of the property owned by it
is bound.
"CREDIT DOCUMENTS": the collective reference to this Agreement, the
Notes, the Pledge Agreements, the Guarantees and any security agreement and
guarantee executed and delivered pursuant to the terms of subsection 7.8.
"CREDIT PARTIES": the collective reference to Holdings, the Company
and each Subsidiary which is a party, or which at any time becomes a party, to a
Credit Document.
"DEFAULT": any of the events specified in Section 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Company other than a
Foreign Subsidiary.
"ENVIRONMENTAL LAWS": any and all Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
requirements of any Governmental Authority regulating, relating to or imposing
liability or standards of conduct concerning environmental protection matters,
including without limitation, Hazardous Materials, as now or may at any time
hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day, as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal) of
8
reserve requirements current on such day (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the Board
or other Governmental Authority having jurisdiction with respect thereto), as
now and from time to time hereafter in effect, dealing with reserve requirements
prescribed for Eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) maintained by a member bank of such
System. As of the Closing Date, there are no Eurocurrency Reserve Requirements
in effect.
"EURODOLLAR BASE RATE": with respect to each day during any Interest
Period for any Eurodollar Loan, the rate per annum equal to the rate at which
Chase is offered Dollar deposits at or about 10:00 a.m., New York City time, two
Working Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the foreign currency and exchange operations in respect
of its Eurodollar Loans then are being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of its Eurodollar Loan to be outstanding during
such Interest Period.
"EURODOLLAR LENDING OFFICE": initially, the office of each Lender
designated as such in Schedule 1.1A; thereafter, such other office of such
Lender, if any, which shall be making or maintaining Eurodollar Loans as
designated as such from time to time in a notice from such Lender to the
Administrative Agent.
"EURODOLLAR LOANS": Loans at such time as they are made and/or being
maintained at a rate of interest based upon a Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
---------------------------------------
1.00 - Eurocurrency Reserve Requirement
"EVENT OF DEFAULT": any of the events specified in Section 9,
PROVIDED that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"EXISTING CREDIT AGREEMENTS": the collective reference to (i) the
Credit Agreement, dated as of March 19, 1990, among the Company, the banks and
other financial institutions parties thereto and Chase, as administrative agent,
as amended, and (ii) the Credit Agreement, dated as of November 30, 1993, among
the Company, the banks and other financial institutions parties thereto and
Chase, as administrative agent, as amended.
"FINANCING SUBSIDIARY": any Affiliate or Subsidiary of the Company
which is a party to the Used Aircraft Inventory Financing.
"FL AFFILIATE": any Affiliate (other than any described in
clause (b) of the definition thereof) of any member of the FL Group.
"FL GROUP": FL & Co. and the FL Affiliates.
9
"FL & CO.": FLC Partnership, L.P., a New York limited partnership
("FLC"), each of the general partners thereof, any subordinated debt and equity
partnership controlled by FLC or such general partner or any combination of the
foregoing.
"FOREIGN SUBSIDIARY": any Subsidiary of the Company (or if so
specified, Holdings) (a) which is organized under the laws of any jurisdiction
outside the United States (within the meaning of Section 7701(a)(9) of the
Code), or (b) whose principal assets consist of capital stock or other equity
interests of one or more Persons which conduct the major portion of their
business outside the United States (within the meaning of Section 7701 (a)(9) of
the Code).
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": 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.
"GUARANTEES": the collective reference to the Holdings Guarantee and
the Subsidiary Guarantee.
"GULFSTREAM V": the type of large cabin business jet aircraft
produced by the Company and designated "Gulfstream V".
"HAZARDOUS MATERIALS": any substance (a) which is or becomes defined
as a "hazardous waste," "hazardous substance," pollutant or contaminant under
any federal, state or local statute, regulation, rule or ordinance or amendments
thereto including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and/or the
Resource Conservation and Recovery Act (42 U.S.C.Section 6901 et seq.); and (b)
without limitation, which is or contains petroleum products (including crude oil
or any fraction thereof), PCBs, asbestos, urea formaldehyde foam insulation,
radon gas or infectious or radioactive materials.
"HOLDINGS": Gulfstream Aerospace Corporation, a Delaware corporation.
"HOLDINGS DIVIDEND LIMIT": as defined in subsection 8.11(e).
"HOLDINGS GUARANTEE": the Guarantee, substantially in the form of
Exhibit E hereto, made by Holdings in favor of the Administrative Agent, for the
ratable benefit of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"HOLDINGS NOTE": the Note due December 31, 2002 and dated the date
hereof, in the original principal amount of $100,000,000, made by Holdings in
favor of the Company in connection with the Refinancing.
10
"HOLDINGS PLEDGE AGREEMENT": the Pledge Agreement, substantially in
the form of Exhibit F hereto, made by Holdings in favor of the Administrative
Agent, for the ratable benefit of the Lenders, as the same may be amended,
supplemented or otherwise modified from time to time (it being understood and
agreed that, subject to Section 7.8(c) hereof, the Holdings Pledge Agreement
shall not require Holdings to pledge (x) any of the stock of any Foreign
Subsidiary of the Company or Holdings which is owned by a Foreign Subsidiary of
the Company or Holdings or (y) more than 65% of the stock of (i) any other
Foreign Subsidiary of the Company or Holdings or (ii) any other Subsidiary of
the Company or Holdings if more than 65% of the assets of such Subsidiary are
securities of foreign Persons (such determination to be made on the basis of
fair market value)).
"HOLDINGS PREFERRED": the 7% Cumulative Preferred Stock issued by
Holdings and outstanding on the Closing Date.
"INDEBTEDNESS": of any Person, at any particular date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade payables or liabilities
and deferred payment for services to employees or former employees incurred in
the ordinary course of business and payable in accordance with customary
practices and other deferred compensation arrangements), (b) the face amount of
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (c) all liabilities (other than Lease
Obligations) secured by any Lien on any property owned by such Person, to the
extent attributable to such Person's interest in such property, even though such
Person has not assumed or become liable for the payment thereof, (d) lease
obligations of such Person which, in accordance with GAAP, should be capitalized
and (e) all indebtedness of such Person arising under acceptance facilities; but
excluding (y) customer deposits and interest payable thereon in the ordinary
course of business and (z) trade and other accounts and accrued expenses payable
in the ordinary course of business in accordance with customary trade terms and
in the case of both clauses (y) and (z) above, which are not overdue for a
period of more than 90 days or, if overdue for more than 90 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of such Person.
"INSOLVENCY": with respect to a Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of such term as used in Section
4245 of ERISA.
"INTEREST COVERAGE RATIO": as at the last day of any fiscal quarter
of Holdings, the ratio of (a) Consolidated EBITDA less Capital Expenditures, in
each case for the period of four fiscal quarters ending on such day to (b)
Consolidated Interest Expense for the period of four fiscal quarters ending on
such day, in each period subject to the proviso at the end of the definition of
Consolidated Interest Expense.
"INTEREST PAYMENT DATE": (a) as to ABR Loans, the last day of each
March, June, September and December, commencing on the first such day to occur
after any ABR Loans are made or any Eurodollar Loans are converted to ABR Loans,
(b) as to any Eurodollar Loan in respect of which the Company has selected an
Interest Period of one, two or three months, the last day of such Interest
Period, (c) as to any Eurodollar Loan in respect of which the Company has
selected an Interest Period of six months, the day which is three
11
months after the date on which such Eurodollar Loan is made or an ABR Loan is
converted to such a Eurodollar Loan, and the last day of such Interest Period,
(d) as to any Eurodollar Loan, each day on which principal of such Eurodollar
Loan is payable, (e) in the case of any Term Loan, when such Loan is paid in
full, and (f) in the case of the Revolving Credit Loans, on the Revolving Credit
Termination Date.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(a) initially, the period commencing on, as the case may be, the
Borrowing Date or conversion date with respect to such Eurodollar Loan and
ending one, two, three or six months thereafter as selected by the Company
in its notice of borrowing as provided in subsection 4.1 or its notice of
conversion as provided in subsection 4.3; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six months thereafter as selected by the Company by
irrevocable notice to the Administrative Agent not less than three Working
Days prior to the last day of the then current Interest Period with respect
to such Eurodollar Loan;
PROVIDED that the foregoing provisions relating to Interest Periods are subject
to the following:
(A) if any Interest Period would otherwise end on a day which is not
a Working Day, that Interest Period shall be extended to the next
succeeding Working Day, unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Working Day;
(B) any Interest Period that would otherwise extend beyond (i) in the
case of an Interest Period for a Term Loan, the final scheduled installment
date set forth in subsection 2.2 shall end on such date or, if such
Installment Payment Date shall not be a Working Day, on the next preceding
Working Day and (ii) in the case of any Interest Period for a Revolving
Credit Loan, the Revolving Credit Termination Date shall end on the
Revolving Credit Termination Date, or if the Revolving Credit Termination
Date shall not be a Working Day, on the next preceding Working Day;
(C) if the Company shall fail to give notice as provided above in
clause (b), it shall be deemed to have selected a conversion of a
Eurodollar Loan into an ABR Loan (which conversion shall occur
automatically and without need for compliance with the conditions for
conversion set forth in subsection 4.3);
(D) any Interest Period that begins on the last day of a calendar
month (or on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end on the
last Working Day of a calendar month; and
12
(E) the Company shall select Interest Periods so as not to require a
prepayment (to the extent practicable) or a scheduled payment of a
Eurodollar Loan during an Interest Period for such Eurodollar Loan.
"IPO": as defined in the Recitals hereto.
"ISSUING LENDER": The Chase Manhattan Bank.
"L/C APPLICATION": a letter of credit application in the relevant
Issuing Lender's then customary form for the type of letter of credit requested.
"L/C PARTICIPATING INTEREST": an undivided participating interest in
the face amount of each issued and outstanding Letter of Credit and the L/C
Application relating thereto.
"L/C PARTICIPATION CERTIFICATE": a certificate in substantially the
form of Exhibit L hereto.
"LEASE OBLIGATIONS": of the Company and its Subsidiaries, as of the
date of any determination thereof, the rental commitments of the Company and its
Subsidiaries determined on a consolidated basis, if any, under leases for real
and/or personal property (net of rental commitments from sub-leases thereof),
excluding however, obligations under leases which are classified as Indebtedness
under clause (d) of the definition of Indebtedness.
"LENDERS": as defined in the preamble hereto.
"LETTER OF CREDIT": a letter of credit issued by the Issuing Lender
pursuant to the terms of subsection 3.3.
"LEVERAGE RATIO": at any date, the ratio of Consolidated Total Debt
at such date to Consolidated EBITDA for the period of four consecutive fiscal
quarters ending on such date.
"LEVERAGE RATIO LEVEL": the existence of Leverage Ratio Level I,
Leverage Ratio Level II, Leverage Ratio Level III, Leverage Ratio Level IV,
Leverage Ratio Level V or Leverage Ratio Level VI, as the case may be.
"LEVERAGE RATIO LEVEL I": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is greater than or equal to 3.50 to 1.00.
"LEVERAGE RATIO LEVEL II": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 3.50 to 1.00 but greater than or equal to 3.00 to
1.00.
13
"LEVERAGE RATIO LEVEL III": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 3.00 to 1.00 but greater than or equal to 2.50 to
1.00.
"LEVERAGE RATIO LEVEL IV": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 2.50 to 1.00 but greater than or equal to 2.00 to
1.00.
"LEVERAGE RATIO LEVEL V": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 2.00 to 1.00 but greater than or equal to 1.50 to
1.00.
"LEVERAGE RATIO LEVEL VI": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 1.50 to 1.00.
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction in respect of
any of the foregoing except for the filing of financing statements in connection
with Lease Obligations incurred by the Company or its Subsidiaries to the extent
that such financing statements relate to the property subject to such Lease
Obligations).
"LOANS": the collective reference to the Term Loans, the Swing Line
Loans and the Revolving Credit Loans; individually, a "LOAN".
"MATERIAL ADVERSE EFFECT": a material adverse effect on the business,
financial condition, assets or results of operations of the Company and its
Subsidiaries taken as a whole.
"MATERIAL SUBSIDIARY": any Subsidiary of the Company or Holdings
which at any time has a total asset value (including the total asset values of
any Subsidiaries), or for which Holdings, the Company or any of their respective
Subsidiaries shall have paid consideration (including the assumption of
Indebtedness) in connection with the acquisition of the stock or the assets of
such Subsidiary, in excess of $20,000,000.
"MONEY MARKET RATE": for any day, with respect to any Money Market
Rate Loan, the rate per annum quoted by Chase to the Company in accordance with
subsection 3.7(a) as the rate at which Chase is willing to make such Loan.
14
"MONEY MARKET RATE LOANS": Swing Line Loans the rate of interest
applicable to which is based upon the Money Market Rate.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET PROCEEDS": the aggregate cash proceeds received by the Company
or any Subsidiary of the Company in respect of any Asset Sale, and any cash
payments received in respect of promissory notes or other non-cash consideration
delivered to the Company or such Subsidiary in respect of an Asset Sale (subject
to the limitations set forth in subsection 8.6(f)), net of (without duplication)
(i) the reasonable expenses (including legal fees and brokers' and underwriters'
commissions paid to third parties which are not Affiliates or Subsidiaries of
the Company) incurred in effecting such Asset Sale, (ii) any taxes reasonably
attributable to such Asset Sale and, in case of an Asset Sale in a foreign
jurisdiction, the repatriation of the proceeds of such Asset Sale reasonably
estimated by the Company or such Subsidiary to be actually payable, (iii) any
amounts payable to a Governmental Authority triggered as a result of any such
Asset Sale, (iv) any Indebtedness or Contractual Obligation of the Company and
its Subsidiaries (other than the Loans and other Obligations) required to be
paid or retained in connection with such Asset Sale and (v) the aggregate amount
of reserves required in the Company's reasonable judgment to be maintained on
the books of the Company in order to pay contingent liabilities with respect to
such Asset Sale; PROVIDED that amounts deducted from aggregate proceeds pursuant
to clause (v) and not actually paid by the Company or any of its Subsidiaries in
liquidation of such contingent liabilities shall be deemed to be Net Proceeds
and shall be prepaid in accordance with subsection 4.6 at such time as such
contingent liabilities shall cease to be obligations of the Company or any of
its Subsidiaries.
"NON-US.LENDER": as defined in subsection 4.18(e).
"NOTES": the collective reference to the Revolving Credit Notes, the
Swing Line Note and the Term Loan Notes; one of the Notes, a "NOTE".
"OBLIGATIONS": the unpaid principal of and interest on the Notes and
all other obligations and liabilities of the Company to the Administrative Agent
or the Lenders (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Loans and interest accruing at the then applicable rate provided in the
Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to the Company whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, the Notes, the other Credit Documents, any Letter of Credit or
L/C Application, any agreements between the Company and any Lender relating
to interest rate, currency or similar swap and hedging arrangements
or any other document made, delivered or given in connection therewith,
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or any Lender) or
otherwise.
15
"PARTICIPANT": as defined in subsection 11.6(b)
"PARTICIPATING LENDER": any Lender (other than the Issuing Lender
with respect to such Letter of Credit) with respect to its L/C Participating
Interest in each Letter of Credit.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor thereto.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, limited liability company, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN": any pension plan which is covered by Title IV of ERISA and in
respect of which the Company or a Commonly Controlled Entity is an "employer" as
defined in Section 3(5) of ERISA.
"PLEDGE AGREEMENTS": the collective reference to the Holdings Pledge
Agreement, the Company Pledge Agreement, the Subsidiary Pledge Agreements and
any pledge agreement delivered after the Closing Date pursuant to subsection
7.8; individually, a "PLEDGE AGREEMENT".
"PLEDGED STOCK": as defined in the respective Pledge Agreements.
"PROPERTIES": each parcel of real property currently or previously
owned or operated by the Company or any Subsidiary of the Company.
"REFINANCING": the transactions described in subsection 6.1(d), (e)
and (f), and the transactions related thereto.
"REFUNDED SWING LINE LOANS": as defined in subsection 3.7(c).
"REGISTRATION STATEMENT": the Registration Statement No. 333-09897
on Form S-1, filed by Holdings with the Securities and Exchange Commission
on August 9, 1996.
"REGULATION G": Regulation G of the Board, as from time to time in
effect.
"REGULATION U": Regulation U of the Board, as from time to time in
effect.
"RELATED DOCUMENT": any agreement, certificate, document or
instrument relating to a Letter of Credit.
"RELEASE LENDERS": at a particular time, Lenders that hold Term Loans
and Revolving Credit Commitments in an aggregate principal amount equal to at
least 75% of the sum of the aggregate unpaid principal amount of the Term Loans
at such time, if any, and the aggregate Revolving Credit Commitments at such
time.
16
"REORGANIZATION": with respect to a Multiemployer Plan, the condition
that such Plan is in reorganization as such term is used in Section 4241 of
ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder.
"REQUIRED LENDERS": at a particular time, Lenders that hold Term
Loans and Revolving Credit Commitments in an aggregate principal amount equal
to at least 51% of the sum of the aggregate unpaid principal amount of the
Term Loans outstanding at such time, if any, and the aggregate Revolving Credit
Commitments at such time.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation (including, without limitation,
Environmental Laws) or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"RESPONSIBLE OFFICER": the chief executive officer or the chief
operating officer of the Company or, with respect to financial matters, the
chief financial officer or controller of the Company.
"REVOLVING CREDIT COMMITMENT": as to any Lender, its obligations to
make Revolving Credit Loans to the Company pursuant to subsection 3.1, and to
purchase its L/C Participating Interest in any Letter of Credit, in an aggregate
amount on the Closing Date not to exceed at any time the amount set forth
opposite such ▇▇▇▇▇▇'s name in Schedule 1.1A under the heading "Revolving
Credit" and in an aggregate amount not to exceed at any time the amount equal to
such ▇▇▇▇▇▇'s Revolving Credit Commitment Percentage of the aggregate Revolving
Credit Commitments, as the aggregate Revolving Credit Commitments may be reduced
from time to time pursuant to this Agreement; collectively, as to all the
Lenders, the "REVOLVING CREDIT COMMITMENTS".
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Lender, at any
time, the percentage which such ▇▇▇▇▇▇'s Revolving Credit Commitment constitutes
of all of the Revolving Credit Commitments (or, if the Revolving Credit
Commitments shall have been terminated, the percentage of the outstanding
Aggregate Revolving Credit Extensions of Credit and Swing Line Loans constituted
by such ▇▇▇▇▇▇'s Aggregate Revolving Credit Extensions of Credit and
participating interest in Swing Line Loans).
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and including
the Closing Date to but not including the Revolving Credit Termination Date.
"REVOLVING CREDIT LOAN" and "REVOLVING CREDIT LOANS": as defined in
subsection 3.1(a).
"REVOLVING CREDIT NOTE": as defined in subsection 4.2.
17
"REVOLVING CREDIT TERMINATION DATE": the earlier of (i) September 30,
2002 and (ii) any other date on which the Revolving Credit Commitments shall
terminate hereunder.
"REVOLVING L/C OBLIGATIONS": the obligations of the Company to
reimburse the relevant Issuing Lender for any payments made by the relevant
Issuing Lender under any Letter of Credit that have not been reimbursed by the
Company pursuant to subsection 3.6.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"STANDBY L/C": an irrevocable standby or direct pay Letter of Credit
under which the relevant Issuing Lender agrees to make payments in Dollars for
the account of the Company, on behalf of the Company or any Subsidiary thereof,
in respect of obligations of the Company or a Subsidiary thereof incurred
pursuant to contracts made or performance undertaken, or to be undertaken, or
like matters relating to contracts to which the Company or a Subsidiary thereof
is or proposes to become a party in the ordinary course of the Company's or such
Subsidiary's business, including, without limitation, for insurance purposes or
in respect of advance payments or as bid or performance bonds.
"SUBSIDIARY": as to any Person, any corporation, partnership or other
entity of which shares of stock of each class or other equity interests having
ordinary voting power (other than stock or other equity interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned by such Person or by one or more Subsidiaries
of such Person or by such Person and one or more Subsidiaries of such Person. A
Subsidiary shall be deemed wholly-owned by a Person who owns all of the voting
shares or other equity interests of such Subsidiary except for directors'
qualifying or similar shares.
"SUBSIDIARY GUARANTEE": the Subsidiary Guarantee to be executed by
each Subsidiary Guarantor in favor of the Administrative Agent, for the ratable
benefit of the Lenders, substantially in the form of Exhibit G hereto, as the
same may be amended, supplemented or otherwise modified from time to time.
"SUBSIDIARY GUARANTOR": the Material Subsidiaries of Holdings and
such other Subsidiaries as the Company may elect to include as guarantors,
other than Foreign Subsidiaries of Holdings or the Company or other Subsidiaries
of Holdings or the Company if more than 65% of the assets of such subsidiaries
are securities of foreign Persons (such determination to be made on the basis of
fair market value); PROVIDED that the term "Subsidiary Guarantor" shall, in any
event, include any Subsidiary which enters into a Guarantee pursuant to
subsection 7.8(b).
"SUBSIDIARY NOTE": the promissory note made by Gulfstream Aerospace
Corporation, a Georgia corporation and a Subsidiary of the Company, in favor of
the Company and evidencing the intercompany indebtedness owed from time to time
by such Subsidiary to the Company.
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"SUBSIDIARY PLEDGE AGREEMENT": the Subsidiary Pledge Agreement to be
executed by each Subsidiary Pledgor in favor of the Administrative Agent, for
the ratable benefit of the Lenders, substantially in the form of Exhibit H
hereto, as the same may be amended, supplemented or otherwise modified from time
to time (it being understood and agreed that, subject to Section 7.8(c) hereof,
the Subsidiary Pledge Agreement shall not require a Subsidiary Pledgor to pledge
(x) any of the stock of any Foreign Subsidiary of the Subsidiary Pledgor, the
Company or Holdings which is owned by a Foreign Subsidiary of the Subsidiary
Pledgor, the Company or Holdings or (y) more than 65% of the stock of (i) any
other Foreign Subsidiary of the Subsidiary Pledgor, the Company or Holdings or
(ii) any other Subsidiary of the Subsidiary Pledgor, the Company or Holdings if
more than 65% of the assets of such Subsidiary are securities of foreign Persons
(such determination to be made on the basis of fair market value)).
"SUBSIDIARY PLEDGOR": Any Subsidiary of the Company which,
after the Closing Date, enters into a Pledge Agreement pursuant to
subsection 7.8(a).
"SWING LINE COMMITMENT": ▇▇▇▇▇'▇ obligation to make Swing Line Loans
pursuant to subsection 3.7.
"SWING LINE LOAN" and "SWING LINE LOANS": as defined in subsection
3.7(a).
"SWING LINE LOAN PARTICIPATION CERTIFICATE": a certificate in
substantially the form of Exhibit M hereto.
"SWING LINE NOTE": as defined in subsection 4.2.
"TERM INSTALLMENT PAYMENT DATE": as defined in subsection 2.2.
"TERM LOAN" and "TERM LOANS": as defined in subsection 2.1.
"TERM LOAN COMMITMENT": as to any Lender, its obligations to make
Term Loans to the Company pursuant to subsection 2.1 in an aggregate amount not
to exceed the amount set forth opposite such ▇▇▇▇▇▇'s name in Schedule 1.1A
under the heading "Term Loan", as the same may be reduced from time to time
pursuant to subsection 4.4; collectively, as to all the Lenders, the "TERM LOAN
COMMITMENTS".
"TERM LOAN COMMITMENT PERCENTAGE": as to any Lender, at any time, the
percentage of the aggregate principal amount of all Term Loans then outstanding
constituted by the aggregate principal amount of such ▇▇▇▇▇▇'s Term Loans then
outstanding.
"TERM LOAN NOTE" and "TERM LOAN NOTES": as defined in subsection 4.2.
"TYPE": as to any Loan, its nature as an ABR Loan, a Eurodollar Loan,
or a Money Market Rate Loan.
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"UNIFORM CUSTOMS": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"USED AIRCRAFT INVENTORY FINANCING": the collective reference to each
financing arrangement (other than any sale in which there is no recourse to the
Company or any of its Subsidiaries, to the extent that such a sale might be
deemed to be a financing arrangement) between any Financing Subsidiary and a
third party with regard to used aircraft held by the Company or any of its
Subsidiaries in inventory, substantially upon the terms set forth in Schedule
1.1B; PROVIDED, in any event, that all such arrangements collectively shall be
limited to such portion of the used aircraft inventory of the Company and its
Subsidiaries having a fair market value not in excess of $200,000,000 in the
aggregate.
"WORKING DAY": any day on which dealings in foreign currencies and
exchange between banks may be carried on in London, England and in New York, New
York.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, any other Credit Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the Notes, any other Credit Document and
any certificate or other document made or delivered pursuant hereto, accounting
terms relating to Holdings, the Company and its Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1 to the
extent not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to the singular and plural forms of such terms.
SECTION 2. TERM LOANS
2.1 TERM LOANS. Subject to the terms and conditions hereof, each
Lender severally agrees to make the term loans in Dollars (individually, a "TERM
LOAN"; and collectively, the "TERM LOANS") to the Company on the Closing Date in
an aggregate principal amount not to exceed such ▇▇▇▇▇▇'s Term Loan Commitment.
The Term Loans shall initially be ABR Loans.
2.2 REPAYMENT OF TERM LOANS. The Company shall repay the Term Loans
in 22 consecutive quarterly installments on the last day of each March, June,
September and
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December (each such day, a "TERM INSTALLMENT PAYMENT DATE"), commencing on
June 30, 1997, each of which installments on any such date shall be the amount
set forth opposite such date below (or such earlier date on which the Term Loans
become due and payable hereunder):
Installment Date Amount
---------------- ------
June 30, 1997 6,666,666.00
September 30, 1997 6,666,667.00
December 31, 1997 6,666,667.00
March 31, 1998 18,750,000.00
June 30, 1998 18,750,000.00
September 30, 1998 18,750,000.00
December 31, 1998 18,750,000.00
March 31, 1999 18,750,000.00
June 30, 1999 18,750,000.00
September 30, 1999 18,750,000.00
December 31, 1999 18,750,000.00
March 31, 2000 18,750,000.00
June 30, 2000 18,750,000.00
September 30, 2000 18,750,000.00
December 31, 2000 18,750,000.00
March 31, 2001 18,750,000.00
June 30, 2001 18,750,000.00
September 30, 2001 18,750,000.00
December 31, 2001 18,750,000.00
March 31, 2002 26,666,666.00
June 30, 2002 26,666,667.00
September 30, 2002 26,666,667.00
2.3 PROCEEDS OF TERM LOANS. The Company shall use the proceeds of
the Term Loans solely (a) to finance in part the refinancing on the Closing Date
of the Existing Credit Agreements as described in subsection 6.1(f), (b) for the
payment of related fees and expenses in connection with the IPO and the
transactions contemplated hereby and (c) to effect the repurchase on the Closing
Date of the Holdings Preferred as described in subsection 6.1(e).
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
3.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Lender agrees to extend credit to the Company from time
to time on any Borrowing Date during the Revolving Credit Commitment Period (i)
by purchasing an L/C Participating Interest in each Letter of Credit issued by
the Issuing Lender and (ii) by making loans in Dollars (individually, a
REVOLVING CREDIT LOAN, and collectively the "REVOLVING CREDIT LOANS") to the
Company from time to time. Notwithstanding the foregoing, in no
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event shall (i) any Revolving Credit Loan or Swing Line Loan be made, or any
Letter of Credit be issued, if, after giving effect to such making or issuance
and the use of proceeds thereof as irrevocably directed by the Company, the sum
of the Aggregate Revolving Credit Extensions of Credit and the aggregate
outstanding principal amount of the Swing Line Loans would exceed the aggregate
Revolving Credit Commitments or if subsection 3.5 would be violated thereby,
(ii) any Revolving Credit Loan or Swing Line Loan be made, or any Letter of
Credit be issued, if the amount of such Loan to be made or any Letter of Credit
to be issued would, after giving effect to the use of proceeds, if any, thereof,
exceed the Available Revolving Credit Commitment or (iii) any Revolving Credit
Loan or Swing Line Loan be made, other than to fund Revolving L/C Obligations,
if the sum of the aggregate outstanding principal amount of Revolving Credit
Loans and the aggregate outstanding principal amount of Swing Line Loans would,
after giving effect to the making of such Revolving Credit Loans or such Swing
Line Loan and use of proceeds, if any, thereof, exceed $200,000,000. During the
Revolving Credit Commitment Period, the Company may use the Revolving Credit
Commitments by borrowing, prepaying the Revolving Credit Loans or Swing Line
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof, and/or by having the Issuing Lenders issue Letters of Credit,
having such Letters of Credit expire undrawn upon or if drawn upon, reimbursing
the relevant Issuing Lender for such drawing, and having the Issuing Lenders
issue new Letters of Credit.
(b) The Revolving Credit Loans shall on the Closing Date be made
initially as ABR Loans. Each borrowing of Revolving Credit Loans pursuant to
the Revolving Credit Commitments shall be in an aggregate principal amount of
the lesser of (i) $5,000,000, or a whole multiple of $1,000,000 in excess
thereof, and (ii) the Available Revolving Credit Commitments, except that any
borrowing of a Revolving Credit Loan to be used solely to pay a like amount of
Swing Line Loans may be in the aggregate principal amount of such Swing Line
Loans.
3.2 PROCEEDS OF REVOLVING CREDIT LOANS. The Company shall use the
proceeds of Revolving Credit Loans solely (a) for the purposes described in
subsection 2.3, (b) for financing general working capital needs of the Company
or any of its Subsidiaries, and (c) for other general corporate purposes of the
Company or any of its Subsidiaries, all in accordance with the terms and
conditions hereof.
3.3 ISSUANCE OF LETTERS OF CREDIT. (a) The Company may from time to
time request the Issuing Lender to issue a Letter of Credit, which may be either
a Standby L/C or a Commercial L/C, by delivering to the Administrative Agent at
its address specified in subsection 11.2 and the Issuing Lender an L/C
Application completed to the satisfaction of the Issuing Lender, together with
the proposed form of such Letter of Credit (which shall comply with the
applicable requirements of paragraph (b) below) and such other certificates,
documents and other papers and information as the Issuing Lender may reasonably
request. All of the letters of credit issued and outstanding on the Closing
Date under the Existing Credit Agreements and set forth on Schedule 3.3 hereto
shall on the Closing Date remain outstanding and shall in each case be deemed to
be, and shall be, a Letter of Credit issued and outstanding under the terms of
this Agreement.
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(b) Each Letter of Credit issued hereunder shall, among other things,
(i) be in such form requested by the Company as shall be acceptable to the
relevant Issuing Lender in its sole discretion and (ii) have an expiry date, in
the case of each Standby L/C, occurring not later than the earlier of (x) 365
days after the issuance of such Standby L/C and (y) the Revolving Credit
Termination Date, and in the case of each Commercial L/C, occurring not later
than the earlier of (x) 180 days after the date of issuance of such Commercial
L/C and (y) the Revolving Credit Termination Date. Each L/C Application and
each Letter of Credit shall be subject to the Uniform Customs and, to the extent
not inconsistent therewith, the laws of the State of New York.
3.4 PARTICIPATING INTERESTS. Effective in the case of each Letter of
Credit opened by the Issuing Lender as of the date of the opening thereof
(including each Letter of Credit set forth on Schedule 3.3 hereto and deemed
opened and outstanding as of the Closing Date), the Issuing Lender agrees to
allot and does allot, to itself and each other Lender, and each Lender severally
and irrevocably agrees to take and does take in such Letter of Credit and the
related L/C Application, an L/C Participating Interest in a percentage equal to
such ▇▇▇▇▇▇'s Revolving Credit Commitment Percentage.
3.5 PROCEDURE FOR OPENING LETTERS OF CREDIT. Upon receipt of any L/C
Application from the Company in respect of a Letter of Credit, the
Administrative Agent will promptly notify each Lender thereof. The relevant
Issuing Lender will process such L/C Application, and the other certificates,
documents and other papers delivered to the Issuing Lender in connection
therewith, upon receipt thereof in accordance with its customary procedures and,
subject to the terms and conditions hereof, shall promptly open such Letter of
Credit by issuing the original of such Letter of Credit to the beneficiary
thereof and by furnishing a copy thereof to the Company and each of the other
Lenders, PROVIDED that no such Letter of Credit shall be issued (a) if
subsection 3.1 would be violated thereby or (b) if the maximum aggregate amount
available to be drawn under all Letters of Credit outstanding at such time would
exceed $150,000,000.
3.6 PAYMENTS IN RESPECT OF LETTERS OF CREDIT. (a) The Company
agrees forthwith upon demand by the relevant Issuing Lender and otherwise in
accordance with the terms of the L/C Application relating thereto (i) to
reimburse the Issuing Lender, through the Administrative Agent, for any payment
made by the Issuing Lender under any Letter of Credit and (ii) to pay interest
on any unreimbursed portion of any such payment from the date of such payment
until reimbursement in full thereof at a rate per annum equal to (A) prior to
the date which is one Business Day after the day on which the Issuing ▇▇▇▇▇▇
demands reimbursement from the Company for such payment, the ABR plus the
Applicable Margin for ABR Loans and (B) on such date and thereafter, the ABR
plus the Applicable Margin for ABR Loans plus 2%.
(b) In the event that the Issuing Lender makes a payment under any
Letter of Credit and is not reimbursed in full therefor forthwith upon demand of
the Issuing Lender, and otherwise in accordance with the terms of the L/C
Application relating to such Letter of Credit, the Issuing Lender will promptly
notify each other Lender through the Administrative Agent. Forthwith upon its
receipt of any such notice, each other Lender will transfer to the Issuing
Lender, through the Administrative Agent, in immediately available funds, an
amount
23
equal to such other ▇▇▇▇▇▇'s PRO RATA share of the Revolving L/C Obligation
arising from such unreimbursed payment. Upon its receipt from such other Lender
of such amount, the Administrative Agent will complete, execute and deliver to
such other Lender an L/C Participation Certificate dated the date of such
receipt and in such amount.
(c) Whenever, at any time after the Issuing Lender has made a payment
under any Letter of Credit and has received from any other Lender such other
Lender's PRO RATA share of the Revolving L/C Obligation arising therefrom, the
Issuing Lender receives any reimbursement on account of such Revolving L/C
Obligation or any payment of interest on account thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded), the
Issuing Lender will, as promptly as practicable, distribute to such other
Lender, through the Administrative Agent, its PRO RATA share thereof in like
funds as received; PROVIDED, that in the event that the receipt by the Issuing
Lender of such reimbursement or such payment of interest (as the case may be)
is required to be returned, such other Lender will return to the Issuing
Lender, through the Administrative Agent, any portion thereof previously
distributed by the Issuing Lender to it in like funds as such reimbursement
or payment is required to be returned by the Issuing Lender.
3.7 SWING LINE COMMITMENT. (a) Subject to the terms and conditions
hereof, Chase agrees to make swing line loans (individually, a "SWING LINE
LOAN"; collectively, the "SWING LINE LOANS") to the Company from time to time
during the Revolving Credit Commitment Period in an aggregate principal amount
at any one time outstanding not to exceed $20,000,000, PROVIDED that at no time
may the sum of the aggregate outstanding principal amount of the Swing Line
Loans and the Aggregate Revolving Credit Extensions of Credit exceed the
Revolving Credit Commitments. Amounts borrowed by the Company under this
subsection may be repaid and, through but excluding the Revolving Credit
Termination Date, reborrowed. All Swing Line Loans may from time to time be (i)
ABR Loans, (ii) Money Market Rate Loans or (iii) a combination thereof, and
shall not be entitled to be converted into Eurodollar Loans. The Company shall
give Chase irrevocable notice (which notice must be received by Chase prior to
12:00 Noon, New York City time) on the requested Borrowing Date specifying the
amount of each requested Swing Line Loan, which shall be in minimum amounts of
$500,000 or a whole multiple thereof, in the case of Swing Line Loans which are
ABR Loans, or $2,000,000 or a whole multiple thereof, in the case of Swing Line
Loans which are Money Market Rate Loans. In the case of any Swing Line Loans
that the Company desires to request as Money Market Rate Loans, the Company
may, on any Borrowing Date for Swing Line Loans and prior 12:00 noon, New York
City time, request a quote of the Money Market Rate which would be applicable
for such Swing Line Loans from Chase, specifying the amount of the proposed
Money Market Rate Loans. Upon receipt of such quote, the Company shall
promptly (but not later than 12:00 noon, New York City time on such
Borrowing Date) notify Chase whether it requests Chase to make Money
Market Rate Loans at such Money Market Rate. The proceeds of each Swing
Line Loan will be made available by Chase to the Company by crediting the
account of the Company at Chase with such proceeds. The proceeds of Swing Line
Loans may be used solely for the purposes referred to in subsection 3.2.
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(b) The Swing Line Loans shall be evidenced by a promissory note of
the Company substantially in the form of Exhibit C, with appropriate insertions
(the "SWING LINE NOTE"), payable to the order of Chase and representing the
obligation of the Company to pay the aggregate unpaid principal amount of the
Swing Line Loans, with interest thereon as prescribed in subsection 4.7. Chase
is hereby authorized to record the Borrowing Date, the amount of each Swing Line
Loan and the date and amount of each payment or prepayment of principal thereof,
on the schedule annexed to and constituting a part of the Swing Line Note and,
in the absence of manifest error, any such recordation shall constitute PRIMA
FACIE evidence of the accuracy of the information so recorded, PROVIDED that the
failure of Chase to make such recordation (or any error in such recordation)
shall not affect the obligations of the Company hereunder or under the Swing
Line Note. The Swing Line Note shall (a) be dated the Closing Date, (b) be
stated to mature on the Revolving Credit Termination Date and (c) bear interest
for the period from the date thereof on the unpaid principal amount thereof from
time to time outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, subsection 4.7.
(c) Chase at any time in its sole and absolute discretion may, and on
the fifteenth day (or if such day is not a Business Day, the next Business Day)
and the last Business Day of each month shall, on behalf of the Company (which
hereby irrevocably directs Chase to act on its behalf), request each Lender,
including Chase, to make a Revolving Credit Loan in an amount equal to such
▇▇▇▇▇▇'s Revolving Credit Commitment Percentage of the amount of the Swing Line
Loans (the "REFUNDED SWING LINE LOANS") outstanding on the date such notice is
given. Unless any of the events described in paragraph (f) of Section 9 shall
have occurred (in which event the procedures of paragraph (d) of this subsection
shall apply) each Lender shall make the proceeds of its Revolving Credit Loan
available to Chase for the account of Chase at the office of Chase located at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ prior to 12:00 Noon (New York City
time) in funds immediately available on the Business Day next succeeding the
date such notice is given. The proceeds of such Revolving Credit Loans shall be
immediately applied to repay the Refunded Swing Line Loans. Refunded Swing
Line Loans shall be initially ABR Loans or Eurodollar Loans.
(d) If prior to the making of a Revolving Credit Loan pursuant to
paragraph (c) of this subsection one of the events described in paragraph (f) of
Section 9 shall have occurred, each Lender will, on the date such Loan would
otherwise have been made, purchase an undivided participating interest in the
Refunded Swing Line Loans in an amount equal to its Revolving Credit Commitment
Percentage of such Refunded Swing Line Loans. Each Lender will immediately
transfer to Chase, in immediately available funds, the amount of its
participation and upon receipt thereof Chase will deliver to such Lender a Swing
Line Loan Participation Certificate dated the date of receipt of such funds and
in such amount.
(e) Whenever, at any time after Chase has received from any Lender
such ▇▇▇▇▇▇'s participating interest in a Swing Line Loan, Chase receives any
payment on account thereof, Chase will distribute to such Lender its
participating interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such ▇▇▇▇▇▇'s
participating interest was outstanding and funded) in like funds as received;
PROVIDED, HOWEVER, that in the event that such payment received by Chase is
25
required to be returned, such ▇▇▇▇▇▇ will return to Chase any portion thereof
previously distributed by Chase to it in like funds as such payment is required
to be returned by Chase.
3.8 PARTICIPATIONS. Each Lender's obligation to purchase
participating interests pursuant to subsections 3.4 and 3.7(d) is absolute and
unconditional as set forth in subsection 4.16.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF
CREDIT
4.1 PROCEDURE FOR BORROWING. (a) The Company may borrow under the
Commitments on any Working Day, if the borrowing is of Eurodollar Loans, or on
any Business Day, if the borrowing is of ABR Loans, PROVIDED that, with respect
to the borrowings to take place on the Closing Date, the Company shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, on the Closing
Date), and with respect to any subsequent borrowings, the Company shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time, (i) three Working
Days prior to the requested Borrowing Date if all or any part of the Loans are
to be Eurodollar Loans and (ii) one Business Day prior to the requested
Borrowing Date if the borrowing is to be solely of ABR Loans) specifying (A) the
amount of the borrowing, (B) whether such Loans are initially to be Eurodollar
Loans or ABR Loans, or a combination thereof, and (C) if the borrowing is to be
entirely or partly Eurodollar Loans, the length of the Interest Period for such
Eurodollar Loans. Upon receipt of such notice the Administrative Agent shall
promptly notify each Lender (which notice shall in any event be delivered to
each Lender by 4:00 P.M., New York City time, on such date). Not later than
12:00 Noon, New York City time, on the Borrowing Date specified in such notice,
each Lender shall make available to the Administrative Agent at the office of
the Administrative Agent specified in subsection 11.2 (or at such other location
as the Administrative Agent may direct) an amount in immediately available funds
equal to the amount of the Loan to be made by such Lender. ▇▇▇▇ proceeds
received by the Administrative Agent hereunder shall promptly be made available
to the Company by the Administrative Agent's crediting the account of the
Company, at the office of the Administrative Agent specified in subsection 11.2,
with the aggregate amount actually received by the Administrative Agent from the
Lenders and in like funds as received by the Administrative Agent.
(b) Any borrowing of Eurodollar Loans hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, (i) the aggregate principal amount of all Eurodollar Loans having the
same Interest Period shall not be less than $5,000,000, or a whole multiple of
$1,000,000 in excess thereof, and (ii) no more than ten Interest Periods shall
be in effect at any one time.
(c) Eurodollar Loans shall be made by each Lender at its Eurodollar
Lending Office and ABR Loans shall be made by each Lender at its ABR Lending
Office.
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4.2 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Company hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender (i) the then unpaid principal amount of each Revolving Credit Loan
of such Lender on the Revolving Credit Termination Date (or such earlier date on
which the Revolving Credit Loans become due and payable pursuant to Section 9)
and (ii) the principal amount of the Term Loan of such Lender, in accordance
with the applicable amortization schedule set forth in subsection 2.2 (or the
then unpaid principal amount of such Term Loans, on the date that any or all of
the Term Loans become due and payable pursuant to Section 9). The Company
hereby further agrees to pay interest on the unpaid principal amount of the
Loans from time to time outstanding from the date hereof until payment in full
thereof at the rates per annum, and on the dates, set forth in subsection 4.7.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Company to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 11.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Company to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Company and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 4.2(b) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Company therein recorded; PROVIDED, HOWEVER, that the failure
of any Lender or the Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Company to repay (with applicable interest) the Loans made to such Company
by such Lender in accordance with the terms of this Agreement.
(e) The Company agrees that, upon the request to the Company and the
Administrative Agent by any Lender, the Company will execute and deliver to such
Lender (i) a promissory note of the Company evidencing the Revolving Credit
Loans of such Lender, substantially in the form of Exhibit A, with appropriate
insertions as to date and principal amount (a "REVOLVING CREDIT NOTE"), (ii) a
promissory note of the Company evidencing the Swing Line Loans of such Lender,
substantially in the form of Exhibit B, with appropriate insertions as to date
and principal amount (a "SWING LINE NOTE"), and (iii) a promissory note of the
Company evidencing the Term Loans of such Lender, substantially in the form of
Exhibit C with appropriate insertions as to date and principal amount (a
"TERM NOTE").
4.3 CONVERSION OPTIONS. The Company may elect from time to time to
convert Eurodollar Loans into ABR Loans by giving the Administrative Agent
irrevocable notice of such election, to be received by the Administrative Agent
prior to 12:00 Noon,
27
New York City time, at least three Working Days prior to the proposed conversion
date, PROVIDED that any such conversion of Eurodollar Loans shall only be made
on the last day of an Interest Period with respect thereto. The Company may
elect from time to time to convert all or a portion of the ABR Loans (other than
Swing Line Loans) then outstanding to Eurodollar Loans by giving the
Administrative Agent irrevocable notice of such election, to be received by the
Administrative Agent prior to 12:00 Noon, New York City time, at least three
Working Days prior to the proposed conversion date, specifying the Interest
Period selected therefor, and, if no Default or Event of Default has occurred
and is continuing, such conversion shall be made on the requested conversion
date or, if such requested conversion date is not a Working Day, on the next
succeeding Working Day. Upon receipt of any notice pursuant to this subsection
4.3, the Administrative Agent shall promptly, but in any event by 4:00 P.M., New
York City time, notify each Lender thereof. All or any part of the outstanding
Loans (other than Swing Line Loans) may be converted as provided herein,
PROVIDED that partial conversions of Loans shall be in the aggregate principal
amount of $5,000,000, or a whole multiple of $1,000,000 in excess thereof, and
the aggregate principal amount of the resulting Eurodollar Loans outstanding in
respect of any one Interest Period shall be at least $5,000,000 or a whole
multiple of $1,000,000 in excess thereof.
4.4 CHANGES OF COMMITMENT AMOUNTS. (a) The Company shall have the
right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate or, from time to time, reduce the Revolving Credit
Commitments subject to the provisions of this subsection 4.4. To the extent, if
any, that the sum of the amount of the Revolving Credit Loans, Swing Line Loans
and Revolving L/C Obligations then outstanding and the amounts available to be
drawn under outstanding Letters of Credit exceeds the amount of the Revolving
Credit Commitments as then reduced, the Company shall be required to make a
prepayment equal to such excess amount, the proceeds of which shall be applied
FIRST, to payment of the Swing Line Loans then outstanding, SECOND, to payment
of the Revolving Credit Loans then outstanding, THIRD, to payment of any
Revolving L/C Obligations then outstanding, and LAST, to cash collateralize any
outstanding Letters of Credit on terms reasonably satisfactory to the
Administrative Agent. Any such termination of the Revolving Credit Commitments
shall be accompanied by prepayment in full of the Revolving Credit Loans, Swing
Line Loans and Revolving L/C Obligations then outstanding and by cash
collateralization of any outstanding Letter of Credit on terms reasonably
satisfactory to the Administrative Agent.
(b) Interest accrued on the amount of any partial prepayment pursuant
to this subsection 4.4 to the date of such partial prepayment shall be paid on
the Interest Payment Date next succeeding the date of such partial prepayment.
In the case of the termination of the Revolving Credit Commitments, interest
accrued on the amount of any prepayment relating thereto and any unpaid
commitment fee accrued hereunder shall be paid on the date of such prepayment or
termination, as the case may be. Any such partial reduction of the Revolving
Credit Commitments shall be in an amount of $2,500,000 or a whole multiple of
$1,000,000 in excess thereof, and shall, in each case, reduce permanently the
amount of the Revolving Credit Commitments, then in effect.
4.5 OPTIONAL PREPAYMENTS. The Company may at any time and from time
to time prepay Loans, in whole or in part, without premium or penalty, upon at
least one
28
Business Days' irrevocable notice to the Administrative Agent in the case of ABR
Loans, and three Business Days' irrevocable notice to the Administrative Agent
in the case of Eurodollar Loans, specifying the date and amount of prepayment
and whether the prepayment is of Revolving Credit Loans or Term Loans, PROVIDED
that Eurodollar Loans may not be optionally prepaid on other than the last day
of any Interest Period with respect thereto. Upon receipt of such notice the
Administrative Agent shall promptly notify each Lender thereof. If such notice
is given, the Company shall make such prepayment, and the payment amount
specified in such notice shall be due and payable, on the date specified
therein. Accrued interest on any Notes or on the amount of any Loans paid in
full pursuant to this subsection 4.5 shall be paid on the date of such
prepayment. Accrued interest on the amount of any partial prepayment shall be
paid on the Interest Payment Date next succeeding the date of such partial
prepayment (or in the case of prepayment in full of Term Loans, on the date of
such payment. Partial prepayments (i) of Term Loans shall be in an aggregate
principal amount equal to the lesser of (A) $2,500,000 or a whole multiple of
$1,000,000 in excess thereof and (B) the aggregate unpaid principal amount of
the Term Loans, as the case may be, and (ii) of Revolving Credit Loans shall be
in an aggregate principal amount equal to the lesser of (A) $2,500,000 or a
whole multiple of $1,000,000 in excess thereof and (B) the aggregate unpaid
principal amount of the Revolving Credit Loans, as the case may be. Except as
otherwise may be agreed by the Company and the Required Lenders, any prepayment
of the Term Loans pursuant to this subsection 4.5 shall be applied, FIRST, to
the installments of the Term Loans scheduled to be paid during the next twelve
months after the date of such prepayment and SECOND the balance, if any, to the
remaining installments of the Term Loans on a PRO RATA basis. Amounts prepaid
on account of the Term Loans pursuant to this subsection 4.5 or otherwise may
not be reborrowed.
4.6 MANDATORY PREPAYMENTS. (a) Subject to the provisions of
subsection 8.5 promptly following the consummation of any Asset Sale by the
Company or any of its Subsidiaries, in the case of cash proceeds, and promptly
following receipt of cash proceeds representing payments under notes or other
securities received in connection with any non-cash consideration obtained in
connection with such Asset Sale, the Company shall, to the extent that the
cumulative amount of Net Proceeds received after the Closing Date exceeds
$20,000,000, apply such amount of the Net Proceeds of such Asset Sale in excess
of $20,000,000, FIRST, to the installments of the Term Loans scheduled to be
paid during the next twelve months after the date of such prepayment and SECOND
to the remaining installments of the Term Loans on a PRO RATA basis.
(b) Upon receipt by the Administrative Agent of the Net Proceeds
required to be paid to the Lenders hereunder from any Asset Sale (i) consisting
of the sale of all of the shares of stock of any Subsidiary Guarantor, the
obligations of such Subsidiary Guarantor under its Guarantee shall automatically
be discharged and released without any further action by the Administrative
Agent or any Lender, PROVIDED that the Administrative Agent and the Lenders
agree, upon the request of the Company, to execute and deliver any instrument or
other document in a form acceptable to the Administrative Agent which may
reasonably be required to evidence such discharge and release and (ii) in
connection with the sale or other disposition of the capital stock of a
Subsidiary of the Company, the Administrative Agent shall release to the pledgor
thereof, without representation, warranty or recovery, express or
29
implied, the capital stock of such Subsidiary held by it as Pledged Stock (as
defined in the relevant Pledge Agreement), if any, under the relevant Pledge
Agreement.
(c) The Company shall give the Administrative Agent (which shall
promptly notify each Lender) at least one Business Day's notice of each
prepayment pursuant to this subsection 4.6 setting forth the date and amount
thereof. Prepayment of Eurodollar Loans, if not on the last day of the Interest
Period with respect thereto, shall, at the Company's option as long as no
Default or Event of Default has occurred and is continuing, be prepaid subject
to the provisions of subsection 4.21 or such Net Proceeds (after application to
any ABR Loans) shall be deposited with the Administrative Agent as cash
collateral for such Eurodollar Loans on terms reasonably satisfactory to the
Administrative Agent and thereafter shall be applied to the prepayment of the
Term Loans constituting Eurodollar Loans on the last day of the respective
Interest Periods for such Eurodollar Loans next ending most closely to the date
of receipt of such Net Proceeds. After such application, unless a Default or an
Event of Default shall have occurred and be continuing, any remaining interest
earned on such cash collateral shall be paid to the Company.
(d) Amounts prepaid on account of the Term Loans pursuant to this
subsection 4.6 or otherwise may not be reborrowed. Accrued interest on any Term
Loans prepaid pursuant to this subsection 4.6 shall be paid on the Interest
Payment Date next succeeding the date of any partial prepayment and on the date
of such payment or prepayment in the case of a payment or prepayment in full of
the Term Loans.
(e) Upon the Revolving Credit Termination Date the Company shall,
with respect to each then outstanding Letter of Credit, if any, cause such
Letter of Credit to be cancelled without such Letter of Credit being drawn upon.
4.7 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto on the unpaid principal amount thereof at a rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable Margin.
(b) ABR Loans shall bear interest for the period from and including
the date thereof until maturity thereof on the unpaid principal amount thereof
at a rate per annum equal to the ABR plus the Applicable Margin.
(c) Money Market Rate Loans shall bear interest for the period from
and including the date thereof until maturity thereof on the unpaid principal
amount thereof at a rate per annum equal to the Money Market Rate plus the
Applicable Margin for ABR Loans.
(d) If all or a portion of (i) the principal amount of any of the
Loans or (ii) any interest payable thereon shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amount
shall, without limiting the rights of the Lenders under Section 9, bear interest
at a rate per annum which is (x) in the case of overdue principal, 2% above the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this subsection or (y) in the case of overdue interest, 2% above
30
the rate described in paragraph (b) of this subsection, in each case from the
date of such nonpayment until such amount is paid in full (as well after as
before judgment).
(e) Interest shall be payable in arrears on each Interest Payment
Date; PROVIDED that interest accruing pursuant to paragraph (c) of this
subsection shall be payable on demand.
4.8 COMPUTATION OF INTEREST AND FEES. (a) Interest in respect of ABR
Loans at any time the ABR is calculated based on the Prime Rate and all fees
hereunder shall be calculated on the basis of a 365 or 366, as the case may be,
day year for the actual days elapsed. Interest in respect of Eurodollar Loans
and ABR Loans at any time the ABR is not calculated based on the Prime Rate
shall be calculated on the basis of a 360 day year for the actual days elapsed.
The Administrative Agent shall as soon as practicable notify the Company and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve
Requirement shall become effective as of the opening of business on the day on
which such change in the ABR or the Eurocurrency Reserve Requirement, as the
case may be, becomes effective. The Administrative Agent shall as soon as
practicable notify the Company and the Lenders of the effective date and the
amount of each such change.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Company and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Company, deliver to the
Company a statement showing the quotations used by the Administrative Agent in
determining the Eurodollar Rate.
4.9 COMMITMENT FEES. The Company agrees to pay to the Administrative
Agent, for the account of each Lender, a commitment fee of 0.375% per annum from
and including the Closing Date to but excluding the Revolving Credit Termination
Date on the amount of such Lender's Available Revolving Credit Commitment during
the period for which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Credit
Termination Date or such earlier date as the Revolving Credit Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the date hereof, PROVIDED that, from and after the first Adjustment
Date, the rate for such commitment fee will be adjusted, if required, on each
Adjustment Date, to the rate set forth on ANNEX A hereto opposite the Leverage
Ratio Level of the Company in effect on such Adjustment Date and PROVIDED,
FURTHER, that, in the event that the financial statements required to be
delivered pursuant to subsection 7.1(a) or 7.1(b), as applicable, and the
related certificate required pursuant to subsection 7.2(b), are not delivered
when due, then, during the period from the date upon which such financial
statements were required to be delivered until one Business Day following the
date upon which they actually are delivered, the Leverage Ratio Level I shall
be deemed to be in effect for the purposes of determining the rate for such
commitment fee for such period.
4.10 CERTAIN FEES. The parties hereto acknowledge and agree that the
Company has agreed to pay to Chase the fees set forth in the letter agreement
dated as of August 9, 1996 between the Company, Chase and Chase Securities Inc.
The parties hereto acknowledge and agree that the Company's only obligation is
to pay such fees to Chase in
31
accordance with the terms of such letter agreement and the Company is not liable
or otherwise obligated to the Lenders to pay such fees.
4.11 LETTER OF CREDIT FEES. (a) In lieu of any letter of credit
commissions and fees provided for in any L/C Application relating to Standby
L/Cs (other than standard administrative issuance, amendment and negotiation
fees), the Company agrees to pay the Administrative Agent, for the account of
the Issuing Lender and the Participating Lenders, with respect to each Standby
L/C, a Standby L/C fee equal to the Applicable Margin for Eurodollar Loans then
in effect plus 1/4 of 1% per annum (of which the Issuing Lender shall retain for
its own account, as the Issuing Lender and not on account of its L/C
Participating Interest therein, 1/4 of 1% per annum) on the amount available to
be drawn under each Standby L/C payable, in arrears, on the last day of each
fiscal quarter of the Company.
(b) In lieu of any letter of credit commissions and fees provided for
in any L/C Application relating to Commercial L/Cs (other than standard
administrative issuance, amendment and negotiation fees), the Company agrees to
pay the Administrative Agent, for the account of the Issuing Lender and the
Participating Lenders, with respect to each Commercial L/C, a Commercial L/C fee
of 3/4 of 1% (of which the Issuing Lender shall retain for its own account, as
the Issuing Lender and not on account of its L/C Participating Interest therein,
1/4 of 1%) on the maximum face amount of each Commercial L/C payable on the date
such Commercial L/C is issued.
(c) In connection with any payment of fees pursuant to this
subsection 4.11, the Administrative Agent agrees to provide to the Company a
statement of any such fees so paid; PROVIDED that the failure by the
Administrative Agent to provide the Company with any such invoice shall not
relieve the Company of its obligation to pay such fees.
4.12 LETTER OF CREDIT RESERVES. (a) If any Change in Law after the
date of this Agreement shall either (i) impose, modify, deem or make applicable
any reserve, special deposit, assessment or similar requirement against letters
of credit issued by the Issuing Lender or (ii) impose on the Issuing Lender any
other condition regarding this Agreement or any Letter of Credit, and the result
of any event referred to in clause (i) or (ii) above shall be to increase the
cost to the Issuing Lender of issuing or maintaining any Letter of Credit (which
increase in cost shall be the result of the Issuing Lender's reasonable
allocation of the aggregate of such cost increases resulting from such events),
then, upon demand by the Issuing Lender, the Company shall immediately pay to
the Issuing Lender, from time to time as specified by the Issuing Lender,
additional amounts which shall be sufficient to compensate the Issuing 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 ABR
plus the Applicable Margin for ABR Loans. A certificate submitted by the
Issuing Lender to the Company concurrently with any such demand by the Issuing
Lender, shall be conclusive, absent manifest error, as to the amount thereof.
(b) In the event that at any time after the date hereof any Change in
Law with respect to the Issuing Lender shall, in the opinion of the Issuing
Lender, require that any obligation under any Letter of Credit be treated as an
asset or otherwise be included for purposes of calculating the appropriate
amount of capital to be maintained by the Issuing
32
Lender or any corporation controlling the Issuing Lender, and such Change in Law
shall have the effect of reducing the rate of return on the Issuing Lender's or
such corporation's capital, as the case may be, as a consequence of the Issuing
Lender's obligations under such Letter of Credit to a level below that which the
Issuing Lender or such corporation, as the case may be, could have achieved but
for such Change in Law (taking into account the Issuing Lender's or such
corporation's policies, as the case may be, with respect to capital adequacy) by
an amount deemed by the Issuing Lender to be material, then from time to time
following notice by the Issuing Lender to the Company of such Change in Law,
within 15 days after demand by the Issuing Lender, the Company shall pay to the
Issuing Lender such additional amount or amounts as will compensate the Issuing
Lender or such corporation, as the case may be, for such reduction. If the
Issuing Lender becomes entitled to claim any additional amounts pursuant to this
subsection 4.12(b), it shall promptly notify the Company of the event by reason
of which it has become so entitled. A certificate submitted by the Issuing
Lender to the Company concurrently with any such demand by the Issuing Lender,
shall be conclusive, absent manifest error, as to the amount thereof.
(c) The Company agrees that the provisions of the foregoing
paragraphs (a) and (b) and the provisions of each L/C Application providing for
reimbursement or payment to the Issuing Lender in the event of the imposition or
implementation of, or increase in, any reserve, special deposit, capital
adequacy or similar requirement in respect of the Letter of Credit relating
thereto shall apply equally to each Participating Lender in respect of its L/C
Participating Interest in such Letter of Credit, as if the references in such
paragraphs and provisions referred to, where applicable, such Participating
Lender or any corporation controlling such Participating Lender.
4.13 FURTHER ASSURANCES. The Company hereby agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender to effect more fully the
purposes of this Agreement and the issuance of Letters of Credit hereunder. The
Company further agrees to execute any and all instruments reasonably requested
by the Issuing Lender in connection with the obtaining and/or maintaining of any
insurance coverage applicable to any Letters of Credit.
4.14 OBLIGATIONS ABSOLUTE. The payment obligations of the Company
under this Agreement with respect to the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:
(i) the existence of any claim, set-off, defense or other right
which the Company or any of its Subsidiaries 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), the Issuing Lender, the Administrative Agent or any
Lender, or any other Person, whether in connection with this
Agreement, the Related Documents, any Credit Documents, the
transactions contemplated herein, 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
33
or any statement therein being untrue or inaccurate in any respect,
except where acceptance thereof constitutes gross negligence or
willfull misconduct on the part of the Issuing Lender;
(iii) payment by the 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, except where such payment
constitutes gross negligence or wilful misconduct on the part of the
Issuing Lender except where, such payment constitutes gross negligence
or willfull misconduct on the part of the Issuing Lender; or
(iv) any other circumstances or happening whatsoever, whether or
not similar to any of the foregoing, except for any such circumstances
or happening constituting gross negligence or willful misconduct on
the part of the Issuing Lender.
4.15 ASSIGNMENTS. No Participating Lender's participation in any
Letter of Credit or any of its rights or duties hereunder shall be subdivided,
assigned or transferred (other than in connection with a transfer of part or all
of such Participating Lender's Revolving Credit Commitment in accordance with
subsection 11.6) without the prior written consent of the relevant Issuing
Lender, which consent will not be unreasonably withheld. Such consent may be
given or withheld without the consent or agreement of any other Participating
Lender. Notwithstanding the foregoing, a Participating Lender may
subparticipate its L/C Participating Interest without obtaining the prior
written consent of the relevant Issuing Lender.
4.16 PARTICIPATIONS. Each Lender's obligation to purchase
participating interests pursuant to subsections 3.4 and 3.7(d) shall be absolute
and unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Issuing Lender, the Company,
Holdings or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of the Company; (iv) any breach of this
Agreement by the Company or any other Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
4.17 INABILITY TO DETERMINE INTEREST RATE. In the event that the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that (a) by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest Period with respect
to (i) proposed Loans that the Company has requested be made as Eurodollar
Loans, (ii) any Eurodollar Loans that will result from the requested conversion
of all or part of ABR Loans into Eurodollar Loans or (iii) the continuation of
any Eurodollar Loan as such for an additional Interest Period, or (b) dollar
deposits in the relevant amount and for the relevant period with respect to any
such Eurodollar Loan are not available to any of the Lenders in their respective
Eurodollar Lending Offices' interbank eurodollar market, the Administrative
Agent shall forthwith give notice of such determination, confirmed in
34
writing, to the Company and the Lenders at least one day prior to, as the case
may be, the requested Borrowing Date, the conversion date or the last day of
such Interest Period. If such notice is given (i) any requested Eurodollar
Loans shall be made as ABR Loans, (ii) any ABR Loans that were to have been
converted to Eurodollar Loans shall be continued as ABR Loans, and (iii) any
outstanding Eurodollar Loans shall be converted, on the last day of the then
current Interest Period applicable thereto, into ABR Loans. Until such notice
has been withdrawn by the Administrative Agent, no further Eurodollar Loans
shall be made.
4.18 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing of any
Loans (other than Swing Line Loans) by the Company from the Lenders, each
payment by the Company on account of any fee hereunder (other than as set forth
in subsections 4.9, 4.10 and 4.11), and payments to Lenders in respect of
proceeds of Collateral and any reduction of the Term Loan Commitments
and the Revolving Credit Commitments of the Lenders hereunder shall
be made PRO RATA according to the relevant Commitment Percentages of the
Lenders. Each payment (including each prepayment) by the Company on account of
principal of and interest on the Loans (other than Swing Line Loans and other
than as set forth in subsections 4.19, 4.20 and 4.21) shall be made PRO RATA
according to the relevant Commitment Percentages of the Lenders. All payments
(including prepayments) to be made by the Company on account of principal,
interest and fees shall be made without set-off or counterclaim and shall be
made to the Administrative Agent, for the account of the Lenders, at the
Administrative Agent's office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America and in immediately
available funds. The Administrative Agent shall promptly distribute such
payments ratably to each Lender in like funds as received. If any payment
hereunder (other than payments on Eurodollar Loans) becomes due and payable on a
day other than a Business Day, such payment shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a Eurodollar Loan becomes due and payable on a day other than a
Working Day, the maturity thereof shall be extended to the next succeeding
Working Day unless the result of such extension would be to extend such payment
into another calendar month in which event such payment shall be made on the
immediately preceding Working Day.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will not make
the amount which would constitute its relevant Commitment Percentage of the
borrowing on such date available to the Administrative Agent, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such Borrowing Date in accordance with subsection 4.1
and the Administrative Agent may, in reliance upon such assumption, make
available to the Company a corresponding amount. If such amount is made
available to the Administrative Agent by such Lender on a date after such
Borrowing Date, such Lender shall pay to the Administrative Agent on demand an
amount equal to the product of (i) the daily average Federal funds rate during
such period as quoted by the Administrative Agent, times (ii) the amount of such
Lender's relevant Commitment Percentage of such borrowing not made available
on the Borrowing Date, times (iii) a fraction the numerator of which is the
number of days that elapse from and including such Borrowing Date to the date
on which such ▇▇▇▇▇▇'s relevant Commitment Percentage of such borrowing shall
have become immediately available to the Administrative Agent and the
denominator of which is 360. A certificate of the Administrative Agent
submitted to any
35
Lender with respect to any amounts owing under this subsection 4.18(b) shall be
conclusive, absent manifest error. If such ▇▇▇▇▇▇'s relevant Commitment
Percentage of such borrowing is not in fact made available to the Administrative
Agent by such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall be entitled to recover such amount with interest
thereon at the rate per annum applicable to ABR Loans hereunder and
on demand, from the Company, without prejudice to any rights which the
Company or the Administrative Agent may have against such Lender hereunder.
Nothing contained in this subsection 4.18(b) shall relieve any Lender which
has failed to make available its ratable portion of any borrowing hereunder
from its obligation to do so in accordance with the terms hereof.
(c) The failure of any Lender to make the Loan to be made by it on
any Borrowing Date shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on such Borrowing Date.
(d) All payments and optional prepayments (other than prepayments as
set forth in subsection 4.20 with respect to increased costs) of Eurodollar
Loans hereunder shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Loans with the same Interest Period shall not be less than $5,000,000
or a whole multiple of $1,000,000 in excess thereof.
(e) Each Lender, Assignee and Participant that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of
America, or any estate or trust that is subject to U.S. federal income taxation
regardless of the source of its income (a"Non-U.S. Lender") shall deliver to the
Company and the Administrative Agent, and if applicable, the assigning Lender
(or, in the case of a Participant, to the Lender from which the related
participation shall have been purchased) on or before the date on which it
becomes a party to this Agreement (or, in the case of a Participant, on or
before the date on which such Participant purchases the related participation)
either:
(A) (x) two duly completed and signed copies of either Internal
Revenue Service Form 1001 (relating to such Non-U.S. Lender and entitling
it to a complete exemption from withholding of U.S. taxes on all amounts
to be received by such Non-U.S. Lender pursuant to this Agreement and
the other Credit Documents) or Form 4224 (relating to all amounts to be
received by such Non-U.S. Lender pursuant to this Agreement and the other
Credit Documents), or successor and related applicable forms, as the
case may be, and (y) two duly completed and signed copies of the Internal
Revenue Service Form W-8 or W-9, or successor and related applicable
forms, as the case may be; or
(B) in the case of a Non-U.S. Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and that does not comply with
the requirements of clause (A) hereof, (x) a statement in the form of
Exhibit I (or such other form of statement as shall be reasonably
requested by the Company from time to time) to the effect that such Non-
U.S. Lender is eligible for a complete exemption from withholding of
U.S. Taxes under Code Section 871(h) or 881(c), and (y) two duly completed
and signed copies of Internal Revenue Service Form W-8 or successor and
related applicable form (it being understood and agreed that no
Participant and, without the prior written consent of the Company
described in clause (C) of the proviso to the first sentence of
subsection 16.6(c), no Assignee shall be entitled to deliver any forms
or statements pursuant to this clause (B), but rather shall be
required to deliver forms pursuant to clause (A) of this subsection
8.18(e)).
Each Non-U.S. Lender that delivers a statement in the form of Exhibit I (or
such other form of statement as shall have been requested by the Company)
agrees that it shall be the sole beneficial and record owner of Loans or
Notes held by it. Further, each Non- U.S. ▇▇▇▇▇▇ agrees (i) to deliver to
the Company and the Administrative Agent, and if applicable, the assigning
Lender (or, in the case of a Participant, to the Lender
36
from which the related participation shall have been purchased) two further duly
completed and signed copies of such Forms 1001, 4224, W-8 or W-9, as the case
may be, or successor and related applicable forms, on or before the date that
any such form expires or becomes obsolete and promptly after the occurrence of
any event requiring a change from the most recent form(s) previously delivered
by it to the Company (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) in accordance with
applicable U.S. laws and regulations, (ii) in the case of a Non-U.S. Lender
that delivers a statement in the form of Exhibit I (or such other form of
statement as shall have been requested by the Company), to deliver to the
Company and the Administrative Agent, and if applicable, the assigning Lender,
such statement on an annual basis on the anniversary of the date on which
such Non-U.S. Lender became a party to this Agreement and to deliver promptly
to the Company and the Administrative Agent, and if applicable, the assigning
Lender, such additional statements and forms as shall be reasonably requested
by the Company from time to time, and (iii) to notify promptly the Company and
the Administrative Agent (or, in the case of a Participant, the Lender from
which the related participation shall have been purchased) if it is no longer
able to deliver, or if it is required to withdrawn or cancel, any form or
statement previously delivered by it pursuant to this subsection 4.18(e).
Each Non-U.S. ▇▇▇▇▇▇ agrees to indemnify and hold harmless the Company from
and against any taxes, penalties, interest or other costs or losses
(including, without limitation, reasonable attorney's fees and expenses)
incurred or payable by the Company as a result of the failure of the Company
to comply with its obligations to deduct or withhold any U.S. Taxes from any
payments made pursuant to this Agreement to such Non-U.S. Lender or the
Administrative Agent which failure resulted from the Company's reliance on
any form, statement, certificate or other information provided to it by such
Non-U.S. Lender pursuant to clause (B) or clause (ii) of this
subsection 4.18(e). The Company hereby agrees that for so long as a Non-U.S.
Lender complies with this subsection 4.18 Company shall not withhold any
amounts from any payments made pursuant to this Agreement to such Non-U.S.
Lender, unless the Company reasonably determines that it is required by law
to withhold or deduct any amounts from any payments made to such Non-U.S.
Lender shall not be required to deliver any form or statement pursuant to
the immediately preceding sentences in this subsection 4.18(e) that such
Non-U.S. Lender is not legally able to deliver (it being understood and
agreed that the Company shall withhold or deduct such amounts from any
payments made to such Non-U.S. Lender that the Company reasonably determines
are required by law). If any Credit Party other than the Company makes any
payment to any Non-U.S. Lender and such Credit Party as if such Credit
Party were the Company (but a Non-U.S. Lender shall not be required to
provide any form or make any statement to any such Credit Party unless such
Non-U.S. Lender has received a request to do so from such Credit Party and has
a reasonable time to comply with such request.
4.19 ILLEGALITY. Notwithstanding any other provisions herein, if any
Requirement of Law or any change therein or in the interpretation or application
thereof occurring after the date that any lender becomes a Lender party to this
Agreement, shall make it unlawful for such Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement, the commitment of such Lender hereunder
to make Eurodollar Loans or to convert all or a portion of ABR Loans into
Eurodollar Loans shall forthwith be cancelled and such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall, if required by law and if such
Lender so requests, be converted automatically to ABR Loans on the date
specified by such Lender in such request. To the extent that such affected
Eurodollar Loans are converted into ABR Loans, all payments of principal which
would otherwise be applied to such Eurodollar Loans shall be applied instead to
such Lender's ABR Loans. The Company hereby agrees promptly to pay any Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
any costs incurred by such Lender in making any conversion in accordance with
this subsection 4.19 including, but not limited to, any interest or fees payable
by such Lender to lenders of funds obtained by it in order to make or maintain
its Eurodollar Loans hereunder (such ▇▇▇▇▇▇'s notice of such costs, as certified
to the Company through the Administrative Agent, to be conclusive absent
manifest error).
37
4.20 REQUIREMENTS OF LAW. (a) In the event that, at any time after
the date hereof, any Requirement of Law or any change therein or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority:
(i) does or shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any Eurodollar
Loans made by it, or change the basis of taxation of payments to such
Lender of principal, commitment fee, interest or any other amount
payable hereunder (except for changes in the rate of tax on the
overall net income of such Lender);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender which are not
otherwise included in the determination of the Eurodollar Rate; or
(iii) does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender of
making, converting, renewing or maintaining advances or extensions of credit or
to reduce any amount receivable hereunder, in each case, in respect of its
Eurodollar Loans, then, in any such case, the Company shall promptly pay such
Lender, on demand, any additional amounts necessary to compensate such Lender
for such additional cost or reduced amount receivable which such Lender deems to
be material as determined by such Lender with respect to such Eurodollar Loans,
together with interest on each such amount from the date demanded until payment
in full thereof at a rate per annum equal to the ABR plus the Applicable Margin
for ABR Loans.
(b) In the event that at any time after the date hereof, any Change
in Law with respect to any Lender shall, in the opinion of such Lender, require
that any Commitment of such Lender be treated as an asset or otherwise be
included for purposes of calculating the appropriate amount of capital to be
maintained by such Lender or any corporation controlling such Lender, and such
Change in Law shall have the effect of reducing the rate of return on such
▇▇▇▇▇▇'s or such corporation's capital, as the case may be, as a consequence of
such ▇▇▇▇▇▇'s obligations hereunder to a level below that which such Lender or
such corporation, as the case may be, could have achieved but for such Change in
Law (taking into account such ▇▇▇▇▇▇'s or such corporation's policies, as the
case may be, with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time following notice by such ▇▇▇▇▇▇ to
the Company of such Change in Law as provided in paragraph (c) of this
subsection 4.20, within 15 days after demand by such Lender, the Company shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or such corporation, as the case may be, for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection 4.20, it shall promptly notify the Company, through
the Administrative Agent, of the event by reason of which it has become so
entitled. If any Lender has notified the Company through the Administrative
Agent of any increased costs pursuant to paragraph (a) of this subsection 4.20,
the Company at any time thereafter may, upon at least two Working Days' notice
to the Administrative Agent (which shall promptly notify the Lenders thereof),
and subject to subsection 4.21, prepay (or convert into ABR Loans) all (but not
a part) of the Eurodollar Loans then outstanding. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of paragraph (a) of
this subsection 4.20 with respect to such Lender, it will, if requested by the
Company and to the extent permitted
38
by law or by the relevant Governmental Authority, endeavor in good faith to
avoid or minimize the increase in costs or reduction in payments resulting from
such event (including, without limitation, endeavoring to change its Eurodollar
Lending Office); PROVIDED, HOWEVER, that such avoidance or minimization can be
made in such a manner that such Lender, in its sole determination, suffers no
economic, legal or regulatory disadvantage. If any Lender has notified the
Company, through the Administrative Agent, of any increased costs pursuant to
paragraph (b) of this subsection 4.20, the Company at any time thereafter may,
upon at least three Business Days' notice to the Administrative Agent (which
shall promptly notify the Lenders thereof), and subject to subsection 4.21,
reduce or terminate the Revolving Credit Commitments in accordance with
subsection 4.4.
(d) A certificate submitted by such ▇▇▇▇▇▇, through the
Administrative Agent, to the Company shall be conclusive in the absence of
manifest error. The covenants contained in this subsection 4.20 shall survive
the termination of this Agreement and payment of the outstanding Notes.
4.21 INDEMNITY. The Company agrees to indemnify each Lender and to
hold such Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Company in payment of the
principal amount of or interest on any Eurodollar Loans of such Lender,
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to make
or maintain its Eurodollar Loans hereunder, (b) default by the Company in making
a borrowing of Eurodollar Loans after the Company has given a notice in
accordance with subsection 4.1 or in making a conversion of ABR Loans to
Eurodollar Loans after the Company has given notice in accordance with
subsection 4.3, (c) default by the Company in making any prepayment of
Eurodollar Loans after the Company has given a notice in accordance with
subsections 4.5 and 4.6 or (d) a payment or prepayment of a Eurodollar Loan or a
Money Market Rate Loan or conversion of any Eurodollar Loan into an ABR Loan, in
either case on a day which is not the last day of an Interest Period with
respect thereto (or, with respect to a Money Market Rate Loan, the maturity date
thereof), including, but not limited to, any such loss or expense arising from
interest or fees payable by such Lender to lenders of funds obtained by it in
order to maintain its Eurodollar Loans hereunder. This covenant shall survive
termination of this Agreement and payment of the outstanding Obligations.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
continue and make the Loans and to induce the Issuing Lenders to issue, and the
Participating Lenders to participate in, the Letters of Credit, the Company
hereby represents and warrants to each Lender and the Administrative Agent, on
and as of the Closing Date and on the date of each Loan made or Letter of Credit
issued thereafter, that:
5.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Credit Party and
its Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate power and authority
39
and the legal right to own and operate its property, to lease the property it
operates and to conduct the business in which it is currently engaged, except to
the extent that the failure to possess such corporate power and authority and
such legal right would not, in the aggregate, have a Material Adverse Effect,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not have Material Adverse Effect and (d) is in
compliance with all Requirements of Law (including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, any so-
called "Superfund" or "Superlien" law, or any applicable federal, state, local
or other statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any Hazardous Materials), except to the extent that the failure to
comply therewith would not, in the aggregate, have a Material Adverse Effect.
5.2 CORPORATE POWER; AUTHORIZATION. Each Credit Party has the
corporate power and authority and the legal right to make, deliver and perform
the Credit Documents to which it is a party and to pledge the Pledged Stock
pursuant to the Pledge Agreement to which it is a party, and the Company has the
corporate power and authority and legal right to borrow hereunder and to have
Letters of Credit issued for its account hereunder. Each Credit Party has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party, the pledge of the
Pledged Stock pursuant to the Pledge Agreement to which it is a party and, in
case of the Company, to authorize the borrowings hereunder and the issuance of
Letters of Credit for its account hereunder. No consent or authorization of, or
filing with, any Person (including, without limitation, any Governmental
Authority) is required in connection with the execution, delivery or performance
by any Credit Party, or the use of proceeds of the Loans on the Closing Date as
contemplated hereby, or the validity or enforceability against any Credit Party,
of any Credit Document, to the extent that it is a party thereto, or the pledge
of the Pledged Stock pursuant to the Pledge Agreements, or the guarantee of the
Obligations pursuant to the Guarantees.
5.3 ENFORCEABLE OBLIGATIONS. Each of the Credit Documents has been
duly executed and delivered on behalf of the Credit Party thereto and each of
such Credit Documents constitutes the legal, valid and binding obligation of
such Credit Party, enforceable against such Credit Party in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
5.4 NO LEGAL BAR. The performance of each Credit Document, the
pledge of the Pledged Stock pursuant to the Pledge Agreements, the guarantee of
the Obligations pursuant to the Guarantees, the use of the proceeds of the Loans
and of drawings under the Letters of Credit will not violate any Requirement of
Law or any Contractual Obligation applicable to or binding upon any Credit
Party, any of its Subsidiaries or any of its properties or assets, which
violations, individually or in the aggregate, would have a material adverse
effect on the ability of such Credit Party to perform its obligations under the
Credit Documents to the extent that it is a party thereto, or which would give
rise to any liability on
40
the part of the Administrative Agent or any Lender, or which would have a
Material Adverse Effect, and will not result in the creation or imposition of
(or the obligation to create or impose) any Lien (other than liens created
pursuant to the Credit Documents) on any of its or their respective properties
or assets pursuant to any Requirement of Law applicable to it or them, as the
case may be, or any of its or their Contractual Obligations, except for the
Liens arising under the Pledge Agreements.
5.5 NO MATERIAL LITIGATION. No litigation or investigation known to
the Company through receipt of written notice or proceeding of or by any
Governmental Authority or any other Person is pending against any Credit Party
or any of its Subsidiaries, including, without limitation, the investigations,
actions, suits and proceedings described in Schedule 5.5, (a) with respect to
the validity, binding effect or enforceability of any Credit Document or with
respect to the Loans made hereunder, the use of proceeds thereof or of any
drawings under a Letter of Creditor and the other transactions contemplated
hereby or thereby, or (b) which would have a Material Adverse Effect.
5.6 FINANCIAL CONDITION. (a) The unaudited consolidated balance
sheet of Holdings as of June 30, 1996, a copy of which has heretofore been
furnished to each Lender, presents fairly, in all material respects, in
accordance with GAAP, the consolidated financial condition of Holdings as at
such date subject to normal year end audit adjustments and such balance sheet is
condensed and excludes detailed footnote disclosures. As of the date of such
balance sheet, except as disclosed in the Registration Statement, neither
Holdings nor any of its Subsidiaries had any material obligation, contingent or
otherwise, which was not reflected therein or in the notes thereto and which
would have a Material Adverse Effect.
(b) The audited consolidated balance sheet of Holdings and its
Subsidiaries at December 31, 1995, as restated, and the related consolidated
statements of operations, stockholders' equity and cash flows for the fiscal
year ended on such date, reported on by Deloitte & Touche LLP, copies of each of
which have heretofore been furnished to each Lender, present fairly in
accordance with GAAP in all material respects the consolidated financial
condition of Holdings and its Subsidiaries as at such date, and the consolidated
results of their operations and cash flows for the fiscal period then ended.
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the period involved (except as concurred in by the Accountants (as
defined below). Except as disclosed in the Registration Statement, neither
Holdings nor any of its Subsidiaries had, as of the date of such financial
statements, any material obligation, contingent or otherwise, which was not
reflected in the foregoing statements or in the notes thereto and which would
have a Material Adverse Effect.
(c) Except as set forth in the Registration Statement, since December
31, 1995, there have not been any events or states of fact which individually or
in the aggregate would have a Material Adverse Effect.
(d) Between December 31, 1995 and the Closing Date, except as
disclosed in Schedule 5.6(d), no dividends or other distributions have been
declared, paid or made upon
41
any shares of capital stock of the Company nor have any shares of capital stock
of the Company been redeemed, retired, purchased or otherwise acquired by the
issuer thereof.
5.7 INVESTMENT COMPANY ACT. Neither any Credit Party nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended).
5.8 FEDERAL REGULATION. No part of the proceeds of any of the Loans
or any drawing under a Letter of Credit will be used for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation G,
T, U or X of the Board. Neither the Company nor any of its Subsidiaries is
engaged or will engage, principally or as one of its important activities, in
the business of extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under said Regulation U.
5.9 NO DEFAULT. Neither the Company nor any of its Subsidiaries is
in default in the payment or performance of any of its or their Contractual
Obligations in any respect which would have a Material Adverse Effect. Neither
the Company nor any of its Subsidiaries is in default under any order, award or
decree of any Governmental Authority or arbitrator binding upon or affecting it
or them or by which any of its or their properties or assets may be bound or
affected in any respect which would have a Material Adverse Effect and no such
order, award or decree would materially adversely affect the ability of the
Company and its Subsidiaries taken as a whole to carry on their businesses as
presently conducted or the ability of any Credit Party to perform its
obligations under any Credit Document to which it is a party.
5.10 NO BURDENSOME RESTRICTIONS. Neither the Company nor any of its
Subsidiaries is a party to or is bound by any Contractual Obligation or subject
to any Requirement of Law or other corporate restriction which would have a
Material Adverse Effect.
5.11 TAXES. Each of the Company and its Subsidiaries has filed or
caused to be filed or has timely requested an extension to file or has received
an approved extension to file all tax returns which, to the knowledge of the
Company, are required to have been filed, and has paid all taxes shown to be due
and payable on said returns or extension requests or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided in the books of the Company or its Subsidiaries, as the
case may be), except any such filings or taxes, fees or charges, the making of
or the payment of which, or the failure to make or pay, would not have a
Material Adverse Effect, and, to the knowledge of the Company, no claims are
being asserted with respect to any such taxes, fees or other charges (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided in the books of the Company or its Subsidiaries, as the
case may
42
be), except as to any such taxes, fees or other charges, the payment of which,
or the failure to pay, would not have a Material Adverse Effect.
5.12 SUBSIDIARIES. As of the Closing Date, the Subsidiaries of the
Company listed on Schedule 5.12A constitute all of the Domestic Subsidiaries of
the Company and the Subsidiaries listed on Schedule 5.12B constitute all of the
Foreign Subsidiaries of the Company.
5.13 OWNERSHIP OF PROPERTY; LIENS. Except as set forth in the
Registration Statement, the Company and each of its Subsidiaries has good and
marketable title to, or valid and subsisting leasehold interests in, all its
respective material real property, and good title to all its respective material
other property, and none of such property is subject, except as permitted
hereunder, to any Lien (including, without limitation and subject to subsection
8.2 hereof, Federal, state and other tax liens).
5.14 ERISA. No "prohibited transaction" (as defined in Section 406
of ERISA or Section 4975 of the Code) or "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or Reportable Event (other than a Reportable
Event with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred during the five years preceding each date on
which this representation is made or deemed made with respect to any Plan in any
case the consequences of which would have a Material Adverse Effect. Except as
disclosed in Schedule 5.14, the present value of all accrued benefits under each
Single Employer Plan maintained by the Company or a Commonly Controlled Entity
(based on those assumptions used to fund such Plan) did not, as of the most
recent annual valuation date in respect of each such Plan, exceed the fair
market value of the assets of the Plan (including for these purposes accrued but
unpaid contributions) allocable to such benefits by more than $2,000,000, and
the present value of all accrued benefits under all such Single Employer Plans
under which the present value of benefits exceeds the assets allocable thereto
did not, as of such valuation date, exceed the fair market value of all such
Plans (including for these purposes accrued but unpaid contributions) allocable
to such benefits by more than $15,000,000. The liability to which the Company
or any Commonly Controlled Entity would become subject under ERISA if the
Company or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
hereof would not have a Material Adverse Effect. No Multiemployer Plan is either
in Reorganization or Insolvent in any case the consequences of which would have
a Material Adverse Effect.
SECTION 6. CONDITIONS PRECEDENT
6.1 CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT, INITIAL LOANS AND
LETTERS OF CREDIT. The effectiveness of this Agreement, the obligation of each
Lender to make its Loans and the obligation of the Issuing Lender to issue any
Letter of Credit on the Closing Date are subject to the satisfaction, or waiver
by the Lenders (or, in the case of conditions specified 6.1(g), (i) or (p), by
the Administrative Agent) immediately prior to or concurrently with the
effectiveness of this Agreement, the making of such Loans or the issuance of
such Letter of Credit, as the case may be, of the following conditions
precedent:
43
(a) CREDIT AGREEMENT. The Administrative Agent shall have received
this Agreement, executed and delivered by a duly authorized officer of
the Company with a counterpart for each Lender.
(b) PLEDGE AGREEMENTS. The Administrative Agent shall have received
the Holdings Pledge Agreement and the Company Pledge Agreement each
executed and delivered by a duly authorized officer of the Credit Party
party thereto, together with (i) (A) the Holdings Note, (B) the
Subsidiary Note and (C) all stock certificates representing all of the
Pledged Stock (as defined in such Pledge Agreement) and (ii) undated
stock powers for each certificate representing such Pledged Stock,
and undated endorsements to the Holdings Note and the Subsidiary Note,
each duly executed in blank and delivered by a duly authorized officer
of such Credit Party, and in each case accompanied by the acknowledgement
and consent of each issuer of such Pledged Stock or such note thereunder,
as the case may be, in the form annexed to each such Pledge Agreement.
(c) GUARANTEES. The Administrative Agent shall have received (i) the
Holdings Guarantee, executed and delivered by a duly authorized officer of
Holdings, and (ii) the Subsidiary Guarantee, executed and delivered by a
duly authorized officer of each Subsidiary Guarantor.
(d) CONSUMMATION OF THE IPO. The Administrative Agent shall have
received evidence satisfactory to it that the IPO shall have been
consummated with gross cash proceeds (net of underwriting discount) thereof
of not less than $75,000,000, and that any such proceeds not applied as
described in 6.1(e) or to any fees and expenses associated with the
Refinancing and the IPO, shall have been contributed to the Company.
(e) REPURCHASE OR REPAYMENT OF EXISTING HOLDINGS PREFERRED. The
Administrative Agent shall have received evidence satisfactory to it that
Holdings shall have effected the repurchase or repayment of all of the
existing Holdings Preferred in accordance with the terms thereof and shall
have paid all fees and expenses associated therewith and with the
transactions contemplated thereby.
(f) TERMINATION OF EXISTING CREDIT AGREEMENTS. The Administrative
Agent shall have received evidence satisfactory to it that all principal,
interest, fees, and other amounts owing or payable under the Existing
Credit Agreement shall have been paid in full, the Existing Credit
Agreements shall have been terminated and all Liens thereunder shall have
been terminated and released.
(g) LEGAL OPINIONS. The Administrative Agent shall have received
such legal opinions covering the transactions contemplated by this
Agreement as the Administrative Agent shall reasonably request, dated the
Closing Date and addressed to the Administrative Agent and the Lenders,
including, (i) an opinion of ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel to Holdings and the Company, substantially in the form of Exhibit
J-1 hereto with such changes
44
thereto as may be approved by and otherwise in form and substance
satisfactory to the Administrative Agent and its counsel and (ii) an
opinion of General Counsel to the Company, substantially in the form of
Exhibit J-2 hereto with such changes thereto as may be approved by and
otherwise in form and substance satisfactory to the Administrative Agent
and its counsel. Such opinions shall also cover such other matters
incident to the transactions contemplated by this Agreement as the
Administrative Agent shall reasonably require.
(h) INSURANCE. The Administrative Agent shall have received (i) a
schedule describing all insurance maintained by the Company and its
Subsidiaries pursuant to subsection 7.5(b), which schedule shall set forth
for each insurance policy the scope of coverage, the policy limits and
deductibles, the insurer and the expiration date, (ii) binders (or other
customary evidence as to the obtaining and maintenance by the Company of
such insurance) for each policy set forth on such schedule insuring against
aviation and products liability risk and (iii) a written summary, in form
and substance satisfactory to the Administrative Agent, of all insurance
policies insuring against products liability risk which have been
maintained from time to time by the Company and its Subsidiaries during the
five years immediately preceding the Closing Date.
(i) SOLVENCY OPINION. The Administrative Agent shall have received
an opinion from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Incorporated or, any other firm
acceptable to the Administrative Agent and the Company documenting the
solvency of Holdings and its Subsidiaries after giving effect to the
Refinancing, the IPO and the transactions related thereto.
(j) CLOSING CERTIFICATES. The Administrative Agent shall have
received a Closing Certificate of Holdings, the Company and each Subsidiary
Guarantor, dated the Closing Date, substantially in the form of Exhibits
K-1, K-2 and K-3 hereto, respectively, with appropriate insertions and
attachments, satisfactory in form and substance to the Administrative Agent
and its counsel, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of Holdings, the Company and each
Subsidiary Guarantor, respectively.
(k) FINANCIAL INFORMATION. The Administrative Agent shall have
received a copy of (i) the financial statements referred to in subsection
5.6(b) and such financial statements for the year ended December 31, 1994
(ii) the financial statements referred to in subsection 5.6(a) and such
financial statements for each prior fiscal quarter of Holdings ended during
1996 and (iii) a pro forma balance sheet of the Company as at June 30,
1996, adjusted to give effect to the Refinancing, the Loans to be made on
the Closing Date and the use of proceeds thereof, in each case with a
photocopy thereof for each Lender.
(l) NO LEGAL CONSTRAINTS. Except as disclosed in the Registration
Statement, no litigation, inquiry, injunction or restraining order shall be
pending, entered or threatened (including any proposed statute, rule or
45
regulation) which is reasonably likely to have a Material Adverse Effect or
a material adverse effect on (i) the transactions described in subsections
6.1(d), (e) and (f) and the transactions related thereto, (ii) the ability
of the Credit Parties to perform their obligations under the Credit
Documents or (iii) the rights and remedies of the Administrative Agent and
the Lenders under the Credit Documents.
(m) ABSENCE OF OTHER DEVELOPMENTS. Except as disclosed in the
Registration Statement, there shall not have occurred any change, or
development or event involving a prospective change, which in either case
is reasonably likely to have a Material Adverse Effect or a material
adverse effect on the rights and remedies of the Administrative Agent and
the Lenders under the Credit Documents.
(n) EVENTS OF DEFAULT UNDER OTHER AGREEMENTS. No default or event of
default shall have occurred and be continuing under any capital stock or
material Indebtedness of Holdings, the Company or their Subsidiaries, or
would occur after giving effect to the transactions described in
subsections 6.1(d), (e) and (f) or otherwise contemplated hereby, except
any such defaults or events of default which (i) have previously been
waived or the obligation with respect to which such default or breach has
occurred has been or will be refinanced and extinguished on or prior to the
Closing Date or (ii) would otherwise not have a Material Adverse Effect.
(o) FEES. The Administrative Agent shall have received for the
account of the Lenders, or for its own account, as the case may be, all
fees and expenses payable to the Lenders and the Administrative Agent on or
prior to the Closing Date.
(p) RELATED AGREEMENTS. The Administrative Agent shall have received
each additional document, instrument or piece of information reasonably
requested by the Lenders, including, without limitation, a copy of any debt
instrument, security agreement or other material contract to which any
Credit Party or any of their Subsidiaries is a party.
(q) ADDITIONAL MATTERS. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Administrative Agent and its
counsel.
6.2 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT. The obligation of
each Lender to make any Loan (other than any Revolving Credit Loan the proceeds
of which are to be used to repay Refunded Swing Line Loans) and the obligation
of the Issuing Lender to issue any Letter of Credit is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) REPRESENTATIONS AND WARRANTIES. If such Loan is made (and/or
Letter of Credit issued) on the Closing Date, each of the representations
and
46
warranties made in or pursuant to Section 5, or which are contained in any
other Credit Document or in any certificate, document or financial or other
statement furnished by or on behalf of Holdings, the Company or any
Subsidiary thereof, at any time under or in connection herewith, shall be
true and correct in all material respects on and as of the Closing Date as
if made on and as of the Closing Date (unless stated to relate to a
specific earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier
date). If such Loan is made (and/or Letter of Credit issued) subsequent to
the Closing Date, each of the representations and warranties made in or
pursuant to Section 5 or which are contained in any other Credit Document
or in any certificate, document or financial or other statement furnished
by or on behalf of Holdings, the Company or any Subsidiary thereof shall be
true and correct in all material respects on and as of the date of such
Loan (or Letter of Credit) as if made on and as of such date (unless stated
to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of
such earlier date).
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect
to the Loan to be made or the Letter of Credit to be issued on such
Borrowing Date.
Each borrowing by the Company hereunder and the issuance of each
Letter of Credit by the Issuing Lender hereunder shall constitute a
representation and warranty by the Company as of the date of such borrowing or
issuance that the conditions in clauses (a) and (b) of this subsection 6.2 have
been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in
effect, any Loan, Note or Revolving L/C Obligation remains outstanding and
unpaid, any amount remains available to be drawn under any Letter of Credit or
any other amount is owing to any Lender or the Administrative Agent hereunder,
it shall, and, in the case of the agreements contained in subsections 7.3, 7.4,
7.5, 7.6 and 7.8 cause each of its Subsidiaries to:
7.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent (with
sufficient copies for each Lender):
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of Holdings, a copy of the consolidated balance
sheet of Holdings and its consolidated Subsidiaries as at the end of such
year and the related consolidated statements of operations, stockholders'
equity and cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by Deloitte & Touche LLP or other
independent
47
certified public accountants of nationally recognized standing not
unacceptable to the Required Lenders (the "ACCOUNTANTS"); PROVIDED that if
for any reason whatsoever the consolidated balance sheet of Holdings and
its consolidated Subsidiaries and the related consolidated statements of
operations, stockholders' equity and cash flows for any fiscal year would
be materially different from the consolidated balance sheet of the Company
and its consolidated Subsidiaries and the related consolidated statements
of operations, stockholders' equity and cash flows for such fiscal year,
then the Company shall also provide, as soon as available, but in any event
within 90 days after the end of each fiscal year of the Company, a copy of
the consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of operations, stockholders' equity and of cash flows for such
year, setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like qualification
or exception, or qualification arising out of the scope of the audit, by
the Accountants;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of Holdings, the unaudited consolidated balance sheet of Holdings and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of operations, stockholders' equity and
cash flows of Holdings and its consolidated Subsidiaries for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments); PROVIDED that if
for any reason whatsoever the unaudited consolidated balance sheet of
Holdings and its consolidated Subsidiaries and the related unaudited
consolidated statements of operations, stockholders' equity and cash flows
for such quarter would be materially different from the unaudited
consolidated balance sheet of the Company and its consolidated Subsidiaries
and the related unaudited consolidated statements of operations,
stockholders' equity and cash flows for such quarter, then the Company
shall also provide, as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of each
fiscal year of the Company, the unaudited consolidated balance sheet of the
Company and its consolidated Subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of operations, stockholders'
equity and cash flows of the Company and its consolidated Subsidiaries for
such quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit adjustments);
(c) as soon as available, but in any event within 60 days after the
beginning of each fiscal year of Holdings to which such budget relates, an
annual operating budget, on a consolidated basis, for Holdings and its
Subsidiaries, as adopted by the Board of Directors of the Company;
all financial statements shall be prepared in reasonable detail (except that
interim statements may be condensed and may exclude detailed footnote disclosure
to the extent consistent with
48
the rules and regulations of the Securities and Exchange Commission relating to
the presentation of financial information in Quarterly Reports on Form 10-Q) in
all material respects (subject, in the case of interim statements, to normal
year-end audit adjustments) and in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods (except as
concurred in by the Accountants or officer, as the case may be, and disclosed
therein and except that interim financial statements need not be restated for
changes in accounting principles which require retroactive application, and
operations which have been discontinued (as defined in Accounting Principles
Board Opinion No. 30) during the current year need not be shown in interim
financial statements as such either for the current period or comparable prior
period). In the event Holdings changes its accounting methods because of
changes in GAAP, or any change in GAAP occurs which increases or diminishes the
protection and coverage afforded to the Lenders under current GAAP accounting
methods, the Company or the Administrative Agent, as the case may be, may
request of the other parties to this Agreement an amendment of the financial
covenants contained in this Agreement to reflect such changes in GAAP and to
provide the Lenders with protection and coverage equivalent to that existing
prior to such changes in accounting methods or GAAP, and each of the Company,
the Administrative Agent and the Lenders agree to consider such request in good
faith.
7.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent (with sufficient copies for each Lender):
(a) concurrently with the delivery of the consolidated financial
statements referred to in subsection 7.1(a), a letter from the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary to express their opinion on such
financial statements no knowledge was obtained of any Default or Event of
Default, except as specified in such letter;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a certificate of the chief
financial officer of the Company (i) stating that, to the best of such
officer's knowledge, each of Holdings, the Company and their respective
Subsidiaries has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement, the
Notes and the other Credit Documents to be observed, performed or satisfied
by it, and that such officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate, (ii) showing in
detail as of the end of the related fiscal period the figures and
calculations supporting such statement in respect of subsections 8.1(d) and
(e)(ii), 8.3(c), 8.5(e), 8.7, 8.8, 8.9, 8.10 and 8.13, and (iii) showing in
detail as of the end of the related fiscal period the Interest Coverage
Ratio and the Leverage Ratio of Holdings and its Subsidiaries and the
calculations supporting such statement and stating the Applicable Margin
and commitment fee payable as a result of such ratios;
(c) promptly upon receipt thereof, copies of all final reports
submitted to Holdings and the Company by independent certified public
accountants in connection with each annual, interim or special audit of the
books of Holdings and the Company
49
made by such accountants, including, without limitation, any final report
pertaining to the company's internal control systems submitted by such
accountants to management in connection with their annual audit;
(d) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available
generally by Holdings, the Company or any of their respective Subsidiaries
and all regular and periodic reports and all final registration statements
and final prospectuses, if any, filed by Holdings, the Company or any of
their respective Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any Governmental Authority succeeding
to any of its functions;
(e) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a management summary describing
and analyzing the performance of Holdings, the Company and their respective
Subsidiaries during the periods covered by such financial statements; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
7.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all of
its obligations and liabilities of whatever nature (including, without
limitation, taxes), except (a) when the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books of the
Company or any of its Subsidiaries, as the case may be, (b) for delinquent
obligations which do not have a Material Adverse Effect and (c) for trade and
other accounts payable in the ordinary course of business in accordance with
customary trade terms and which are not overdue for a period of more than 90
days (or any longer period if longer payment terms are accepted in the ordinary
course of business) or, if overdue for more than 90 days (or such longer
period), as to which a dispute exists and adequate reserves in conformity with
GAAP have been established on the books of the Company and its Subsidiaries, as
the case may be.
7.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to
engage in business of the same general type as now conducted by it, and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except for rights,
privileges and franchises the loss of which would not in the aggregate have a
Material Adverse Effect, and except as otherwise permitted by subsections 8.4
and 8.5; and comply with all applicable Requirements of Law except to the extent
that the failure to comply therewith would not, in the aggregate, have a
Material Adverse Effect.
7.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all property
useful and necessary in its business in good working order and condition
(ordinary wear and tear excepted); and
50
(b) Maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and with only such
deductibles as are usually maintained by, and against at least such risks (but
including, in any event, public liability and product liability insurance) as
are usually insured against in the same general area, by companies engaged in
the same or a similar business; and furnish to each Lender, (i) annually, a
schedule disclosing (in a manner substantially similar to that used in the
schedule provided pursuant to subsection 6.1(h)) all insurance against aviation
and products liability risk maintained by the Company and its Subsidiaries
pursuant to this subsection 7.5(b) or otherwise and (ii) upon written request of
any Lender, full information as to the insurance carried; PROVIDED that the
Company may implement programs of self insurance in the ordinary course of
business and in accordance with industry standards for a company of similar size
so long as reserves are maintained in accordance with GAAP for the liabilities
associated therewith.
7.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities
which permit financial statements to be prepared in conformity with GAAP and all
Requirements of Law; and permit representatives of any Lender upon reasonable
notice to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired upon reasonable notice during normal business hours, and
to discuss the business, operations, properties and financial and other
condition of the Company and its Subsidiaries with officers and employees
thereof and with their independent certified public accountants.
7.7 NOTICES. Promptly give notice to the Administrative Agent and
each Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any instrument or
other agreement, guarantee or collateral document of the Company or any of
its Subsidiaries which default or event of default has not been waived and
would have a Material Adverse Effect, or any other default or event of
default under any such instrument, agreement, guarantee or other collateral
document which, but for the proviso to clause (e) of Section 9, would have
constituted a Default or Event of Default under this Agreement, or (ii)
litigation, investigation or proceeding which may exist at any time between
Holdings, the Company or any of their respective Subsidiaries and any
Governmental Authority, or receipt of any notice of any environmental claim
or assessment against Holdings, the Company or any of their respective
Subsidiaries by any Governmental Authority, which in any such case would
have a Material Adverse Effect;
(c) of any litigation or proceeding affecting the Company or any of
its Subsidiaries (i) in which more than $5,000,000 of the amount claimed is
not covered by insurance or (ii) in which injunctive or similar relief is
sought which if obtained would have a Material Adverse Effect;
51
(d) of the following events, as soon as practicable after, and in any
event within 30 days after, the Company knows thereof: (i) the occurrence
of any Reportable Event with respect to any Single Employer Plan which
Reportable Event could have a Material Adverse Effect, or (ii) the
institution of proceedings or the taking of any other action by PBGC, the
Company or any Commonly Controlled Entity to terminate, withdraw from or
partially withdraw from any Plan and, with respect to a Multiemployer Plan,
the Reorganization or Insolvency of such Plan, in each of the foregoing
cases which could have a Material Adverse Effect, and in addition to such
notice, deliver to the Administrative Agent and each Lender whichever of
the following may be applicable: (A) a certificate of the chief financial
officer of the Company setting forth details as to such Reportable Event
and the action that the Company or such Commonly Controlled Entity proposes
to take with respect thereto, together with a copy of any notice of such
Reportable Event that may be required to be filed with PBGC, or (B) any
notice delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be terminated, as
the case may be;
(e) of a material adverse change known to the Company or any of its
Subsidiaries in the business, financial condition, assets or results of
operations of the Company and its Subsidiaries taken as a whole.
Each notice pursuant to this subsection 7.7 be accompanied by a statement of the
chief executive officer or the chief financial officer of the Company setting
forth details of the occurrence referred to therein and stating what action the
Company proposes to take with respect thereto.
7.8 ADDITIONAL SUBSIDIARY GUARANTORS; STOCK PLEDGE. (a) If, at any
time that the Leverage Ratio then in effect is not less than or equal to
1.5:1.0, any Subsidiary of the Company or Holdings (whether presently existing
or hereafter created or acquired) shall become a Material Subsidiary, the
Company or Holdings shall cause to be pledged 100% of the issued and
outstanding stock of such Material Subsidiary owned by it pursuant to a
Pledge Agreement substantially in the form of Exhibit D or H, as
appropriate, each of which Pledge Agreements shall be accompanied by
such resolutions, incumbency certificates and legal opinions as are
reasonably requested by the Administrative Agent and its counsel; PROVIDED
that if (x) (i) such Material Subsidiary is a Domestic Subsidiary of the Company
or Holdings more than 65% of the assets of which are securities of foreign
Persons (such determination to be made on the basis of fair market value) or
(ii) such Material Subsidiary is a Foreign Subsidiary of the Company or
Holdings, only 65% of the stock of such Material Subsidiary shall be required to
be pledged pursuant to this subsection 7.8(a), or (y) such Material Subsidiary
is a Foreign Subsidiary of the Company or Holdings which is owned by a Foreign
Subsidiary of the Company or Holdings, none of the stock of such Material
Subsidiary shall be required to be pledged pursuant to this Section 7.8(a).
(b) If any Subsidiary of the Company or Holdings (whether presently
existing or hereafter created or acquired) shall become a Material Subsidiary,
the Company or
52
Holdings shall cause such Material Subsidiary to promptly thereafter execute and
deliver a Guarantee in favor of the Administrative Agent in substantially the
form of Exhibit G, each of which Guarantees shall be accompanied by such
resolutions, incumbency certificates and legal opinions as are reasonably
requested by the Administrative Agent and its counsel; PROVIDED that no
Guarantee shall be required to be delivered under this paragraph (b) by a
Foreign Subsidiary of the Company or Holdings or by a Material Subsidiary if
more than 65% of the assets of such Material Subsidiary are securities of
foreign Persons (such determination to be made on the basis of fair market
value).
(c) In the event that there shall be a Change in Law which eliminates
the adverse tax consequences to the Company, Holdings or any of their
Subsidiaries which would have resulted on the date hereof from (A) the pledge of
more than 65% of stock of any Foreign Subsidiary which is a Material Subsidiary
or any Domestic Subsidiary which is a Material Subsidiary more than 65% of the
assets of which are securities of foreign Persons (such determination to be made
on the basis of fair market value) or (B) the guarantee by a Foreign Subsidiary
which is a Material Subsidiary or such a Domestic Subsidiary which is a Material
Subsidiary of the Loans and the other obligations of the Company hereunder, the
Company shall promptly thereafter (i) if at such time the Leverage Ratio then in
effect is not less than or equal to 1.5:1.0, pledge and deliver, or shall cause
to be pledged and delivered, to the Administrative Agent such additional stock
as can be so pledged without any adverse tax consequences and (ii) cause any
such Foreign Subsidiary or Domestic Subsidiary which is a Material Subsidiary
and has not previously executed and delivered a Guarantee because of such
adverse tax consequences to deliver a Guarantee to the Administrative Agent to
the extent any such guarantee can be so executed and delivered without any
adverse tax consequences.
(d) In the event that at any time after the date hereof any
Subsidiary, the stock of which is then pledged to the Administrative Agent for
the benefit of the Lenders hereunder, shall undertake a recapitalization
involving the incurrence of debt or the issuance of equity, such debt or equity
shall be evidenced by securities and the Company shall promptly pledge, or cause
to be pledged, such securities to the Administrative Agent, for the ratable
benefit of the Lenders, upon terms and subject to conditions reasonably
satisfactory to the Administrative Agent and, until the Administrative Agent
possesses a perfected security interest in such securities, the Company shall
hold such securities in trust for the Administrative Agent; PROVIDED, HOWEVER,
that, except as set forth in clause (c) above, if, (x) (i) such Subsidiary is a
Domestic Subsidiary more than 65% of the assets of which are securities of
foreign companies (such determination to be made on the basis of fair market
value) or (ii) such Subsidiary is a Foreign Subsidiary, or (y) such Subsidiary
is a Foreign Subsidiary of the Company or Holdings that is owned by a Foreign
Subsidiary of the Company or Holdings the Company shall be required to pledge
only such portion of such securities so that, after giving effect thereto, only
65% of the stock of such Subsidiary in the case of clause (x) or no stock of a
Subsidiary in the case of clause (y) is pledged to the Administrative Agent, for
the ratable benefit of the Lenders, under the relevant Pledge Agreement. The
Administrative Agent and the Lenders agree that, simultaneously with any such
recapitalization, the Administrative Agent shall release securities of any
Subsidiary then held by it and exchange such securities for those issued in
connection with such recapitalization.
53
SECTION 8. NEGATIVE COVENANTS
The Company hereby agrees that it shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly so long as the Commitments remain
in effect or any Loan, Note or Revolving L/C Obligation remains outstanding and
unpaid, any amount remains available to be drawn under any Letter of Credit or
any other amount is owing to any Lender or the Administrative Agent hereunder:
8.1 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness of the Company hereunder and in connection with the
Letters of Credit and this Agreement;
(b) Indebtedness outstanding on the date hereof and listed on
Schedule 8.1;
(c) Indebtedness in respect of Used Aircraft Inventory Financing in
an aggregate amount outstanding at any time, when added (without
duplication) to the aggregate amount of Contingent Obligations permitted
under subsection 8.3(c) outstanding at such time, not to exceed
$60,000,000;
(d) Indebtedness of the Company and its Subsidiaries incurred for
industrial revenue bonds, for capitalized lease obligations and for the
deferred purchase price of newly acquired property of the Company and its
Subsidiaries, in an amount (based on the remaining balance of the
obligations therefor on the books of the Company and its Subsidiaries)
which shall not exceed in the aggregate at any one time outstanding
$40,000,000;
(e) (i) Indebtedness of the Company to any Subsidiary Guarantor and
of any Subsidiary Guarantor to the Company or any other Subsidiary
Guarantor and (ii) additional Indebtedness of the Company or any Subsidiary
Guarantor to any Subsidiary that is not a Subsidiary Guarantor and of any
Subsidiary that is not a Subsidiary Guarantor to the Company or any
Subsidiary Guarantor, in an aggregate amount for this clause (ii) not to
exceed an aggregate principal amount of $10,000,000 outstanding at any
time;
(f) Indebtedness to the extent arising from or constituted by foreign
currency exchange contracts permitted by subsection 8.13;
(g) Indebtedness in the nature of unsecured standby letters of credit
(other than the Standby L/Cs) issued for the account of the Company or any
Domestic Subsidiary not to exceed an aggregate face amount of $50,000,000
at any one time outstanding; and
54
(h) other Indebtedness of the Company or any of its Subsidiaries
incurred in the ordinary course of their respective businesses in an
aggregate principal amount not to exceed $3,000,000 outstanding at any
time.
8.2 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets, income or profits, whether now owned
or hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges not
yet due or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Company or such Subsidiary, as the case may be, in accordance
with GAAP;
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
in respect of obligations which are not yet due or which are being
contested in good faith and by appropriate proceedings if adequate reserves
with respect thereto are maintained on the books of the Company or such
Subsidiary, as the case may be, in accordance with GAAP;
(c) Liens in existence on the date hereof listed on Schedule 8.2,
PROVIDED that no such Lien is spread to cover any additional property after
the Closing Date and that the amount of Indebtedness secured thereby shall
not subsequently be increased;
(d) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(e) Liens or deposits to secure the performance of bids, tenders,
trade or government contracts (other than for borrowed money), leases,
licenses, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;
(f) easements, right-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred, or leases or
subleases granted to others, in the ordinary course of business, which do
not interfere with or adversely affect in any material respect the ordinary
conduct of the business of the Company and its Subsidiaries taken as a
whole;
(g) Liens in favor of the Lenders pursuant to the Credit Documents
and bankers' liens arising by operation of law;
(h) Liens on assets of corporations which become Subsidiaries of the
Company after the date hereof, PROVIDED that such Liens exist at the time
such corporations become Subsidiaries and are not created in anticipation
thereof;
(i) Liens on documents of title and the property covered thereby
securing Indebtedness in respect of the Letters of Credit which are
Commercial L/Cs;
55
(j) Liens on property of the Financing Subsidiary created solely for
the purpose of securing Indebtedness permitted by subsection 8.1(c);
(k) Liens created solely for the purpose of securing Indebtedness
permitted by subsection 8.1(d), representing or incurred to finance,
refinance or refund the purchase price of property, PROVIDED that no such
Lien shall extend to or cover other property of the Company or such
Subsidiary other than the respective property so acquired, and the
principal amount of Indebtedness secured by any such Lien shall at no time
exceed the original purchase price of such property;
(l) Liens securing any Indebtedness permitted under subsection
8.1(f), provided that no such Lien shall encumber any Collateral (as
defined in any Pledge Agreement) under any of the Pledge Agreements;
(m) Liens securing any Indebtedness permitted under subsection
8.1(h), PROVIDED that no such Lien shall encumber any Collateral (as
defined in any Pledge Agreement) under any of the Pledge Agreements;
(n) additional Liens, PROVIDED that (i) the maximum aggregate amount
of obligations secured thereby does not exceed $5,000,000 in the aggregate
at any time, and (ii) no such Lien shall encumber any Collateral
(as defined in any Pledge Agreement) under any of the Pledge Agreements.
8.3 LIMITATION ON CONTINGENT OBLIGATIONS. Create, incur, assume or
suffer to exist any Contingent Obligation except:
(a) Contingent Obligations in existence on the date hereof and listed
on Schedule 8.3;
(b) guarantees made in the ordinary course of business of the Company
and its Subsidiaries in connection with employee relocation, travel and
entertainment for an aggregate amount not to exceed $1,000,000 at any one
time outstanding;
(c) Contingent Obligations in respect of Indebtedness permitted under
subsection 8.1(c) in a maximum aggregate amount outstanding at any time,
when added (without duplication) to the aggregate amount of Indebtedness
permitted under subsection 8.1(c) outstanding at such time, not to exceed
$60,000,000.
(d) Contingent Obligations to the extent arising from or constituted
by foreign currency exchange contracts permitted by subsection 8.13;
(e) Contingent Obligations pursuant to the Subsidiary Guarantees; and
(f) (i) guarantees by the Company or any Subsidiary Guarantor of
Indebtedness permitted under subsection 8.1 or other obligations permitted
hereunder of the Company or any Subsidiary Guarantor and (ii) guarantees by
the Company or any Subsidiary Guarantor of Indebtedness permitted under
56
subsection 8.1 or other obligations permitted hereunder of any Subsidiary
that is not a Subsidiary Guarantor permitted under subsection 8.1(e)
subject to the limitations set forth in subsection 8.6(g).
8.4 PROHIBITION OF FUNDAMENTAL CHANGES. Enter into any transaction
of acquisition of, or merger or consolidation or amalgamation with, any other
Person (including any Subsidiary or Affiliate of the Company or any of its
Subsidiaries), or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or make any material change in the present method
of conducting business or engage in any type of business other than of the same
general type now conducted by it, except for the transactions otherwise
permitted pursuant to subsections 8.5 and 8.6.
8.5 PROHIBITION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, tax benefits, receivables and leasehold
interests), whether now owned or hereafter acquired except:
(a) the sale or other disposition of any tangible personal property
that, in the reasonable judgment of the Company, has become uneconomic,
obsolete or worn out, and which is disposed of in the ordinary course of
business;
(b) sales or other dispositions of inventory in each case made in the
ordinary course of business (including all or any portion of the used
aircraft inventory of the Company and its Subsidiaries, other than in
connection with the Used Aircraft Inventory Financing);
(c) the sale, lease, transfer or other disposition of any or all of
its assets (upon voluntary liquidation or otherwise) to the Company or a
wholly-owned Subsidiary and any Subsidiary of the Company may sell or
otherwise dispose of, or part with control of any or all of, the stock of
any Subsidiary to a wholly-owned Subsidiary, PROVIDED that to the extent
that any such transaction would result in the transfer of any assets of, or
any stock of, a Subsidiary that is not a Subsidiary Guarantor, such
transfer shall be limited as set forth in subsection 8.6(g);
(d) asset sales in connection with the Used Aircraft Inventory
Financing; and
(e) for the sale or other disposition by the Company or any of its
Subsidiaries of other assets, PROVIDED that (i) such sale
or other disposition shall be made for fair value on an arm's-length basis,
(ii) the aggregate fair market value of all such assets sold or disposed of
under this clause after the Closing Date shall not exceed $10,000,000 in
any fiscal year and $20,000,000 in the aggregate, (iii) the Net Proceeds
from such sale or other disposition shall be applied in accordance with the
provisions of subsection 4.6, and (iv) non-cash consideration therefor
shall constitute investments permitted under subsection 8.6(f).
57
8.6 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance,
loan, extension of credit or capital contribution to, or Contingent Obligation
for the benefit of, or purchase, stock, bonds, notes, debentures or other
securities of or any interest in, or make any other investment in, or acquire
assets other than in the ordinary course of business from, any Person, except:
(a) the Company may make loans or advances to, or investments in, any
Subsidiary Guarantor, and any Subsidiary Guarantor may make loans or
advances to, or investments in, the Company or any other Subsidiary
Guarantor, to the extent the Indebtedness created thereby is permitted by
subsection 8.1(e)(i);
(b) the Company and its Subsidiaries may invest in, acquire and hold
Cash Equivalents;
(c) the Company or any of its Subsidiaries may make travel and
entertainment advances and relocation loans in the ordinary course of
business to officers and employees of the Company or any such Subsidiary,
PROVIDED that the aggregate principal amount of all such loans and advances
outstanding at any one time, together with the guarantees of such Loans and
advances made pursuant to subsection 8.3(b), shall not exceed $1,000,000;
(d) the Company or any of its Subsidiaries may make payroll advances
in the ordinary course of business;
(e) the Company or any of its Subsidiaries may acquire and hold
receivables and promissory notes owing to it, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms (PROVIDED that nothing in this subsection 8.6
shall prevent the Company or any Subsidiary from offering such
concessionary trade terms, or from receiving such investments in connection
with the bankruptcy or reorganization of their respective suppliers or
customers or the settlement of disputes with such customers or suppliers
arising in the ordinary course of business, as management deems reasonable
in the circumstances);
(f) the Company and its Subsidiaries may make investments
constituting non-cash consideration in connection with Asset Sales
permitted by subsection 8.5; PROVIDED that (i) the amount of any such
investment shall not exceed 10% of the aggregate consideration to be
received by the Company and its Subsidiaries in respect of such Asset Sale
and (ii) to the extent that the amount of any such investment exceeds
$20,000,000, the Company shall use its best efforts to (x) cause each such
investment to be made in such a form and on such terms so that such
investment can be pledged to the Administrative Agent, for the benefit of
the Lenders, and (y) pledge such investment to the Administrative Agent,
for the benefit of the Lenders, on terms reasonably satisfactory to the
Administrative Agent;
(g) the Company and its Subsidiaries may make loans or advances to,
incur Contingent Obligations for the benefit of, make acquisitions from
or of, and make investments
58
in, other Persons, including, without limitation, Indebtedness described in
subsection 8.1(e)(ii) and Contingent Obligations described in subsections
8.1(f); PROVIDED that the aggregate amount of the consideration paid or
invested and the amounts loaned, advanced or guaranteed by the Company
and its Subsidiaries in all such transactions after the Closing Date
(net, in the case of loans, advances or investments, of any repayments
or return of capital in respect thereof actually received in cash by the
Company or such Subsidiary (net of applicable taxes) after the Closing
Date), when added to the amount of any transfers or dispositions of
assets described in the proviso to subsection 8.5(c), does not exceed
an aggregate amount of $10,000,000 in any single transaction or series of
related transactions or $20,000,000 in any fiscal year of the Company; and
(h) the Company may make a loan to Holdings on the Closing Date in
connection with the Refinancing, evidenced by the Holdings Note and in an
aggregate principal amount not to exceed $100,000,000.
8.7 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make
Capital Expenditures, other than Capital Expenditures in any fiscal year of the
Company in the aggregate for the Company and its Subsidiaries not exceeding
$40,000,000 (the "BASE AMOUNT"); PROVIDED, HOWEVER, that the Base Amount for any
fiscal year may be increased by a maximum of $5,000,000 by carrying over to such
fiscal year any portion of the Base Amount not spent in the immediately
preceding fiscal year (but not in any year prior thereto).
8.8 MAINTENANCE OF INTEREST COVERAGE. Permit for any period of four
consecutive fiscal quarters ending during any period set forth below the
Interest Coverage Ratio for such period to be less than the ratio set forth
opposite such period below:
Period Ratio
------ -----
Closing Date 1.75:1.0
through
September 30, 1997
October 1, 1997 2.00:1.0
through
December 31, 1997
January 1, 1998 3.00:1.0
through
December 31, 1998
January 1, 1999 4.00:1.0
and at all
times thereafter
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8.9 MAINTENANCE OF CURRENT RATIO. Permit the ratio of Consolidated
Current Assets to Consolidated Current Liabilities at any time to be less than
1.00 to 1.00.
8.10 MAINTENANCE OF LEVERAGE RATIO. Permit, as at the end of any
fiscal quarter of Holdings ending during any period set forth below, the
Leverage Ratio to be more than the ratio set forth opposite such period below:
Period Ratio
------ -----
Closing Date 5.0:1.0
through
June 30, 1997
July 1, 1997 4.0:1.0
through
September 30, 1997
October 1, 1997 3.5:1.0
through
December 31, 1997
January 1, 1998 3.0:1.0
through
December 31, 1998
January 1, 1999 2.5:1.0
and at all
times thereafter
8.11 LIMITATION ON RESTRICTED PAYMENTS. Except as contemplated in
connection with the Refinancing and paid on the Closing Date, declare any
dividends on any shares of any class of stock, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, retirement or other acquisition of any shares of any class of stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Company or any of its Subsidiaries, except that;
(a) Subsidiaries may pay dividends to the Company or to Domestic
Subsidiaries which are directly or indirectly wholly-owned by the Company;
(b) the Company may pay dividends to Holdings in an amount equal to
the amount required for Holdings to pay franchise taxes, fees and expenses
necessary to maintain its status as a public corporation and other fees
required to maintain its corporate existence (including fees and expenses
in connection with filings to be made by Holdings under federal and state
securities laws);
60
(c) the Company may pay cash dividends to Holdings to the extent
necessary to enable Holdings to pay fees, expenses and other obligations
incurred or required in connection with the Refinancing, PROVIDED that
Holdings shall pay each obligation in respect of which such dividend is
made no later than fifteen Business Days after the date on which the
relevant dividend is made and, PROVIDED FURTHER, that the Company may pay a
non-cash dividend to eliminate the intercompany account between Holdings
and the Company in an amount not to exceed $2,000,000;
(d) the Company (i) may pay dividends to Holdings from time to time in
amounts equal to the amounts then required for Holdings to pay interest
when due on the Holdings Note, PROVIDED that within two days' after receipt
by Holdings of any such amount, Holdings applies such amount as payment to
the Company of such interest on the Holdings Note and (ii) may reduce or
eliminate the Holdings Note if such reduction or elimination is duly
declared and made by the Company as a non-cash dividend;
(e) so long as no Default or Event of Default has occurred or would
occur after giving effect to such declaration or payment, the Company may,
from time to time, declare and pay cash dividends to Holdings on the common
stock of the Company in an aggregate amount not to exceed $3,000,000 (the
"HOLDINGS DIVIDEND LIMIT"), PROVIDED that the proceeds of such dividends
shall be used within 30 days of the receipt of such dividends by Holdings
to repurchase Holdings stock from management employees of Holdings or any
of its Subsidiaries or to make payments in respect of outstanding stock
appreciation rights granted to management employees of Holdings or any of
its Subsidiaries and, PROVIDED FURTHER, the Holdings Dividend Limit shall
be increased by the proceeds of any additional Holdings stock which is
issued to any management employees of Holdings or any of its Subsidiaries
after the Closing Date so long as such proceeds are contributed by Holdings
to the capital of the Company; and
(f) so long as no Default or Event of Default has occurred or would
occur after giving effect to such declaration or payment, the Company may,
at any time that (i) the Leverage Ratio in effect is equal to or less than
1.5:1.0 or (ii) the aggregate principal amount of Term Loans then
outstanding is less than $200,000,000, declare and pay cash dividends to
Holdings on the common stock of the Company, PROVIDED that the aggregate
amount thereof paid in any fiscal year of the Company does not exceed an
amount equal to 25% of Consolidated Net Income for such fiscal year.
8.12 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate except (a) for transactions
which are otherwise permitted under this Agreement and which are in the ordinary
course of the Company's or a Subsidiary's business and which are upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
would obtain in a hypothetical comparable arm's length transaction with a Person
not an Affiliate, (b) as permitted under subsections 8.1(e), 8.3(f) and 8.6(a),
or (c) as disclosed in the Registration Statement.
61
8.13 FOREIGN EXCHANGE CONTRACTS. Enter into any foreign currency
exchange contracts (other than foreign currency exchange contracts entered into
for the sole purpose of hedging with respect to the purchase or sale by the
Company or its Subsidiaries of inventory to be purchased or sold for payments in
foreign currencies in the ordinary course of their respective businesses)
pursuant to which the Company or its Subsidiaries may incur (i) obligations in
connection with the contracts described on Schedule 8.13 and (ii) additional
obligations in an amount not to exceed the dollar equivalent of $15,000,000 in
the aggregate at any time outstanding.
8.14 FISCAL YEAR. Permit the fiscal year of the Company to end on a
day other than December 31, unless the Company shall have given at least 45 days
prior written notice to the Administrative Agent.
SECTION 9. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) The Company shall fail to (i) pay any principal of any Note when
due in accordance with the terms hereof or thereof or to reimburse the
Issuing Lender in accordance with subsection 3.6 or (ii) pay any interest
on any Note or any other amount payable hereunder within five days after
any such interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Credit
Party in any Credit Document or which is contained in any certificate,
guarantee, document or financial or other statement furnished under or in
connection with this Agreement shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Company shall default in the observance or performance of any
agreement contained in subsection 7.7(a) or Section 8 of this Agreement or
any Credit Party shall default in the observance or performance of any
agreement contained in Section 5 of the Pledge Agreement to which it is a
party or Section 2 of the Guarantee to which it is a party; or Holdings
shall default in the performance or observance of Section 11 of the
Holdings Guarantee; or
(d) The Company or any other Credit Party shall default in the
observance or performance of any other agreement contained in any Credit
Document, and such default shall continue unremedied for a period of 30
days; or
(e) The Company or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Notes, the Revolving L/C Obligations and any intercompany debt) or in the
payment of any Contingent Obligation, beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness or
Contingent Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition
62
relating to any such Indebtedness or Contingent Obligation or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Contingent
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity, any
applicable grace period having expired, or such Contingent Obligation to
become payable, any applicable grace period having expired, PROVIDED that
the aggregate principal amount of all such Indebtedness and Contingent
Obligations which would then become due or payable would equal or exceed
$10,000,000; or
(f) (i) Holdings, the Company or any of their respective Subsidiaries
shall commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its assets, or Holdings, the Company or any
of their respective Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against
Holdings, the Company or any of their respective Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
Holdings, the Company or any of their respective Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) Holdings, the Company
or any of their respective Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
Holdings, the Company or any of their respective Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan,
(iii) a Reportable Event (other than a Reportable Event with respect to
which the 30-day notice requirement under Section 4043 of ERISA has been
waived) shall occur with respect to, or proceedings to have a trustee
appointed shall commence with respect to, or a trustee shall be appointed
to administer or to terminate, any Single Employer Plan, which Reportable
Event or institution of proceedings or appointment of a trustee is, in the
reasonable opinion of
63
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, and, in the case of a Reportable Event, such
Reportable Event shall continue unremedied for ten days after notice of
such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is
given and, in the case of the institution of proceedings, such proceedings
shall continue for ten days after commencement thereof or (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA; and in
each case in clauses (i) through (iv) above, such event or condition,
together with all other such events or conditions relating to such Plans,
if any, could subject the Company or any of its Subsidiaries to any tax,
penalty or other liabilities which in the aggregate would have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $10,000,000 or more and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within the time required by the terms of such
judgment; or
(i) Any Pledge Agreement or any Guarantee shall cease, for any
reason, to be in full force and effect or any Credit Party shall so assert
in writing, or any Pledge Agreement shall cease to be effective to grant a
perfected Lien on the collateral described therein with the priority
purported to be created thereby (other than as a result of any action or
inaction on the part of the Administrative Agent or the Lenders); or
(j) (i) Holdings shall cease to own 100% of the issued and
outstanding capital stock of the Company, free and clear of all Liens
(other than the Lien granted to the Administrative Agent, for the ratable
benefit of the Lenders, pursuant to the terms of the Holdings Pledge
Agreement), or (ii) until such time as the aggregate outstanding principal
amount of Term Loans has been reduced to $200 million or less or the
Leverage Ratio is 1.5 to 1.0 or less, the FL Group shall own
beneficially less than 25% of the outstanding voting stock of the
Company, (iii) at any time that the FL Group owns beneficially less than a
majority, but more than 25% of the outstanding voting stock of the Company,
the occurrence of any event as a result of which event, any person or group
(other than the FL Group) acquires beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission promulgated under
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) of a
percentage of the outstanding voting stock of the Company or Holdings
greater than that percentage owned beneficially by the FL Group, (iv) at a
time that the FL Group beneficially owns less than 25% of the outstanding
voting stock of the Company, the occurrence of any event, as a result of
which event, any person or group (other than the FL Group) acquires
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission promulgated under the Exchange Act) of 25% or more
of the outstanding voting stock of the Company or Holdings or (v) any
person or group of persons (other than the FL Group) at any time has the
right to designate or elect a majority of the board of directors of the
Company or Holdings);
64
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above, automatically (i) the Commitments
shall immediately terminate and the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes shall
immediately become due and payable, and (ii) all obligations of the Company in
respect of the Letters of Credit, although contingent and unmatured, shall
become immediately due and payable and the Issuing Lenders' obligations to issue
Letters of Credit shall immediately terminate and (b) if such event is any other
Event of Default, so long as any such Event of Default shall be continuing,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Company,
declare the Commitments and any Lender's obligations to issue Letters of Credit
to be terminated forthwith, whereupon the Commitments and such obligations shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice of default to the Company, (A) declare all
or a portion of the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable, and (B)
declare all or a portion of the obligations of the Company in respect of the
Letters of Credit, although contingent and unmatured, to be due and payable
forthwith, whereupon the same shall immediately become due and payable and/or
demand that the Company discharge any or all of the obligations supported by the
Letters of Credit by paying or prepaying any amount due or to become due in
respect of such obligations. All payments under this Section 9 on account of
undrawn Letters of Credit shall be made by the Company directly to a cash
collateral account established by the Administrative Agent for such purpose for
application to the Company's reimbursement obligations under subsection 3.6 as
drafts are presented under the Letters of Credit, with the balance, if any, to
be applied to the Company's obligations under this Agreement and the Notes as
the Administrative Agent shall determine with the approval of the Required
Lenders. Except as expressly provided above in this Section 9, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT; ISSUING LENDER
10.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints Chase as the Administrative Agent under this Agreement and irrevocably
authorizes Chase as Administrative Agent for such Lender to take such action on
its behalf under the provisions of the Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of the Credit Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into the
Credit Documents or otherwise exist against the Administrative Agent.
65
10.2 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement and each of the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Without limiting the
foregoing, the Administrative Agent may appoint Chase Bank Agency Services
Corporation as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Company and distribution of
funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care, except as otherwise provided in subsection 10.3.
10.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact, Affiliates
or Subsidiaries shall be (i) liable for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with the Credit Documents
(except for its or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Credit Party or any
officer thereof contained in the Credit Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, the Credit Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of the Credit Documents or for any failure of any Credit Party to perform its
obligations thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, any Credit
Document, or to inspect the properties, books or records of any Credit Party.
10.4 RELIANCE BY THE ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, 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 upon advice
and statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Credit Document unless it shall
first receive such advice or concurrence of the Required Lenders (or, where
unanimous consent of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any Credit Document in accordance with a request
of the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Notes.
66
10.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall promptly give notice thereof to the Lenders. The Administrative
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; PROVIDED that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Administrative Agent hereafter taken, including any review of
the affairs of the Credit Parties, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Credit Parties and
made its own decision to make its Loans hereunder, issue and participate in the
Letters of Credit and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under the Credit
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Credit Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, financial condition, assets, liabilities, net assets,
properties, results of operations, value, prospects and other condition or
creditworthiness of the Credit Parties which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact, Affiliates or Subsidiaries.
10.7 INDEMNIFICATION. The Lenders severally agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Credit Parties and without limiting the obligation of the Credit Parties to
do so), ratably according to the respective amounts of their respective
Commitment Percentages in effect on the date on which indemnification
is sought, 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 without limitation at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of the Credit Documents or any documents contemplated by or referred to herein
or the transactions
67
contemplated hereby or any action taken or omitted by the Administrative Agent
under or in connection with any of the foregoing; PROVIDED that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Administrative Agent's gross negligence
or willful misconduct. The agreements contained in this subsection 10.7 shall
survive the payment of the Notes and all other amounts payable hereunder.
10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITIES. Each of the
Administrative Agent and its respective Affiliates and Subsidiaries may make
loans to, accept deposits from and generally engage in any kind of business with
the Credit Parties as though the Administrative Agent were not the
Administrative Agent hereunder, as the case may be. With respect to its Loans
made or renewed by it, any Note issued to it and any Letter of Credit issued by
or participated in by it, the Administrative Agent shall have the same rights
and powers, duties and liabilities under the Credit Documents as any Lender and
may exercise the same as though it were not the Administrative Agent and the
terms "Lender" and "Lenders" shall include the Administrative Agent in its
individual capacity.
10.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders.
If the Administrative Agent shall resign as Administrative Agent under
the Credit Documents, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders which successor agent shall be
approved by the Company (which approval shall not be unreasonably withheld)
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent and the term "Administrative Agent" shall mean such
successor agent effective upon its appointment, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Notes. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Credit Documents.
SECTION 11. MISCELLANEOUS
11.1 AMENDMENTS AND WAIVERS. No Credit Document nor any terms
thereof may be amended, supplemented or modified except in accordance with the
provisions of this subsection 11.1. With the written consent of the Required
Lenders, the Administrative Agent and the respective Credit Parties may, from
time to time, enter into written amendments, supplements or modifications to any
Credit Document for the purpose of adding any provisions to such Credit Document
to which they are parties or changing in any manner the rights of the Lenders or
of any such Credit Party or any other Person thereunder or waiving, on such
terms and conditions as the Administrative Agent may specify in such instrument,
any of the requirements of any such Credit Document or any Default or Event of
Default and its consequences; PROVIDED, HOWEVER, that:
(a) no such waiver and no such amendment, supplement or modification
shall directly or indirectly release any Guarantor from all or
substantially all of its
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obligations under the Guarantee to which it is a party, without the written
consent of the Release Lenders, except as otherwise provided, PROVIDED that
no vote or consent of the Administrative Agent or any Lender shall be
required to release automatically the Collateral under any Pledge
Agreement in accordance with the terms thereof at any time that the
Leverage Ratio is 1.5:1.0 or less;
(b) no such waiver and no such amendment, supplement or modification
shall extend the scheduled maturity of any Note or scheduled installment of
any Loan or extend the expiry date of any Letter of Credit beyond the
Revolving Credit Termination Date, or reduce the rate or extend the time of
payment of interest thereon, or change the method of calculating interest
thereon, or reduce any fee payable to the Lenders hereunder, or reduce the
principal amount thereof, or extend the due date thereof, or increase the
amount of any Lender's Commitments, or extend the expiry date of any
Lender's Commitments, or amend, modify or waive any provision of this
subsection 11.1 or reduce the percentages specified in the definition of
Required Lenders or Release Lenders, or change the percentage of the
Lenders required to waive a condition precedent under Section 6.2 or
consent to the assignment or transfer by any Credit Party of any of its
rights and obligations under any Credit Document, in each case, without the
written consent of each Lender;
(c) no such waiver and no such amendment, supplement or modification
shall amend, modify or waive any provision of this Agreement directly
affecting the rights or obligations of the Swing Line Lender or the Issuing
Lender without the written consent of the Swing Line Lender or the Issuing
Lender, as the case may be; and
(c) no such waiver and no such amendment, supplement or modification
shall amend, modify or waive any provision of Section 10 without the
written consent of the Administrative Agent.
Any such waiver and any such amendment, supplement or modification described in
this subsection 11.1 shall apply equally to each of the Lenders and shall be
binding upon each Credit Party, the Lenders, the Administrative Agent and all
future holders of the Notes. No waiver, amendment, supplement or modification
of any Letter of Credit shall extend the expiry date thereof without the written
consent of the Participating Lenders. In the case of any waiver, the Company,
the Lenders and the Administrative Agent shall be restored to their former
position and rights hereunder and under the outstanding Notes, and any Default
or Event of Default waived shall be deemed to be cured and not continuing; but
no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
11.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy or telex), and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or three Business
Days after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when sent, confirmation of receipt received, or, in the case of
telex notice, when sent, answerback received, addressed as follows in the case
of each Credit Party and the Administrative Agent, and as set forth in Schedule
1.1A in the case of
69
any Lender, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:
The Company: Gulfstream Delaware Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Forstmann Little & Co.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telex: 497 23385LCO
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telex: 128173
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇
The Administrative
Agent: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsections 3.3, 3.7, 4.1, 4.3, 4.4, 4.5 and 4.6
shall not be effective until received and PROVIDED FURTHER that the failure to
provide the copies of notices to the Company provided for in this subsection
11.2 shall not result in any liability to the Administrative Agent or any
Lender.
11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
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11.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Letters of Credit and the Notes.
11.5 PAYMENT OF EXPENSES AND TAXES. The Company agrees:
(a) to pay or reimburse the Administrative Agent for all of its out-
of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification
to, the Credit Documents and any other documents prepared in connection
herewith, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent;
(b) to pay or reimburse each Lender and the Administrative Agent for
all their costs and expenses incurred in connection with, and to pay,
indemnify, and hold the Administrative Agent and each Lender harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever arising out of or in connection with, the
enforcement or preservation of any rights under any Credit Document and any
such other documents, including, without limitation, reasonable fees and
disbursements of counsel to the Administrative Agent and each Lender
incurred in connection with the foregoing and in connection with advising
the Administrative Agent with respect to its rights and responsibilities
under this Agreement and the documentation relating thereto;
(c) to pay, indemnify, and to hold the Administrative Agent and each
Lender harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes (other than withholding taxes), if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, any Credit Document and any such
other documents; and
(d) to pay, indemnify, and hold the Administrative Agent and each
Lender and their respective officers, directors, employees and agents
harmless from and against any and all other liabilities, obligations,
losses, damages (including punitive damages), penalties, fines, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, reasonable experts' and
consultants' fees and reasonable fees and disbursements of counsel and
third party claims for personal injury or real or personal property damage)
which may be incurred by or asserted against the Administrative Agent or
the Lenders (x) arising out of or in connection with any investigation,
litigation or proceeding related to this Agreement, the other Credit
Documents, the proceeds of the Loans, or any of the other transactions
contemplated hereby, whether or not the Administrative Agent or
71
any of the Lenders is a party thereto, (y) with respect to any
environmental matters, any actual or alleged environmental compliance
expenses and any actual or alleged remediation expenses in connection with
the presence, suspected presence, release or suspected release of any
Hazardous Materials in or into the air, soil, groundwater, surface water or
improvements at, on, about, under, or within the Properties, or any portion
thereof, or elsewhere in connection with the transportation of Hazardous
Materials to or from the Properties or (z) without limiting the generality
of the foregoing, by reason of or in connection with the execution and
delivery or transfer of, or payment or failure to make payments under,
Letters of Credit (it being agreed that nothing in this subsection 11.5(d)
is intended to limit the Company's obligations pursuant to subsection 3.6);
(all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"), PROVIDED that
the Company shall have no obligation hereunder with respect to indemnified
liabilities of the Administrative Agent or any Lender or any of their respective
officers, directors, employees or agents arising from (i) the gross negligence
or willful misconduct of such Administrative Agent or Lender or their respective
directors, officers, employees or agents, (ii) legal proceedings commenced
against the Administrative Agent or any Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such or (iii) legal proceedings
commenced against the Administrative Agent or any such Lender by any Transferee
(as defined in subsection 11.6). The agreements in this subsection 11.5 shall
survive repayment of the Notes and all other amounts payable hereunder.
11.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS. (a)
This Agreement shall be binding upon and inure to the benefit of the Company,
the Lenders and the Administrative Agent, all future holders of the Notes, and
their respective successors and assigns, except that the Company may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
or lending business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("PARTICIPANTS") participating interests in
any Loan owing to such Lender, any participating interest of such Lender in the
Letters of Credit, any Note held by such Lender, any Commitment of such Lender
or any other interest of such Lender hereunder and under the other Credit
Documents. In the event of any such sale by a Lender of participating interests
to a Participant, such ▇▇▇▇▇▇'s obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Note for all purposes under this Agreement and the other
Credit Documents and the Company and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Credit Documents. The
Company agrees that if amounts outstanding under this Agreement and the Notes
are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Note to the same extent as if the
amount of its participating
72
interest were owing directly to it as a Lender under this Agreement or any Note;
PROVIDED that such Participant shall only be entitled to such right of setoff if
it shall have agreed in the agreement pursuant to which it shall have acquired
its participating interest to share with the Lenders the proceeds thereof, as
provided in subsection 11.7. The Company also agrees that each Participant
shall be entitled to the benefits of subsections 4.12, 4.19, 4.20 and 4.21 with
respect to its participation in the Letters of Credit and in the Commitments and
the Loans outstanding from time to time; PROVIDED that no Participant shall be
entitled to receive any greater amount pursuant to such subsections than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
or lending business and in accordance with applicable law, at any time, sell
to any Lender or any Affiliate thereof (including any Affiliate or Subsidiary
of such transferor Lender) or, with the consent of the Company and the
Administrative Agent (which in each case shall not be unreasonably withheld),
sell to one or more additional banks or financial institutions (an "ASSIGNEE"),
all or any part of its rights and obligations under this Agreement, the
Notes and the other Credit Documents and with respect to the Letters of Credit,
pursuant to an Assignment and Acceptance executed by such Assignee, such
assigning Lender and by the Company and the Administrative Agent, and
delivered to the Administrative Agent for its acceptance and recording in
the Register (as defined below); PROVIDED that, unless the Company and the
Administrative Agent agree otherwise, (A) each such sale pursuant to this
subsection 11.6(c) of less than all of a Lender's rights and Obligations
(I) to a Person which is not then a Lender or an Affiliate of a Lender shall
be of Commitments and/or Loans of $10,000,000 or more and (II) to a Person
which is then a Lender or an Affiliate of a Lender may be in any amount,
(B) in the event of a sale of less than all of such rights and obligations,
such Lender after such sale shall retain Commitments and/or Loans
(without duplication) aggregating at least $10,000,000 and (C) each
Assignee which is a Non-U.S. Lender shall comply with the provisions of
clause (A) of subsection 4.18(e) hereof, or, with the prior written consent
of the Company which may be withheld in its sole discretion, with or without
cause, the provisions of clause (B) of subsection 4.18(e) hereof (and, in
either case, with all of the other provisions of subsection 4.18(e) hereof);
and PROVIDED FURTHER that the foregoing shall not prohibit a Lender from
selling participating interests in accordance with subsection 11.6(b) in all or
any portion of its Commitments and/or Loans (without duplication). Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with the Commitments as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent of the interest transferred, as reflected in
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto). Such
Assignment and Acceptance shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Assignee and
the resulting adjustment of Commitment Percentages arising from the purchase by
such Assignee of all or a portion of the rights and obligations of such
assigning Lender under this Agreement and the Notes. As soon as practicable
after the effective date determined pursuant to such Assignment and Acceptance,
the Company, at its own expense, shall execute and deliver to the Administrative
Agent, in exchange for the surrendered Notes, new Notes to the order of such
Assignee in amounts equal to the respective Commitments assumed by it pursuant
to such Assignment and Acceptance and, if the assigning ▇▇▇▇▇▇ has retained
Commitments hereunder, new Notes to the order of the
73
assigning ▇▇▇▇▇▇ in an amount equal to the Commitments retained by it hereunder.
Such new Notes shall be dated the Closing Date and shall otherwise be in the
form of the Notes replaced thereby. The Notes surrendered by the assigning
▇▇▇▇▇▇ shall be returned by the Administrative Agent to the Company marked
"cancelled".
(d) The Administrative Agent shall maintain at its address referred
to in subsection 11.2 a copy of each Assignment and Acceptance delivered to it
and a register (the "REGISTER") for the recordation of the names and addresses
of the Lenders and the registered owners of the Notes and the Commitments of,
the principal amount of any Term Loans, Swing Line Loans and/or Revolving
Credit Loans owing to, and, if such Lender has any Revolving Credit
Commitment, the L/C Participating Interests of, each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Company, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as the owner of the
Loans, the Notes or L/C Participating Interests recorded therein for all
purposes of this Agreement. The Register shall be available for inspection by
the Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, an Assignee and by the Company and the Administrative Agent,
together with payment to the Administrative Agent of a registration and
processing fee of $4,000, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto, record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Company.
(f) The Company authorizes each Lender to disclose to any Participant
or Assignee (each, a "TRANSFEREE") and any prospective Transferee any and all
financial information in such ▇▇▇▇▇▇'s possession concerning Holdings, the
Company and their respective Subsidiaries and Affiliates which has been
delivered to such Lender by or on behalf of the Company pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Company in connection with such Lender's credit evaluation of Holdings, the
Company and their respective Subsidiaries and Affiliates prior to becoming a
party to this Agreement.
(g) If, pursuant to this subsection 11.6, any interest in this
Agreement or any Note or Letter of Credit is transferred to any Transferee which
would be a Non-U.S. Lender upon effectiveness of such transfer the assigning
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the assigning Lender (for the benefit of the
assigning Lender, the Administrative Agent and the Company) that under
applicable law and treaties no taxes will be required to be withheld by the
Administrative Agent, the Company or the assigning Lender with respect to any
payments to be made to such Transferee in respect of the Loans or L/C
Participating Interests, (ii) to furnish to the assigning Lender (and, in the
case of any Assignee registered in the Register, the Administrative Agent and
the Company) such Internal Revenue Service Forms required to be furnished
pursuant to subsection 4.18(e) and (ii) to agree (for the benefit of the
assigning Lender, the Administrative Agent and the Company) to be bound by the
provisions of subsection 4.18(e).
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(h) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law; provided that any transfer of Loans or Notes
upon, or in lieu of, enforcement of or the exercise of remedies under any such
pledge shall be treated as an assignment thereof which shall not be made without
compliance with the requirements of this subsection 11.6.
11.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of any of its Term
Loans, Revolving Credit Loans (other than payment of Swing Line Loans) or L/C
Participating Interests, as the case may be, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in clause (f) of
Section 9, or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of such other
Lender's Term Loans, Revolving Credit Loans or L/C Participating Interests, as
the case may be, or interest thereon, such benefitted Lender shall purchase for
cash from the other Lenders such portion of each such other Lender's Term Loans,
Revolving Credit Loans or L/C Participating Interests, as the case may be, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; PROVIDED, HOWEVER, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The Company agrees that
each Lender so purchasing a portion of another Lender's Loans and/or L/C
Participating Interests may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion. The Administrative Agent shall
promptly give the Company notice of any set-off, PROVIDED that the failure to
give such notice shall not affect the validity of such set-off.
(b) Upon the occurrence of an Event of Default specified in
subsection 9(a) or 9(f), the Administrative Agent and each Lender are hereby
irrevocably authorized at any time and from time to time without notice to the
Company, any such notice being hereby waived by the Company, to set off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Administrative Agent or such Lender to or for the credit or the account of the
Company, or any part thereof in such amounts as the Administrative Agent or such
Lender may elect, on account of the liabilities of the Company hereunder and
under the other Credit Documents and claims of every nature and description of
the Administrative Agent or such Lender against the Company, in any currency,
whether arising hereunder, under any other Credit Document or otherwise, as the
Administrative Agent or such Lender may elect, whether or not the Administrative
Agent or such Lender has made any demand for payment and although such
liabilities and claims may be contingent or unmatured. The Administrative Agent
and each Lender shall notify the
75
Company promptly of any such setoff made by it and the application made by it of
the proceeds thereof, PROVIDED that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of the
Administrative Agent and each Lender under this paragraph are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which the Administrative Agent or such Lender may have.
11.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Administrative Agent. This Agreement
shall become effective with respect to the Company, the Administrative Agent and
the Lenders when the Administrative Agent shall have received copies of this
Agreement executed by the Company and the Lenders, or, in the case of any
Lender, shall have received telephonic confirmation from such Lender stating
that such ▇▇▇▇▇▇ has executed counterparts of this Agreement or the signature
pages hereto and sent the same to the Administrative Agent.
11.9 INTEGRATION. This Agreement and the other Credit Documents
represent the entire agreement of the Credit Parties, the Administrative Agent
and the Lenders with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to the subject matter hereof or
thereof not expressly set forth or referred to herein or in the other Credit
Documents.
11.10 GOVERNING LAW; NO THIRD PARTY RIGHTS. THIS AGREEMENT AND THE
NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. THIS AGREEMENT IS SOLELY FOR THE BENEFIT OF
THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, AND, EXCEPT AS
SET FORTH IN SUBSECTION 11.6, NO OTHER PERSONS SHALL HAVE ANY RIGHT, BENEFIT,
PRIORITY OR INTEREST UNDER, OR BECAUSE OF THE EXISTENCE OF, THIS AGREEMENT.
11.11 SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH PARTY TO THIS
AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
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(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT
SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO SUCH PARTY AT ITS ADDRESS SET FORTH IN SUBSECTION 11.2 OR AT
SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN
NOTIFIED PURSUANT THERETO; AND
(iv) AGREES THAT NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT
TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.
(b) EACH PARTY HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING REFERRED TO IN PARAGRAPH (a) ABOVE.
11.12 ACKNOWLEDGEMENTS. The Company hereby acknowledges that:
(a) none of the Administrative Agent or any Lender has any fiduciary
relationship to any Credit Party, and the relationship between the
Administrative Agent and the Lenders, on the one hand, and the Credit
Parties, on the other hand, is solely that of creditor and debtor; and
(b) no joint venture exists among the Lenders or among any Credit
Parties and the Lenders.
77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
GULFSTREAM DELAWARE CORPORATION
By:
--------------------------
Title:
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender
By:
--------------------------
Title:
ANNEX A
PRICING GRID
Eurodollar ABR Commitment
Leverage Ratio Level Applicable Margin Applicable Margin Fee Rate
-------------------- ----------------- ----------------- --------
I 2.00% 1.00% 0.500%
II 1.75% 0.75% 0.375%
III 1.50% 0.50% 0.375%
IV 1.25% 0.25% 0.300%
V 1.00% 0% 0.300%
VI 0.75% 0% 0.250%
EXHIBIT A TO
CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
$___________ New York, New York
_________ __, 1996
FOR VALUE RECEIVED, the undersigned, GULFSTREAM DELAWARE CORPORATION,
a Delaware corporation (the "COMPANY"), hereby unconditionally promises to pay
to the order of ________________ (the "LENDER") on the Revolving Credit
Termination Date, as defined in the Credit Agreement referred to below, at the
office of The Chase Manhattan Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America and in immediately
available funds, the principal amount of the lesser of (a) _____________________
DOLLARS ($_________) and (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by the Lender to the undersigned pursuant to
subsection 3.1 of the Credit Agreement. The undersigned further agrees to pay
interest in like money at such office on the unpaid principal amount hereof and
unpaid interest hereon from time to time from the date hereof at the rates and
on the dates specified in subsection 4.7 of the Credit Agreement.
The holder of this Note is authorized to record on the schedule
annexed hereto and made a part hereof and on a continuation thereof, the
Borrowing Date, Type and amount of each Revolving Credit Loan made by the Lender
pursuant to subsection 3.1 of the Credit Agreement and the date and amount of
each payment or prepayment of principal hereof. In the absence of manifest
error, each such recordation shall constitute PRIMA FACIE evidence of the
accuracy of the information recorded, PROVIDED that the failure of the Lender to
make such recordation (or any error in such recordation) shall not affect the
obligations of the Company hereunder or under the Credit Agreement.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement, dated as of ______ __, 1996, among the Company, the Lender and
certain other lenders parties thereto and The Chase Manhattan Bank, as
Administrative Agent (as the same may from time to time be amended, modified or
supplemented, the "CREDIT AGREEMENT"), and is entitled to the benefits thereof,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
prepayment in whole or in part as provided therein. This Note is secured and
guaranteed as provided in the Credit Documents. Reference is hereby made to the
Credit
2
Documents for a description of the assets in which a security interest has been
granted, the nature and extent of the security and the guarantees, the terms and
conditions upon which the security interests and each guarantee were granted and
the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
GULFSTREAM DELAWARE CORPORATION
By:
---------------------------
Name:
Title:
SCHEDULE A
TO REVOLVING CREDIT NOTE
LOANS AND REPAYMENTS OF LOANS
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Amount of Type of Amount of Principal Unpaid Principal Notation
Date Loans Loan of Loans Repaid Balance of Loans Made By
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EXHIBIT B TO
CREDIT AGREEMENT
FORM OF SWING LINE NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
$_______________ New York, New York
_________ __, 1996
FOR VALUE RECEIVED, the undersigned, GULFSTREAM DELAWARE CORPORATION,
a Delaware corporation (the "COMPANY"), hereby unconditionally promises to pay
to the order of THE CHASE MANHATTAN BANK, (the "LENDER"), on the Revolving
Credit Termination Date, as defined in the Credit Agreement referred to below,
at the office of The Chase Manhattan Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America and in
immediately available funds, the principal amount of the lesser of (a) TWENTY
MILLION DOLLARS ($20,000,000), and (b) the aggregate unpaid principal amount of
all Swing Line Loans made by the Lender to the undersigned pursuant to
subsection 3.7 of the Credit Agreement. The undersigned further agrees to pay
interest in like money from time to time from the date hereof at the rates and
on the dates specified in subsection 4.7 of the Credit Agreement.
The Lender is authorized to record on the schedule annexed hereto and
made a part hereof and on a continuation thereof, the Borrowing Date, the amount
of each Swing Line Loan and the date and amount of each payment or prepayment of
principal hereof. In the absence of manifest error, each such recordation shall
constitute PRIMA FACIE evidence of the accuracy of the information recorded,
PROVIDED that the failure of the Lender to make such recordation (or any error
in such recordation) shall not affect the obligations of the Company hereunder
or under the Credit Agreement.
This Note is the Swing Line Note referred to in the Credit Agreement,
dated as of _____ __, 1996, among the Company, the Lender, the other lenders
parties thereto and The Chase Manhattan Bank, as Administrative Agent (as the
same may from time to time be amended, modified or supplemented, the "CREDIT
AGREEMENT"), and is entitled to the benefits thereof, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to prepayment in whole or
in part as provided therein. This Note is secured and guaranteed as provided in
the Credit Documents. Reference is hereby made to the Credit Documents for a
description of the assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
2
Upon the occurrence of any one or more of the Events of Default, all
amounts remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
GULFSTREAM DELAWARE CORPORATION
By:
---------------------------
Name:
Title:
SCHEDULE A
TO SWING LINE NOTE
SWING LINE
LOANS AND PAYMENTS OF PRINCIPAL
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Amount of Type of Amount of Principal Unpaid Principal Notation
Date Loans Loan Repaid Balance Made By
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EXHIBIT C TO
CREDIT AGREEMENT
FORM OF TERM NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
$______________ New York, New York
_______ __, 1996
FOR VALUE RECEIVED, the undersigned, GULFSTREAM DELAWARE CORPORATION,
a Delaware corporation (the "BORROWER"), hereby unconditionally promises to pay
to the order of __________ (the "LENDER") or its registered assigns at the
office of The Chase Manhattan Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America and in immediately
available funds, the principal amount of _________________ DOLLARS ($_________),
or, if less, the unpaid principal amount of the Term Loan of the Lender. The
principal amount of the Term Loan of the Lender shall be paid in the amounts and
on the dates specified in subsection 2.2 of the Credit Agreement. The Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in subsection 4.7 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the Term
Loan extended by the Lender and the date and amount of each payment or
prepayment of principal with respect thereto, the date of each interest rate
conversion pursuant to subsection 4.3 of the Credit Agreement and the principal
amount with respect thereto and, in the case of Eurodollar Loans, the length of
each Interest Period and the Eurodollar Rate with respect thereto. In the
absence of manifest error, each such recordation shall constitute PRIMA FACIE
evidence of the accuracy of the information recorded, PROVIDED that the failure
of the Lender to make such recordation (or any error in such recordation) shall
not affect the obligations of the Company in respect of such Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit
Agreement, dated as of ________ __, 1996 among Gulfstream Delaware Corporation,
a Delaware corporation, the Borrower, the Lender, the other banks, financial
institutions and other entities from time to time parties thereto and The Chase
Manhattan Bank, as Administrative Agent (as the same may be amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is guaranteed as provided in the Credit Documents.
Reference is hereby made to the Credit Documents for a description of the nature
and extent of the
2
guarantees, the terms and conditions upon which each guarantee was granted and
the rights of the holder of this Note in respect thereof.
This Note and the Loans evidenced hereby may be transferred in whole
or in part only by registration of such transfer on the register maintained for
such purpose by or on behalf of the Company as provided in subsection 11.6(d) of
the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
GULFSTREAM DELAWARE CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
SCHEDULE A
TO REVOLVING CREDIT NOTE
LOANS AND REPAYMENTS OF LOANS
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Amount of Type of Amount of Principal Unpaid Principal Notation
Date Loans Loan of Loans Repaid Balance of Loans Made By
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EXHIBIT E TO
CREDIT AGREEMENT
FORM OF HOLDINGS GUARANTEE
HOLDINGS GUARANTEE, dated as of _____ __, 1996, made by GULFSTREAM
AEROSPACE CORPORATION (this "GUARANTEE"), a Delaware corporation (the
"GUARANTOR"), in favor of THE CHASE MANHATTAN BANK, as Administrative Agent (in
such capacity, the "ADMINISTRATIVE AGENT") for the banks and other financial
institutions (the "LENDERS") that are parties to the Credit Agreement described
below.
W I T N E S S E T H :
WHEREAS, GULFSTREAM DELAWARE CORPORATION, a Delaware corporation (the
"COMPANY"), is party to the Credit Agreement, dated as of the date hereof among
the Company, the Lenders and the Administrative Agent (as amended, supplemented
or otherwise modified from time to time, the "CREDIT AGREEMENT");
WHEREAS, pursuant to the terms of the Credit Agreement and the other
Credit Documents, the Lenders have severally agreed to make loans to, and the
Issuing Bank has agreed to issue certain letters of credit for the account of,
the Company;
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective loans to, and the Issuing Lenders to issue certain
letters of credit for the account of, the Company under the Credit Agreement
that the Guarantor shall have executed and delivered this Guarantee to the
Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
make Extensions of Credit, each Guarantor hereby agrees with and for the benefit
of the Administrative Agent and the Lenders as follows:
1. DEFINED TERMS. As used in this Guarantee, terms defined in the
Credit Agreement (unless otherwise defined herein) are used herein as therein
defined.
2. GUARANTEE. The Guarantor hereby unconditionally and irrevocably
guarantees to the Administrative Agent and the Lenders and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
by the Company when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations, and the Guarantor further agrees to pay any and
all expenses (including, without limitation, all reasonable fees and
disbursements of counsel) which may be paid or incurred by the Administrative
Agent or any Lender in enforcing, or obtaining advice of counsel in respect of,
any rights with respect to, or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, the Guarantor under
this Guarantee. This Guarantee constitutes a guarantee of payment
2
when due and not of collection, and the Guarantor specifically agrees that it
shall not be necessary or required that the Administrative Agent or any Lender
exercise any right, assert any claim or demand or enforce any remedy whatsoever
against the Company (or any other Person) before or as a condition to the
obligations of the Guarantor hereunder.
No payment or payments made by the Company, any other guarantor or any
other Person or received or collected by the Administrative Agent or any Lender
from the Company, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder which shall, notwithstanding any such payment or payments
other than payments made by the Guarantor in respect of the Obligations or
payments received or collected from the Guarantor in respect of the Obligations,
remain liable for the Obligations until the Obligations are paid in full, no
Letters of Credit are outstanding and the Commitments are terminated.
The Guarantor agrees that whenever, at any time, or from time to time,
it shall make any payment to the Administrative Agent or any Lender on account
of its liability hereunder, it will notify the Administrative Agent in writing
that such payment is made under this Guarantee for such purpose.
4. RIGHT OF SET-OFF. Upon the occurrence and during the continuance
of any Event of Default specified in the Credit Agreement, the Guarantor hereby
irrevocably authorizes each Lender at any time and from time to time without
notice to the Guarantor, any such notice being expressly waived by the
Guarantor, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender to or for the credit or the account of the Guarantor, or
any part thereof, in such amounts as such Lender may elect, against and on
account of the obligations and liabilities of the Guarantor to such Lender
hereunder and claims of every nature and description of such Lender against the
Guarantor, in any currency, whether arising hereunder, under the Credit
Agreement, the Notes, the Letters of Credit or otherwise under any other Credit
Document, as such Lender may elect, whether or not the Administrative Agent or
any Lender has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. Each Lender agrees to
notify the Guarantor promptly of any such set-off and the application made by
such Lender, PROVIDED that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
paragraph are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
5. SUBROGATION, ETC. Notwithstanding any payment or payments made by
the Guarantor hereunder, or any set-off or application of funds of the Guarantor
by any Lender, the Guarantor shall not exercise any of the rights of the
Administrative Agent or any Lender which the Guarantor may acquire by way of
subrogation, by any payment made hereunder, by reason of such set-off or
application of funds or otherwise, against the Company or any collateral
3
security or guarantee or right of set-off held by any Lender for the payment of
the Obligations, nor shall the Guarantor seek or be entitled to seek any
contribution or reimbursement from the Company or any other guarantor in respect
of payments made by such Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Lenders by the Company on account of the
Obligations are paid in full, no Letters of Credit are outstanding and the
Commitments are terminated. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full, any Letter of Credit shall be outstanding or the
Commitments shall not have been terminated, such amount shall be held by the
Guarantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Administrative Agent in the exact form received
by such Guarantor (duly indorsed by the Guarantor to the Administrative Agent,
if required), to be applied against the Obligations, whether matured or
unmatured, in such order as required by the applicable Credit Documents.
6. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF
RIGHTS. The Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantor and without notice to or
further assent by the Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent or any Lender may be rescinded by
such party and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of set-off with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Lender and the Credit Agreement, the Notes, the other Credit
Documents, any Letter of Credit and any other collateral security document or
other guarantee or document in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent
and/or any Lender may deem advisable from time to time, and any collateral
security, guarantee or right of set-off at any time held by the Administrative
Agent or any Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any
Lender shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Obligations or for this Guarantee or
any property subject thereto.
7. GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Guarantee or acceptance of this Guarantee; the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Company or the Guarantor and the
Administrative Agent or any Lender shall likewise be conclusively presumed to
have been had or consummated in reliance upon this Guarantee. The Guarantor
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon the Company or any of the Guarantors with respect to
the Obligations. The Guarantor understands and agrees that this Guarantee shall
be construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of the Credit
Agreement, the Notes, the Letters of Credit, any of the other Credit Documents,
any of the Obligations or any
4
other collateral security therefor or guarantee or right of set-off with respect
thereto at any time or from time to time held by the Administrative Agent or any
Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Company against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Company
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Company for the Obligations, or of the
Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Company or any other
Person or against any collateral security or guarantee for the Obligations or
any right of set-off with respect thereto, and any failure by the Administrative
Agent or any Lender to pursue such other rights or remedies or to collect any
payments from the Company or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of set-off, or
any release of the Company or any such other Person or any such collateral
security, guarantee or right of set-off, shall not relieve such Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Lender against the Guarantor. This Guarantee shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon the Guarantor and the successors and assigns thereof, and shall inure
to the benefit of the Administrative Agent and the Lenders, and their respective
successors, indorsees, transferees and assigns, until all the Obligations and
the obligations of the Guarantor under this Guarantee shall have been satisfied
by payment in full, no Letter of Credit shall remain outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Company may be free from any Obligations.
8. REINSTATEMENT. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or the Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Company or the Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
9. PAYMENTS. The Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in U.S.
Dollars at the office of the Administrative Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
10. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents
and warrants that:
(a) the Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in
which it is currently engaged, except to the extent that the failure to
possess such corporate or partnership power and authority and such
5
legal right would not, in the aggregate, have a material adverse effect on
the business, financial condition, assets or results of operations of the
Guarantor and its Subsidiaries taken as a whole (a "Material Adverse
Effect");
(b) the Guarantor has the corporate power and authority and the legal
right to execute and deliver, and to perform its obligations under, the
Credit Documents to which it is a party, and has taken all necessary
corporate or partnership action to authorize its execution, delivery and
performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding obligations
of the Guarantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(d) the execution, delivery and performance by the Guarantor of this
Guarantee will not violate any Requirement of Law or any Contractual
Obligation applicable to or binding upon the Guarantor, which violations,
individually or in the aggregate, would have a material adverse effect on
the ability of the Guarantor to perform its obligations hereunder or which
would have a Material Adverse Effect (not waived by the other parties
hereto) and will not result in or require the creation or imposition of any
Lien on any of the properties or assets of the Guarantor pursuant to any
Requirement of Law applicable to it or any Contractual Obligation of the
Guarantor (other than any Liens created pursuant to the Credit Documents);
(e) no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or Governmental Authority and no consent of
any other Person (including, without limitation, any stockholder or
creditor of the Guarantor) is required in connection with the execution,
delivery, performance, validity or enforceability of this Guarantee; and
(f) no litigation or investigation known to the Guarantor or
proceeding of or by any Governmental Authority or other Person is pending
against the Guarantor (i) with respect to any of this Guarantee (ii) which
would have a Material Adverse Effect.
The Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by the Guarantor on each Borrowing Date by the
Company under the Credit Agreement on and as of such Borrowing Date as though
made hereunder on and as of such Borrowing Date.
11. COVENANTS. The Guarantor hereby covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date hereof and
until all amounts owing to the Administrative Agent and the Lenders by the
Company on account of the Obligations are paid in full, no Letters of Credit are
outstanding and the Commitments are terminated, the Guarantor shall not conduct,
transact or otherwise engage in any business or operations, incur, create,
assume or suffer to exist any Indebtedness, Contingent Obligations or
6
other liabilities or obligations or Liens, or own, lease, manage or otherwise
operate any properties or assets, other than (i) incident to the ownership of
the capital stock of the Company, and the exercise of rights and performance of
obligations in connection therewith, (ii) the entry into, and exercise of rights
and performance of obligations in respect of this Guarantee and the Holdings
Pledge Agreement, (iii) the issuance of equity securities and unsecured debt
securities PROVIDED that the net proceeds of such issuance are advanced
(pursuant to instruments subordinated to the Obligations in a manner
satisfactory to the Administrative Agent) to or contributed to the capital of,
the Company, in each case promptly after the issuance thereof, (iv) the making
of loans to the Company, (v) the conduct or direct or indirect ownership of
other businesses if such other businesses are related to the business of the
Company and such businesses are effectively contributed to the Company within 90
days of its acquisition by Parent, (vi) the issuance of guarantees of
obligations of the Company and its Subsidiaries otherwise permitted under the
Credit Agreement, (vii) the filing of registration statements, and compliance
with applicable reporting and other obligations, under federal, state or other
securities laws, (viii) the listing of its equity securities and compliance with
applicable reporting and other obligations in connection therewith, (ix) the
retention of transfer agents, private placement agents, underwriters, counsel,
accountants and other advisors and consultants, (x) the performance of
obligations under in and compliance with its certificate of incorporation and
by-laws, or any applicable law, ordinance, regulation, rule, order, judgment,
decree or permit, including, without limitation, as a result of or in connection
with the activities of the Company and its Subsidiaries, (xi) the issuance of
the Holdings Note to the Company and (xii) the incurrence and payment of any
taxes for which it may be liable.
12. SEVERABILITY. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. PARAGRAPH HEADINGS. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
14. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
paragraph 15 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights
7
and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.
15. INTEGRATION; WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS;
GOVERNING LAW. This Guarantee represents the agreement of the Guarantor with
respect to the subject matter hereof and there are no promises or
representations by the Guarantor, the Administrative Agent or any Lender
relative to the subject matter hereof not reflected herein. None of the terms
or provisions of this Guarantee may be waived, amended or supplemented or
otherwise modified except by a written instrument executed by the Guarantor and
the Administrative Agent, PROVIDED that any provision of this Guarantee may be
waived by the Administrative Agent and the Lenders in a letter or agreement
executed by the Administrative Agent or by telex or facsimile transmission from
the Administrative Agent. This Guarantee shall be binding upon the successors
and assigns of the Guarantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their respective successors and
assigns. THIS GUARANTEE SHALL BE GOVERNED BY, AND BE CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
16. NOTICES. All notices, requests and demands to or upon the
Guarantor or the Administrative Agent or any Lender to be effective shall be in
writing or by telecopy or telex and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or, in
the case of mail, three days after deposit in the postal system, first class
postage pre-paid, or, in the case of telecopy notice, confirmation of receipt
received, or, in the case of telex notice, when sent, answerback received,
addressed to a party at the address provided for such party in subsection 11.2
of the Credit Agreement or Schedule I hereto, as the case may be.
17. COUNTERPARTS. This Guarantee may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
18. SUBMISSION TO JURISDICTION; WAIVERS. (a) THE GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO ANY CREDIT DOCUMENT, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF
THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR
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PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR
CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE AFFECTED BY MAILING A COPY THEREOF, BY REGISTERED OR CERTIFIED MAIL
(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH
GUARANTOR AT ITS ADDRESS SET FORTH ON SCHEDULE I HERETO OR AT SUCH OTHER
ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT
TO SECTION 15 HEREOF;
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO SUE IN ANY OTHER JURISDICTION.
(b) EACH OF THE ADMINISTRATIVE AGENT, EACH LENDER AND THE GUARANTOR HEREBY
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING REFERRED
TO IN PARAGRAPH (a) ABOVE.
20. AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guarantee with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guarantee shall, as between the Administrative Agent and the
Lenders be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and neither the Guarantor, the
Company nor any other guarantor shall be under any obligation, or entitlement,
to make any inquiry respecting such authority.
9
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
GULFSTREAM AEROSPACE CORPORATION
a Delaware Corporation
By:
-----------------------------
Title:
SCHEDULE I
ADDRESS OF GUARANTOR
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
EXHIBIT F TO
CREDIT AGREEMENT
FORM OF HOLDINGS PLEDGE AGREEMENT
HOLDINGS PLEDGE AGREEMENT dated as of _____ __, 1996 made by
GULFSTREAM AEROSPACE CORPORATION, a Delaware corporation (the "PLEDGOR"), in
favor of THE CHASE MANHATTAN BANK ("CHASE"), as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT") for the lenders (the "LENDERS") parties to
the Credit Agreement, dated as of _____ __, 1996 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among GULFSTREAM
DELAWARE CORPORATION (the "Company"), the Administrative Agent and the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make loans to, and the Issuing Lenders have agreed to issue certain
letters of credit for the account of, the Company upon the terms and subject to
the conditions set forth therein;
WHEREAS, the Pledgor is the legal and beneficial owner of the shares
of Pledged Stock (as hereinafter defined) issued by the Persons named under the
caption "Issuer" on Schedules I and II hereto;
WHEREAS, the Pledgor has executed and delivered the Holdings Guarantee
dated as of the date hereof (as amended, supplemented or otherwise modified from
time to time, the "HOLDINGS GUARANTEE") pursuant to which, subject to the terms
and conditions thereof, the Pledgor has guaranteed to the Administrative Agent
and the Lenders the punctual payment and performance of all amounts and other
obligations owing by the Issuer pursuant to the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective loans to, and the Issuing Lenders to issue certain
letters of credit for the account of, the Company under the Credit Agreement
that the Pledgor shall have executed and delivered this Pledge Agreement to the
Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to make their respective loans to, and the Issuing Lenders to issue
certain letters of credit for the account of, the Company under the Credit
Agreement, the Pledgor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms that are
defined in the Credit Agreement and used herein are so used as so defined; and
the following terms which are defined in the Uniform Commercial Code in effect
in the State of New York on the date
2
hereof are used herein as so defined: Accounts, Chattel Paper, General
Intangibles and Instruments; and the following terms shall have the following
meanings:
"CODE": the Uniform Commercial Code from time to time in effect in
the State of New York.
"COLLATERAL": the collective reference to the Pledged Stock and all
Proceeds thereof.
"GUARANTEE OBLIGATIONS": all indebtedness, obligations and
liabilities of such Pledgor under the Holdings Guarantee, including, without
limitation, all guarantee obligations in respect of the unpaid principal of and
interest on the Loans, all obligations and liabilities of the Company with
respect to the Letters of Credit and all other Obligations of the Company to the
Administrative Agent and the Lenders, whether direct or indirect, absolute or
contingent, matured or unmatured, due or to become due, or now existing or
hereafter incurred under the Credit Agreement and the other Credit Documents.
"ISSUER": with respect to any Pledged Stock, the Issuers from time to
time listed on Schedules I and II hereto as the issuer of such Pledged Stock.
"PLEDGE AGREEMENT": this Pledge Agreement, as amended, supplemented
or otherwise modified from time to time.
"PLEDGED STOCK": all of the shares of capital stock of the Issuers
listed on Schedules I and II hereto (but not more than 65% of all shares of each
class of capital stock of the Issuers listed on Schedule II hereto) now owned or
at any time hereafter acquired by the Pledgor or in which the Pledgor now has or
may from time to time acquire any right, title or interest, together with all
stock certificates, options or rights of any nature whatsoever that may be
issued or granted by the Issuer thereof to the Pledgor while this Pledge
Agreement is in effect.
"PROCEEDS": all "proceeds" as such term is defined in Section 9-
306(1) of the Code on the date hereof and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Stock, and any and
all collections on the foregoing or distributions with respect to the foregoing.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Pledgor hereby delivers
to the Administrative Agent, for the ratable benefit of the Lenders, all of the
Pledgor's right, title and interest in the Pledged Stock, and hereby transfers
and grants to the Administrative Agent, for the ratable benefit of the Lenders,
a first security interest in all of the Pledgor's right, title and interest in
all of the Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Guarantee Obligations.
3
3. STOCK POWERS. Concurrently with the delivery to the
Administrative Agent of each certificate representing one or more shares of
Pledged Stock, the Pledgor shall deliver an undated stock power covering such
certificate, duly executed in blank by the Pledgor.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants that:
(a) the shares of capital stock of each of the Issuers listed on
Schedules I and II hereto which are identified as Pledged Stock on said
Schedules I and II constitute (i) all of the issued and outstanding shares of
capital stock of the Issuers listed on Schedule I hereto which are owned by the
Pledgor; and (ii) all of the issued and outstanding shares of capital stock of
the Issuers listed on Schedule II hereto which are owned by the Pledgor (but not
in excess of 65% of the issued and outstanding shares of all classes of the
capital stock of such Issuers).
(b) all the shares of Pledged Stock have been duly and validly issued
and are fully paid and nonassessable;
(c) the Pledgor is the record and beneficial owner of, and has good
title to, the Collateral, free of any and all Liens or options in favor of, or
claims of, any other Person, except the Lien created by this Pledge Agreement;
and
(d) upon delivery to the Administrative Agent of the stock
certificates evidencing the Pledged Stock, the Lien granted pursuant to this
Pledge Agreement will constitute a valid, perfected first priority Lien on the
Collateral (except, with respect to Proceeds, only to the extent permitted by
Section 9-306 of the Code), enforceable as such against all creditors of the
Pledgor and any Persons purporting to purchase any Collateral from the Pledgor
except in each case as enforceability may be affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(e) The Pledgor's chief executive office and chief place of business,
and the place where the Pledgor keeps its records concerning the Collateral, is
located at: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other
location as the Pledgor shall inform the Administrative Agent in accordance with
subsection 6(e).
The Pledgor agrees that the foregoing representations and warranties
shall be deemed to have been made by it on each Borrowing Date by the Pledgor
under the Credit Agreement on and as of such Borrowing Date as though made
hereunder on and as of such Borrowing Date.
5. COVENANTS. The Pledgor covenants and agrees with the
Administrative Agent and the Lenders, that, from and after the date of this
Pledge Agreement until the Guarantee Obligations are paid in full, no Letters of
Credit are outstanding and the Commitments are terminated:
4
(a) If the Pledgor shall, as a result of its ownership of the
Collateral, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization),
promissory note or other instrument, option or rights, whether in addition to,
in substitution of, as a conversion of, or in exchange for any of the
Collateral, or otherwise in respect thereof, the Pledgor shall accept the same
as the agent of the Administrative Agent and the Lenders, hold the same in trust
for the Administrative Agent and the Lenders and deliver the same forthwith to
the Administrative Agent in the exact form received, duly indorsed by the
Pledgor to the Administrative Agent, if required, together with an undated stock
power or endorsement, as appropriate, covering such certificate, note or
instrument duly executed in blank by the Pledgor and with, if the Administrative
Agent so requests, signature guarantees, to be held by the Administrative Agent,
subject to the terms hereof, as additional collateral security for the Guarantee
Obligations. Any sums paid upon or in respect of the Collateral upon the
liquidation or dissolution of any Issuer shall be paid over to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Guarantee Obligations, and, in case any distribution of capital
shall be made on or in respect of the Collateral or any property shall be
distributed upon or with respect to the Collateral pursuant to the
recapitalization or reclassification of the capital of such Issuer or pursuant
to the reorganization thereof, the property so distributed shall be delivered to
the Administrative Agent to be held by it hereunder as additional collateral
security for the Guarantee Obligations. If any sums of money or property so
paid or distributed in respect of the Collateral shall be received by the
Pledgor, the Pledgor shall, until such money or property is paid or delivered to
the Administrative Agent, hold such money or property in trust for the Lenders,
segregated from other funds of the Pledgor, as additional collateral security
for the Guarantee Obligations.
(b) Without the prior written consent of the Administrative Agent and
except as permitted by, or not prohibited under, the Credit Agreement, the
Pledgor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock, membership interests or other equity securities of
any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of any
nature of such Issuer, (ii) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, or (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Collateral, or any interest therein,
except for the Lien provided for by this Pledge Agreement. The Pledgor will
defend the right, title and interest of the Administrative Agent and the Lenders
in and to the Collateral against the claims and demands of all Persons
whomsoever.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of the Pledgor, the Pledgor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purposes of obtaining or preserving the full benefits
of this Pledge Agreement and of the rights and powers herein granted. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other Instrument or Chattel
5
Paper, such note, Instrument or Chattel Paper shall be immediately delivered to
the Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Pledge
Agreement.
(d) The Pledgor agrees to pay, and to hold the Administrative Agent
and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
similar taxes which may be payable or determined to be payable with respect to
any of the Collateral or in connection with any of the transactions contemplated
by this Pledge Agreement.
6. CASH DIVIDENDS; VOTING RIGHTS. (a) Unless an Event of Default
shall have occurred and be continuing and the Administrative Agent shall (unless
such Event of Default is an Event of Default specified in subsection 9(f) of the
Credit Agreement, in which case no such notice need be given) have given notice
to the Pledgor of the Administrative Agent's intent to exercise its rights
pursuant to paragraph 8 below, the Pledgor shall be (i) permitted to receive all
cash dividends or distributions to the extent permitted in the Credit Agreement
in respect of the Pledged Stock and (ii) permitted to exercise all voting,
corporate, limited liability company and other rights of ownership with respect
to the Pledged Stock, PROVIDED, HOWEVER, that no vote shall be cast or corporate
right exercised or other action taken which, in the Administrative Agent's
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Credit Agreement or any
of the other Credit Documents.
(b) If an Event of Default shall have occurred and be continuing and
the Administrative Agent shall (unless such Event of Default is an Event of
Default specified in subsection 9(f) of the Credit Agreement, in which case no
such notice need be given) have given notice to the Pledgor of its intent to
exercise its rights pursuant to paragraph 8 below, (i) all dividends, interest
payments and other distributions (including cash) paid on or in respect of the
Pledged Stock shall be paid to and retained by the Administrative Agent as
Collateral hereunder (or if received by the Pledgor, shall be held in trust by
the Pledgor for the benefit of the Administrative Agent and the Lenders and
shall be forthwith delivered by it), and (ii) all voting, corporate, limited
liability company and other rights pertaining to the Pledged Stock, if any,
shall be exercised by the Administrative Agent.
7. RIGHTS OF THE LENDERS AND THE ADMINISTRATIVE AGENT. (a) If an
Event of Default shall occur and be continuing and the Administrative Agent
shall (unless such Event of Default is an Event of Default specified in
subsection 9(f) of the Credit Agreement, in which case no such notice need be
given) give notice of its intent to exercise its rights hereunder to the
Pledgor, (i) the Administrative Agent shall have the right to receive any and
all cash dividends, distributions and payments or other income paid in respect
of the Collateral and make application thereof to the Guarantee Obligations in
such order as the Administrative Agent may determine and (ii) all shares of the
Pledged Stock shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise (A)
all voting, corporate, member, creditor and other rights, powers and privileges
pertaining to such Collateral at any meeting of shareholders of any Issuer and
(B) any and all rights of
6
conversion, exchange, subscription and any other rights, privileges or options
pertaining to the Collateral as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the structure of any Issuer, or
upon the exercise by the Pledgor or the Administrative Agent of any right,
privilege or option pertaining to the Collateral, and in connection therewith,
the right to deposit and deliver any and all of the Collateral with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as it may determine), all without liability except to
account for property actually received by it and except for its gross negligence
or willful misconduct, but the Administrative Agent shall have no duty to the
Pledgor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the Lenders hereunder
shall not be conditioned or contingent upon the pursuit by the Administrative
Agent or any Lender of any right or remedy against any Issuer or the Pledgor or
against any other Person which may be or become liable in respect of all or any
part of the Guarantee Obligations or against any collateral security therefor,
guarantee therefor or right of set-off with respect thereto. Neither the
Administrative Agent nor any Lender shall be liable for any failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so, nor shall the Administrative Agent be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Pledgor or any other
Person or to take any other action whatsoever with regard to the Collateral or
any part thereof.
(c) At any time that the Leverage Ratio then in effect is less than
or equal to 1.5:1.0, so long as no Default or Event of Default has occurred and
is continuing, upon the Borrower's request (i) all Collateral shall
automatically be released from the Liens hereunder in respect thereof and (ii)
the Administrative Agent shall, as promptly as practicable after receiving such
notice, deliver to the Pledgor the Collateral in its possession and take such
other action, at the Borrower's expense, which the Borrower shall reasonably
request to evidence the release of the Lien and security interest created
hereunder with respect to such Collateral.
8. REMEDIES. In the event that any portion of the Obligations has
been declared or becomes due and payable in accordance with the terms of the
Credit Agreement and such Obligations have not been paid in full, the
Administrative Agent, on behalf of the Lenders, may exercise, in addition to all
other rights and remedies granted in this Pledge Agreement and in any other
instrument or agreement securing, evidencing or relating to the Guarantee
Obligations or Obligations, all rights and remedies of a secured party under the
Code. Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon the Pledgor, any Issuer, or any other Person (all and each
of which demands, defenses, advertisements and notices are hereby waived), may
in such circumstances forthwith collect, receive, appropriate and realize upon
the Collateral, or any part thereof, and/or may forthwith sell, assign, give
option or options to purchase or otherwise dispose of and deliver the Collateral
or any part thereof (or contract to do any of the foregoing),
7
in one or more parcels at public or private sale or sales, in the over-the-
counter market, at any exchange or broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The
Administrative Agent or any Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in the Pledgor, which right or equity is
hereby waived or released. The Administrative Agent shall apply any Proceeds
from time to time held by it and the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred in respect thereof or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys' fees and
disbursements of counsel to the Administrative Agent, to the payment in whole or
in part of the Guarantee Obligations, in such order as the Administrative Agent
may elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the Pledgor. To the
extent permitted by applicable law, the Pledgor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Lender arising
out of the lawful exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition.
9. REGISTRATION RIGHTS; PRIVATE SALES. (a) If the Administrative
Agent shall determine to exercise its right to sell any or all of the Collateral
pursuant to paragraph 9 hereof, and if in the opinion of the Administrative
Agent it is necessary or advisable to have the Collateral, or that portion
thereof to be sold, registered under the provisions of the Securities Act of
1933, as amended (the "SECURITIES ACT"), the Pledgor will cause each Issuer
whose stock or note or membership interest, as the case may be, is to be so
registered to (i) execute and deliver, and cause the directors and officers of
such Issuer or the Pledgor, as the case may be, to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Collateral, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Collateral or that portion thereof to be sold, and (iii) make all amendments
thereto and/or to the related prospectus that, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. The Pledgor agrees to
cause each Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions that the Administrative Agent shall designate
and to make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) that will satisfy the provisions
of Section 11(a) of the Securities Act.
8
(b) The Pledgor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Collateral by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers that will be obliged to agree, among
other things, to acquire such securities for their own account for investment
and not with a view to the distribution or resale thereof. The Pledgor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Collateral for the period of time necessary to permit any Issuer to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if such Issuer would agree to do so.
(c) The Pledgor further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Collateral pursuant to this paragraph 9 valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgor further agrees that a breach of any of the covenants contained in
this paragraph 9 will cause irreparable injury to the Administrative Agent and
the Lenders, that the Administrative Agent and the Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this paragraph 10 shall be specifically enforceable
against the Pledgor, and the Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants.
10. LIMITATION ON DUTIES REGARDING COLLATERAL. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. Neither the Administrative Agent nor any Lender nor their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so
(except to the extent the same constitutes gross negligence or willful
misconduct) or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or otherwise.
11. POWERS COUPLED WITH AN INTEREST. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
12. SEVERABILITY. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9
13. PARAGRAPH HEADINGS. The paragraph headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
14. NO WAIVER; CUMULATIVE REMEDIES. Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
paragraph 15 hereof) be deemed to have waived any right or remedy hereunder. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.
15. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS; GOVERNING LAW.
None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Administrative Agent, PROVIDED that any provision of this
Pledge Agreement may be waived by the Administrative Agent in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Pledge Agreement shall be
binding upon the successors and assigns of the Pledgor and shall inure to the
benefit of the Administrative Agent and the Lenders and their respective
successors and assigns. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
16. NOTICES. Notices by the Administrative Agent may be given by
mail, by telex or by facsimile transmission, addressed or transmitted to the
Issuers at their addresses or transmission numbers set forth in Schedule III
hereto and to the Pledgor at the address or transmission number set forth in
subsection 11.2 of the Credit Agreement. Such notice shall be effective (a) in
the case of mail, three Business Days after deposit in the postal system, first
class postage pre-paid, and (b) in the case of telex or facsimile notices, when
sent, answerback received, addressed. The Pledgor and the Issuers may change
their respective addresses and transmission numbers by written notice to the
Administrative Agent.
17. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUERS. The
Pledgor hereby authorizes and instructs the Issuers to comply with any
instruction received by it from the Administrative Agent in writing that (a)
states that an Event of Default has occurred and is continuing and (b) is
otherwise in accordance with the terms of this Pledge Agreement, without any
other or further instructions from the Pledgor, and the Pledgor agrees that the
Issuers shall be fully protected in so complying.
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18. AUTHORITY OF ADMINISTRATIVE AGENT. The Pledgor acknowledges that
the rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
neither the Pledgor nor the Issuers shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement
to be duly executed and delivered as of the date first above written.
GULFSTREAM AEROSPACE CORPORATION
a Delaware Corporation
By:
----------------------------
Title:
ACKNOWLEDGEMENT AND CONSENT
The undersigned Issuers referred to in the foregoing Holdings Pledge
Agreement hereby acknowledge receipt of a copy thereof and agree to be bound
thereby and to comply with the terms thereof insofar as such terms are
applicable to it. The undersigned Issuers agree to notify the Administrative
Agent promptly in writing of the occurrence of any of the events described in
paragraph 5(a) of the Holdings Pledge Agreement. The undersigned Issuers
further agree that the terms of paragraph 9(c) of the Holdings Pledge Agreement
shall apply to them, MUTATIS MUTANDIS, with respect to all actions that may be
required of them under or pursuant to or arising out of paragraph 9 of the
Holdings Pledge Agreement.
GULFSTREAM DELAWARE CORPORATION
By:
--------------------------------
Title:
SCHEDULE I
TO HOLDINGS
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK (DOMESTIC SUBSIDIARIES)
Percentage of
Outstanding
Stock Total No. of Number of Shares Owned
Class of Certificate Outstanding Shares Owned by
Issuer Stock No. Shares by the Pledgor the Pledgor
------ -------- ----------- ------------ -------------- -------------
SCHEDULE II
TO HOLDINGS
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK (FOREIGN SUBSIDIARIES)
Percentage of
Outstanding
Stock Total No. of Number of Shares Owned
Class of Certificate Outstanding Shares Owned by
Issuer Stock No. Shares by the Pledgor the Pledgor
------ -------- ----------- ------------ -------------- -------------
SCHEDULE III
TO HOLDINGS
PLEDGE AGREEMENT
ADDRESSES OF ISSUERS