Amended and Restated
CREDIT AGREEMENT (*)
Among
▇▇▇▇▇▇ LEASE FINANCE CORPORATION
▇▇▇▇▇▇ AERONAUTICAL SERVICES, INC.
and
CERTAIN BANKING INSTITUTIONS NAMED HEREIN
With
FIRST UNION NATIONAL BANK
(successor by merger to CoreStates Bank, N.A.)
As Co-Arranger and Administrative Agent
BANC OF AMERICA SECURITIES LLC
(formerly NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC)
As Co-Arranger and Syndication Agent
and
BANK OF AMERICA, N.A.
(formerly NationsBank, N.A.)
As Appraisal Agent
As of February 10, 2000
*Portions of the material in this Exhibit have been redacted pursuant to a
request for confidential treatment and the redacted material has been filed
separately with the Commission. An asterisk has been placed in the precise
places in this Agreement where we have redacted information and the asterisk
is keyed to a legend which states that the material has been omitted pursuant
to a request for confidential treatment.
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated as of February 10,
2000 (the "Agreement"), is entered into by and among ▇▇▇▇▇▇ LEASE FINANCE
CORPORATION, a Delaware corporation (successor by merger to ▇▇▇▇▇▇ Lease Finance
Corporation, a California corporation) ("▇▇▇▇▇▇"), ▇▇▇▇▇▇ AERONAUTICAL SERVICES,
INC., a California corporation ("WASI" and, together with ▇▇▇▇▇▇, the
"Borrowers" and each individually a "Borrower"), the banking institutions
signatories hereto and named in Exhibit A attached hereto and such other
institutions that hereafter become a "Bank" pursuant to Section 11.4 hereof
(collectively the "Banks" and individually a "Bank"), FIRST UNION NATIONAL BANK,
a national banking association, as Co-Arranger and as Administrative Agent for
the Banks under this Agreement ("First Union," which shall mean in its capacity
as administrative agent unless specifically stated otherwise), BANC OF AMERICA
SECURITIES LLC, (formerly NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC) as Co-Arranger
and as Syndication Agent ("BAS"), and BANK OF AMERICA, N.A., (formerly
NationsBank, N.A.) a national banking association, as Appraisal Agent ("Bank of
America"). The Administrative Agent, the Syndication Agent and the Appraisal
Agent are collectively the "Agents" and each is individually an "Agent."
Effective as of the Effective Date (as hereinafter defined), this Agreement
amends and restates in its entirety the Amended and Restated Credit Agreement,
dated September 30, 1998, between ▇▇▇▇▇▇, ▇▇▇▇, the Banks, First Union, BAS and
Bank of America, as amended through the date hereof.
PRELIMINARY STATEMENT
WHEREAS, the Borrowers desire to have available to them a revolving
credit facility (the "Credit Facility") which will be used for the purchase or
refinance of Equipment (defined below), the majority of which will be held for
sale or for lease to unaffiliated persons, said Equipment and related Leases
(defined hereafter) to constitute part of the Collateral (defined hereafter) and
for working capital and general corporate purposes.
WHEREAS, the Banks are willing to establish such Credit Facility and
make loans to the Borrowers under the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and promises
hereinafter set forth and intending to be legally bound hereby, the parties
hereto agree as follows:
SECTION 1.
CERTAIN DEFINITIONS
1.1 Definitions.
"Acceptable Manufacturer" shall mean: (i) in the case of Engines, CFM
International, General Electric, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, Rolls Royce, and International
Aero Engines; (ii) in the case of commercial Aircraft, Boeing, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, and Airbus; and (iii) in the case of turbo prop Aircraft, de Havilland.
"Adjusted LIBO Rate" shall mean, for any Interest Period, the rate per
annum (rounded upwards, if necessary to the next 1/16 of 1%) determined pursuant
to the following formula:
Adjusted LIBO Rate = LIBO Rate
1 -Reserve Percentage
"Adjusted Tangible Net Worth" shall mean Tangible Net Worth of the
▇▇▇▇▇▇ Companies, less any stockholder's equity in any Unrestricted
Subsidiaries.
"Administrative Agent" shall have the meaning set forth in the Preamble
to this Agreement, and shall also mean and include any successor Administrative
Agent appointed pursuant to Section 10.6 hereto.
"Advance Rate" shall mean that percentage of the Net Book Value of an
item of Eligible Equipment determined by reference to the type of Equipment as
described below:
Eligible Equipment Advance Rate*
------------------------------------------------------------ ---------------------------------------------------
Engines - Stage III Jet __%
Parts Packages __%
Parts __%
During the Fiscal Quarter Ending: __%
March 31, 2000 __%
June 30, 2000 __%
September 30, 2000 __%
December 31, 2000 __%
Thereafter __%
Aircraft - Stage III Jet and Turbo Prop __%
Engines - Stage III Turbo Prop __%
Engines - Stage II Jet __%
--------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately with
the Commission.
2
Aircraft - Stage II Jet __%
The applicable Advance Rate for Eligible Engines, Eligible Parts
Packages and Eligible Aircraft (i) will be reduced by ___ percentage points if
such Equipment is not, as of the date of determination, subject to a Lease (ii)
will be reduced by an additional ___ percentage points (for an aggregate,
together with the reduction referred to in (i) above, of ___ percentage points)
if such Equipment has not been subject to a Lease for 60 consecutive days, and
(iii) which are Stage III compliant will be reduced by an additional forty
percentage points (for an aggregate, together with the reductions referred to in
(i) and (ii) above, of ___ percentage points) if such Equipment has not been
subject to a Lease for 180 consecutive days; provided, however, that with
respect to each of (i), (ii) and (iii) above, the Advance Rates listed above
will be reinstated if any such Eligible Engine, Eligible Parts Package or
Eligible Aircraft is leased or re-leased, as applicable. Eligible Engines,
Eligible Parts Packages, and Eligible Aircraft (x) which are not Stage III
compliant and which have not been subject to a Lease for 180 consecutive days
will be excluded from the Borrowing Base, and (y) which are Stage III compliant
and which have been not subject to a Lease for 360 consecutive days will be
excluded from the Borrowing Base; provided, however, that with respect to each
of (x) and (y) above, the Advance Rates listed above will be reinstated if any
such Eligible Engine, Eligible Parts Package or Eligible Aircraft is leased or
re-leased, as applicable.*
The Advance Rate applicable to Eligible Parts will decrease by ___
percentage points ne year after such Parts were acquired by a Borrower. Two
years after Eligible Parts were acquired by a Borrower, such Eligible Parts will
be excluded from the Borrowing Base.*
"Affiliate" shall mean any Person: (i) which directly or indirectly
controls, or is controlled by, or is under common control with either Borrower;
(ii) which directly or indirectly beneficially owns or holds ten percent (10%)
or more of any class of voting stock of either Borrower; or (iii) ten percent
(10%) or more of whose voting stock of which is directly or indirectly
beneficially owned or held by either Borrower. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Aggregate Revolving Loan Commitment" shall have the meaning set forth
in Section 2.1(a).
"Agreement" shall mean this Amended and Restated Credit Agreement, as
amended, supplemented, modified, replaced, substituted for or restated from time
to time and all exhibits and schedules attached hereto.
--------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately with
the Commission.
3
"Aircraft" shall mean an airframe together with the engines related
thereto, owned by a Borrower or an Owner Trustee (acting pursuant to a Trust
Agreement) designed for controlled travel through the air under its own power.
Aircraft shall not include helicopters.
"Applicable Margin." With respect to Base Rate Loans and LIBO Rate
Loans, the term
"Applicable Margin" shall have the meaning set forth on Exhibit B
hereto.
"Appraisal Agent" shall have the meaning set forth in the Preamble to
this Agreement, and shall also mean and include any successor Appraisal Agent
appointed pursuant to Section 10.6 hereto.
"Base Rate" shall mean the higher of (i) the Prime Rate, and (ii) the
Federal Funds Rate plus 1/2 of 1% per annum. Any change in such interest rate
shall be effective on the date of such change.
"Base Rate Loan" shall mean a Loan, or any portion thereof, made at the
Base Rate pursuant to a Request for Advance made under Section 2.4 herein or as
otherwise provided in Section 2.10 or in any other provision hereof or in any
other Loan Document.
"Beneficial Interest Pledge Agreement" shall mean the Beneficial
Interest Pledge and Security Agreement in form and substance attached hereto as
Exhibit L.
"Borrowing Base" shall mean the amount derived by multiplying the Net
Book Value of each category of Eligible Equipment by its applicable Advance
Rate. If an item of Eligible Equipment is subject to a Lease, the item of
Equipment will only be included in the Borrowing Base if such Lease is an
Eligible Lease. The Borrowing Base shall also be subject to the following
concentration limits (excluding Eligible Parts):
(i) No more than ___% of the Net Book Value of the Eligible Engines,
Eligible Parts Packages and Eligible Aircraft subject to Leases included in the
Borrowing Base shall, in the aggregate, involve Leases which mature within any
12 month period;*
(ii) No more than ___% of the Net Book Value of the Eligible Engines,
Eligible Parts Packages and Eligible Aircraft included in the Borrowing Base
shall, in the aggregate, either (a) not be the subject of a Lease or (b) be the
subject of a Lease with respect to which an event of default (as defined in such
Lease) shall exist;*
(iii) No more than the lesser of (a) $________; or (b) ___% of the Net
Book Value of the Eligible Engines, Eligible Parts Packages and Eligible
Aircraft included in the Borrowing Base shall, in the aggregate, be to a single
lessee;*
4
(iv) No more than ___% of the Net Book Value of the Eligible Engines,
Eligible Parts Packages and Eligible Aircraft included in the Borrowing Base
shall be represented by a single Eligible Engine, Eligible Parts Package or
Eligible Aircraft;*
(v) No more than ___% of the Net Book Value of the Eligible Engines,
Eligible Parts Packages and Eligible Aircraft included in the Borrowing Base
shall, in the aggregate, be used on or be composed of turbo prop Aircraft;*
(vi) No more than ___% of the Net Book Value of the Eligible Engines,
Eligible Parts Packages and Eligible Aircraft included in the Borrowing Base
shall, in the aggregate, be used on Stage II Aircraft or be Stage II in nature;*
(vii) No more than $________ of Revolving Loans (not to exceed 20% of
the Net Book Value of the Eligible Engines, Eligible Parts, Eligible Parts
Packages and Eligible Aircraft) outstanding at any time and from time to time
can be supported by Eligible Aircraft included in the Borrowing Base;*
(viii) No more than $________ of Revolving Loans (not to exceed ___% of
the Net Book Value of the Eligible Engines, Eligible Parts, Eligible Parts
Packages and Eligible Aircraft) outstanding at any time and from time to time
can be supported by Eligible Parts purchased for resale that are included in the
Borrowing Base;*
(ix) No more than $________ of Revolving Loans (not to exceed ___% of
the Net Book Value of the Eligible Engines, Eligible Parts, Eligible Parts
Packages and Eligible Aircraft) outstanding at any time and from time to time
can be supported by Eligible Parts Packages included in the Borrowing Base; and*
(x) No more than ___% of the Net Book Value of the Eligible Engines
subject to Leases included in the Borrowing Base shall, in the aggregate,
involve Leases with lessees domiciled or principally located in Nonrecognition
of Rights Jurisdictions provided, however, that any concentration in excess of
___% solely due to the Leases set forth in Schedule 3 hereto or due to the
removal by the Majority Banks of an airline listed in Schedule 4 hereto shall be
included in the Borrowing Base, but, in no event, shall the Borrowers be
entitled to include in the Borrowing Base additional Leases with Lessees
domiciled or principally located in Nonrecognition of Rights Jurisdictions
during any period in which this proviso shall be applicable; and*
(xi) No more than the percentage of the Net Book Value of the Eligible
Engines, Eligible Parts Packages and Eligible Aircraft subject to Leases
included in the Borrowing Base set forth opposite the respective geographic
regions set forth in Schedule 5 attached hereto shall, in the aggregate, be with
lessees domiciled or principally located in such geographic regions.
--------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately with
the Commission.
5
Notwithstanding the foregoing, if (a) any item of Equipment or any
Lease of any item of Equipment shall fail to fully meet the Eligibility Criteria
for inclusion in the Borrowing Base or (b) the Administrative Agent shall not
receive a perfected, first priority security interest in an item of Equipment
(as and to the extent contemplated in Section 9.1) subject to Permitted Liens,
the Administrative Agent, in its sole discretion, may nevertheless include such
Equipment or Lease in the Borrowing Base, provided that at no time will the
aggregate amount of the Borrowing Base comprised of such non-eligible Equipment,
non-eligible Leases and such Equipment regarding which the security interest is
not fully perfected exceed $________. Promptly following a determination by the
Administrative Agent to include in the Borrowing Base such non-eligible
Equipment, non-eligible Leases or such Equipment regarding which the security
interest is not fully perfected (which determination may be made prospectively),
the Administrative Agent will notify the Banks of its decision and the basis
therefor. If the Majority Banks confirm such determination in writing, such
Equipment or Lease shall be deemed to be "Eligible Equipment" or an "Eligible
Lease" and will no longer count towards the $________ limit for non-eligible
Equipment, non-eligible Leases and Equipment regarding which the security
interest is not fully perfected. If Banks sufficient to constitute the Majority
Banks do not expressly approve such determination in writing within ten days
from delivery of the notice, such determination by the. Administrative Agent
will be deemed not approved by the Majority Banks, unless or until otherwise
approved by the Majority Banks in writing.*
"Borrowing Base Certificate" shall mean a certificate in substantially
the form attached hereto as Exhibit E hereto which shall be signed by the chief
financial officer, chief administrative officer, chief executive officer,
treasurer or controller of the Borrowers.
"Business Day" shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks in Philadelphia or San Francisco are
authorized or required to close under the laws of either the Commonwealth of
Pennsylvania or the State of California and, if the applicable day relates to a
LIBO Rate Loan, or notice with respect to a LIBO Rate Loan, a day on which
dealings in Dollar deposits are also carried on in the London interbank market
and banks are open for business in London ("London Business Day").
"Capitalized Lease" shall mean all lease obligations of any Person for
any property (whether real, personal or mixed) which have been or should be
capitalized on the books of the lessee in accordance with Generally Accepted
Accounting Principles.
"Capitalized Lease Obligations" with respect to any Person, shall mean
the aggregate amount which, in accordance with GAAP, is required to be reported
as a liability on the balance sheet of such Person at such time in respect of
such Person's interest as lessee under a Capitalized Lease.
--------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately with
the Commission.
6
"Change of Control" shall mean, with respect to either Borrower, any
action shall occur or set of circumstances exist that would result in any Person
or group (other than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, his trusts, family limited
partnerships or heirs) beneficially owning (as defined in Rule 13(d)-3 of the
Securities and Exchange Act of 1934, as amended), directly or indirectly, an
amount of the outstanding capital stock of such Borrower entitling such Person
or group to 30% or more of the voting power of all the outstanding capital stock
of such Borrower. The percentage of voting power shall be determined based on
the number of votes a holder of capital stock can cast in the election of
directors, compared to the total number of votes that all shareholders can cast
in such election.
"Closing Date" shall mean September 30, 1998.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and all rules and regulations with respect thereto in effect from
time to time.
"Collateral" shall mean, collectively, the "Collateral" (as such term
is defined in the Security Agreement), the "Collateral" (as such term is defined
in each Owner Trustee Mortgage executed, delivered and outstanding from time to
time) and the "Collateral" (as such term is defined in each Beneficial Interest
Pledge Agreement executed, delivered and outstanding from time to time), which
shall at all times include, without limitation, all Equipment and Leases.
"Compliance Certificate" shall mean a certificate in substantially the
form attached hereto as Exhibit G which shall be signed by the chief financial
officer, chief administrative officer, chief executive officer, treasurer or
controller of ▇▇▇▇▇▇.
"Conversion Date" shall mean, with respect to any Term Loan, the date
on which it was converted from a Revolving Loan to a Term Loan, which date may
not be later than the Revolving Loan Termination Date.
"Debt" shall mean, as to any Person at any time (without duplication)
and, for the Borrowers, determined on a consolidated basis: (i) all obligations
of such Person for borrowed money; (ii) all obligations of such Person evidenced
by bonds, notes, debentures, or other similar instruments; (iii) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable of such Person arising in the ordinary course of
business which are not past due by more than ninety days unless such trade
accounts payable are being contested in good faith by appropriate proceedings;
(iv) all Capitalized Lease Obligations of such Person; (v) all obligations of
such Person under guaranties, letters of credit, endorsements (other than for
collection or deposit in the ordinary course of business), assumptions or other
contingent obligations, in respect of, or to purchase or otherwise acquire, any
obligation or indebtedness of any other Person, or any other obligation,
contingent or otherwise, of such Person directly or indirectly protecting the
holder of any obligation or indebtedness of any other Person, contingent or
otherwise, against loss (whether by partnership arrangements, agreements to
keep-well, to purchase assets, goods, securities, or services, to take-or-pay or
otherwise); (vi) all obligations secured by a Lien existing on property owned by
such Person, whether or not the obligations secured thereby have been assumed by
such Person or are non-recourse to the credit of such Person; (vii) all
reimbursement obligations of such Person (whether contingent or otherwise) in
respect of letters of credit, bankers' acceptances, surety or other bonds and
similar instruments;
7
(viii) the net present value of Operating Leases for engines, aircraft and parts
packages, using a 10% discount rate; and (ix) all obligations with respect to
deposits or maintenance reserves to the extent not supported by cash reserved
specifically therefor.
"Debt Service" shall mean actual payments of principal on Debt and
Capitalized Lease Obligations (including any Debt or Capitalized Lease
Obligations paid from the sale of Equipment during the period), plus interest
expense incurred during the period.
"Default Rate" on any Loan shall mean two percent (2.0%) per annum
above the interest rate then applicable to each Loan or portion thereof.
"Dollars" shall mean the lawful currency of the United States of
America.
"EBIT" shall mean the sum of (i) Net Income less any extraordinary gain
or loss included in the calculation thereof, plus (ii) amounts deducted for
interest expense and income taxes.
"Effective Date" shall mean the date on which this Amended and Restated
Credit Agreement shall become effective as determined in accordance with Section
4.2.
"Eligibility Criteria" shall mean the applicable criteria set forth
below to be used to determine whether Equipment and Leases are eligible for
inclusion in the Borrowing Base.
The Eligibility Criteria for Aircraft are as follows: ________*
The Eligibility Criteria for Engines are as follows: ________*
The Eligibility Criteria for Parts are as follows: ________*
The Eligibility Criteria for Parts Packages are as follows: ________*
The Eligibility Criteria for Leases are as follows: __________*
"Eligible Aircraft" shall mean Aircraft which meet all of the
Eligibility Criteria for Aircraft.
"Eligible Engines" shall mean Engines which meet all of the Eligibility
Criteria for Engines.
"Eligible Equipment" shall mean Equipment which meets all of the
Eligibility Criteria applicable thereto.
--------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately with
the Commission.
8
"Eligible Lease" shall mean a Lease of Equipment to a Person
unaffiliated with either Borrower (other than a Lease to WLFC (Ireland) Limited
pursuant to clause (viii) below) in which: __________*
"Eligible Parts" shall mean Parts held by a Borrower for resale which
meet all of the Eligibility Criteria for Parts.
"Eligible Parts Packages" shall mean Parts Packages which meet all of
the Eligibility Criteria for Parts Packages.
"Engine" shall mean any engine owned by a Borrower or an Owner Trustee
(acting pursuant to a Trust Agreement) designed or suitable for use to propel an
Aircraft.
"Engine and Aircraft Advance Amount" shall mean that amount of the
Borrowing Base composed of Eligible Aircraft, Eligible Engines, and Eligible
Parts Packages, calculated as of the Conversion Date; provided, however, that no
Aircraft, Engines or Parts owned by WASI and held for resale shall be included
in the calculation of the Engine and Aircraft Advance Amount.
"Environmental Control Statutes" shall mean each and every applicable
federal, state, county or municipal environmental statute, ordinance, rule,
regulation, order, directive or requirement, together with all successor
statutes, ordinances, rules, regulations, orders, directives or requirements, of
any Governmental Authority, including without limitation laws in any way related
to Hazardous Substances.
"Equipment" shall mean all Engines, Aircraft, Parts and Parts Packages,
whether or not such items are subject to a Lease.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as either Borrower within the meaning of
Section 414(b) of the Code, or any trade or business which is under common
control with either Borrower within the meaning of Section 414(c) of the Code.
"Event of Default" shall have the meaning set forth in Section 8.1.
"Excepted Collateral" shall have the meaning set forth in Section
8.1(i).
"Existing Debt" shall mean the existing Debt (excluding guarantees) of
the Borrowers or any of their Restricted Subsidiaries to certain Persons
described on Schedule 1 to this Agreement.
--------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately with
the Commission.
9
"Existing Lease Transactions" shall mean those Leases of any item of
Equipment, which Leases shall, as of the Effective Date, be included in the
Borrowing Base.
"Facility Fee" shall mean an amendment/modification fee payable by the
Borrowers pursuant to Section 2.5(b).
"Facility Termination Date" shall mean the date upon which the
Borrowers have repaid all principal, interest, fees and other expenses related
to all Revolving Loans and all, if any, Term Loans, and all other Obligations
have been satisfied in full.
"Fair Market Value" shall mean the fair market value of an item of
Equipment as determined by an appraisal made by an appraiser arranged by the
Appraisal Agent under the terms of this Agreement.
"FAR" means the Federal Aviation Regulations issued by the Federal
Aviation Administration as in effect from time to time.
"Federal Funds Rate" shall mean the daily rate of interest announced
from time to time by the Board of Governors of the Federal Reserve System in
publication H.15 as the "Federal Funds Rate," or if such publication is
unavailable, such rate as is available to the Administrative Agent on such day.
"First Amendment to Security Agreement" shall mean the First Amendment
to Security Agreement in the form and substance attached hereto as Exhibit Q.
"First Amendment to Subsidiary Guaranty" shall mean the First Amendment
to Subsidiary Guaranty in the form and substance attached hereto as Exhibit P.
"Fiscal Quarter" shall mean a fiscal quarter of the Borrowers, which
shall be any quarterly period ending on March 31, June 30, September 30 or
December 31 of any year.
"Fiscal Year" shall mean a fiscal year of the Borrowers, which shall
end on the last day of December.
"Fronting Bank" shall mean the Administrative Agent.
"Generally Accepted Accounting Principles" or "GAAP" shall mean
generally accepted accounting principles as in effect from time to time in the
United States, consistently applied.
"Governmental Authority" shall mean the federal, state, county or
municipal government, or any department, agency, bureau or other similar type
body obtaining authority therefrom or created pursuant to any laws, including
without limitation Environmental Control Statutes.
"Guarantors" shall mean all present and future Restricted Subsidiaries.
"Guaranty" shall mean (i) the Subsidiary Guaranty dated as of September
30, 1998 executed by each Guarantor, as amended by the First Amendment to
Subsidiary Guaranty and
10
(ii) any Subsidiary Guaranty in the form and substance attached hereto as
Exhibit J to be executed by a Guarantor.
"Hazardous Substances" shall mean without limitation, any regulated
substance, toxic substance, hazardous substance, hazardous waste, pollution,
pollutant or contaminant, as defined or referred to in the Resource Conservation
and Recovery Act, as amended, 15 U.S.C., ss. 2601 et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act, 33 U.S.C. ss. 1251 et
seq.; the federal underground storage tank law, Subtitle I of the Resource
Conservation and Recovery Act, as amended, P.L. 98-616, 42 U.S.C. ss. 6901 et
seq.; together with any amendments thereto, regulations promulgated thereunder
and all substitutions thereof, as well as words of similar purport or meaning
referred to in any other federal, state, county or municipal environmental
statute, ordinance, rule or regulation.
"Indebtedness for Borrowed Money" shall mean (i) all indebtedness,
liabilities, and obligations, now existing or hereafter arising, for money
borrowed by the Borrowers or their Restricted Subsidiaries, whether or not
evidenced by any note, indenture, or agreement (including, without limitation,
the Notes and any indebtedness for money borrowed from an Affiliate) and (ii)
all indebtedness of others for money borrowed (including indebtedness of an
Affiliate) with respect to which the Borrowers or their Restricted Subsidiaries
have become liable by way of a guarantee or indemnity.
"Intangible Assets" shall mean all assets which would be classified as
intangible assets under GAAP consistently applied, including, without
limitation, goodwill (whether representing the excess of cost over book value of
assets acquired or otherwise), patents, trademarks, trade names, copyrights,
franchises, and deferred charges (including, without limitation, unamortized
debt discount and expense, organization costs, and research and development
costs). For.purposes of this definition, prepayments of taxes, license fees and
other expenses shall not be deemed Intangible Assets.
"Interest Coverage Ratio" shall mean the ratio of EBIT of the ▇▇▇▇▇▇
Companies plus rent expenses of the ▇▇▇▇▇▇ Companies to interest expense of the
▇▇▇▇▇▇ Companies plus rent expenses of the ▇▇▇▇▇▇ Companies.
"Interest Period" shall mean a period commencing on the date of a LIBO
Rate Loan or with respect to a LIBO Rate Loan being renewed, the last day of the
preceding Interest Period and ending one, two, three or six months thereafter,
as requested by the Borrowers at the time of their Request for Advance; provided
also that (i) an Interest Period which would otherwise expire on a day which is
not a London Business Day shall be extended to the next succeeding London
Business Day unless such London Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding London Business
Day, (ii) any Interest Period which begins on the last London Business 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, subject to the
next succeeding clause, end on the last London Business Day of a calendar month;
and (iii) no Interest Period shall end later than the Revolving Loan Termination
Date, provided, however, that (a) to the extent Term Loans are then in
existence, the Interest Period with respect to any Term Loan shall end no later
than the applicable Term Loan Maturity Date; and (b) to the extent Revolving
Loans are being converted into Term Loans on
11
the Revolving Loan Termination Date, any Term Loans so created may, at the
Borrowers' option, continue to utilize the existing Interest Period of the
Revolving Loan so converted.
"Investment" in any Person shall mean, without duplication, (i) the
acquisition (whether for cash, property, services or securities or otherwise) of
capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities of such Person; (ii) any deposit with, or advance,
loan or other extension of credit to, such Person (other than any such deposit,
advance, loan or extension of credit having a term not exceeding 90 days in the
case of unaffiliated Persons and 120 days in the case of Affiliates representing
the purchase price of inventory or supplies purchased in the ordinary course of
business) or guarantee or assumption of, or other contingent obligation with
respect to, Indebtedness for Borrowed Money or other liability of such Person;
(iii) any transfer or contribution of assets to an Unrestricted Subsidiary to
the extent that the net book value of such assets is not paid in full at the
time of transfer; and (iv) any amount that may, pursuant to the terms of such
investment, be required to be paid, deposited, advanced, lent or extended to or
guaranteed or assumed on behalf of such Person.
"Lease" shall mean a written operating lease agreement entered into
between either of the Borrowers or an Owner Trustee (acting pursuant to a Trust
Agreement), as lessor, and a third party (including WLFC (Ireland) Limited), as
lessee, pursuant to which a Borrower or such Owner Trustee, as applicable,
leases to the third party for a fixed period of time one or more items of
Equipment..
"Leverage Ratio" shall mean the ratio of the Debt of the ▇▇▇▇▇▇
Companies (less any nonrecourse debt of the Unrestricted Subsidiaries) to their
Adjusted Tangible Net Worth calculated based on the most recent financial
statements furnished to the Banks in accordance herewith.
"LIBO Rate" shall mean the arithmetic average of the rates of interest
per annum (rounded upwards, if necessary to the next 1/16 of 1%) at which the
Administrative Agent, individually, is offered deposits of United States Dollars
by leading banks in the interbank eurodollar or eurocurrency market on or about
eleven o'clock (11:00) a.m. London time two London Business Days prior to the
commencement of the requested Interest Period in an amount substantially equal
to the outstanding principal amount of the LIBO Rate Loan requested for a
maturity of comparable duration to the Interest Period.
"LIBO Rate Loan" shall mean a Loan bearing interest at Adjusted LIBO
Rate plus the Applicable Margin.
"Lien" shall mean any lien, mortgage, security interest, chattel
mortgage, pledge or other encumbrance (statutory or otherwise) of any kind
securing satisfaction of an obligation, including any agreement to give any of
the foregoing, any conditional sales or other title retention agreement, any
lease in the nature thereof, and the filing of or the agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction or
similar evidence of any encumbrance, whether within or outside the United
States.
"Loan" or "Loans" shall mean the Revolving Loan or Loans or the Term
Loan or Loans.
12
"Loan Documents" shall mean this Agreement, the Notes, the Mortgage,
the Security Agreement, each Guaranty, each Owner Trustee Mortgage, each Owner
Trustee Guarantee, each Beneficial Interest Pledge Agreement, each WLFC
(Ireland) Document and all other documents directly related or incidental to
said documents, the Loans, the Standby Letter of Credit or the Collateral.
"Majority Banks" shall mean the Banks holding Loans and Revolving Loan
Commitments representing more than 50% of the aggregate amount of Loans and
Revolving Loan Commitments under this Credit Facility.
"Material Adverse Change" shall mean any event or condition which, in
the reasonable determination of the Majority Banks, would result in a material
adverse change in the financial condition, business, properties or profits of
the Borrowers on a combined basis or which gives reasonable grounds to conclude
that the Borrowers on a combined basis would likely not be able to perform or
observe (in the normal course) their obligations under the Loan Documents to
which they are a party, including but not limited to the Notes, provided, that
changes in ▇▇▇▇▇▇' financial conditions occurring during the Fiscal Quarter
ending September 30, 1999 and ▇▇▇▇▇▇▇▇▇.▇▇ the Banks and the Agents prior to the
Effective Date shall be deemed not to have a Material Adverse Change on ▇▇▇▇▇▇.
"Material Adverse Effect" shall mean a material adverse effect on (i)
the financial condition, business, properties, or profits of the Borrowers on a
combined basis, (ii) the ability of either ▇▇▇▇▇▇ or WASI to perform its
obligations under this Agreement, the Notes and the other Loan Documents, or
(iii) the legality, validity or enforceability of this Agreement or the Notes or
the rights and remedies of the holders of the Loans. Each Borrower acknowledges
that it has, and throughout the term of this Credit Facility will have,
financial information concerning the other, such as will be sufficient to allow
it to properly evaluate a Material Adverse Effect.
"Monthly Lease Portfolio and Receivables Report" shall mean a report in
summary form of the status of accounts receivable in respect of all Leases which
are part of the Collateral in form and substance reasonably satisfactory to the
Administrative Agent.
"Mortgage" shall mean that certain Amended and Restated Mortgage and
Security Agreement made by the Borrower in favor of the Administrative Agent
dated as of January __, 2000 as amended and supplemented from time to time.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
ERISA Section 4001(a)(3), which covers employees of the Borrowers or any ERISA
Affiliate.
"Net Book Value" of an item of Equipment shall be calculated as the
lesser of: (i) the cost to Borrower of such item of Equipment; or (ii) such item
of Equipment's Fair Market Value. In any event, the Net Book Value will be
reduced utilizing depreciation methods consistent with current practice and
Generally Accepted Accounting Principles.
"Net Income" shall mean net income of the ▇▇▇▇▇▇ Companies after taxes,
determined in accordance with GAAP.
13
"Net Worth" shall mean, at any particular time, all amounts, in
conformity with GAAP, that would be included as stockholder's equity on a
consolidated balance sheet of the ▇▇▇▇▇▇ Companies.
"Nonrecognition of Rights Jurisdictions" shall mean, in connection with
each Lease involving a lessee (or, in the case of a Lease to WLFC (Ireland)
Limited, involving a sublessee) domiciled or principally located in a non-U.S.
jurisdiction, any non-U.S. jurisdiction of such domicile or location unless (a)
the Borrowers shall have obtained a legal opinion in form and substance
reasonably satisfactory to the Administrative Agent from local counsel in such
jurisdiction (a copy of which shall have been provided to the Administrative
Agent) to the effect that under and in accordance with applicable local law that
an aircraft engine, upon its installation on an aircraft, should remain the
property of the Owner Trustee and not become an accession to such aircraft
(thereby vesting a superior right to title in the owner of such aircraft) or (b)
the.Borrowers (or the applicable Owner Trustee) and the Administrative Agent
shall have become parties to or otherwise obtained the benefit of recognition of
rights arrangements sufficient to protect their respective interests as
reasonably determined by the Administrative Agent or (c) the lessee (or, in the
case of a Lease to WLFC (Ireland) Limited, the sublessee) under such Lease (or
sublease) is an airline listed in Schedule 4 hereto; provided, however, that an
airline may be added or removed from Schedule 4 upon the determination of the
Majority Banks (such determination to be made in their sole discretion), with
such addition or removal to become effective for all purposes of this agreement
upon written notice to the Borrowers. Upon the removal of an airline from
Schedule 4 hereto, any existing Lease (or sublease) with such airline shall be
applied to paragraph (x) of the definition of Borrowing Base.
"Note" or "Notes" shall mean Revolving Note or Notes or Term Note or
Notes.
"Obligations" shall mean all now existing or hereafter arising debts,
obligations, covenants, and duties of payment or performance of every kind,
matured or unmatured, direct or contingent, owing, arising, due, or payable to
the Banks or the Administrative Agent by either Borrower or any Owner Trustee
arising out of this Agreement or any other Loan Document, including, without
limitation, all obligations to repay principal of and interest on the Loans, all
obligations related to Standby Letters of Credit, and all obligations related to
any interest rate swap agreement, interest rate cap agreement, interest collar
agreement, interest rate hedging agreement, interest rate floor agreement or
other similar agreement or arrangement related to the foregoing, and to pay
interest, fees, costs, charges, expenses, professional fees, and all sums
chargeable to either Borrower or any Owner Trustee or for which either Borrower
or any Owner Trustee is liable as indemnitor under the Loan Documents, whether
or not evidenced by any note or other instrument.
"Operating Lease" shall mean, with respect to any Person, the aggregate
amount which, in accordance with GAAP, is not required to be reported as a
liability on the balance sheet of such Person at such time in respect of such
Person's interest as lessee under an Operating Lease.
"Other Indebtedness" shall mean Indebtedness for Borrowed Money (i)
with a final maturity not less than the final maturity of this Credit Facility;
(ii) with an average life no less than the remaining average life of this Credit
Facility; (iii) with terms, covenants and conditions no more restrictive than
those in this Agreement; and (iv) with respect to which the initial
14
advance rates on the assets financed with such Indebtedness for Borrowed Money
are not less than those under this Credit Facility.
"Owner Trustee" shall mean a bank or trust company reasonably
satisfactory to the Administrative Agent acting as trustee under a Trust
Agreement.
"Owner Trustee Guarantee" shall mean the Guarantee in the form and
substance attached hereto as Exhibit M. "Owner Trustee Mortgage" shall mean the
Mortgage and Security Agreement in the form and substance attached hereto as
Exhibit N.
"Parts" shall mean components of an Aircraft, an Engine or any systems
within an Aircraft or Engine that have either been removed from an Aircraft or
Engine or have not yet been incorporated into an Aircraft or Engine.
"Parts Packages" shall mean a grouping of Parts owned by a Borrower or
an Owner Trustee (acting pursuant to a Trust Agreement) which are to be sold or
leased by a Borrower or an Owner Trustee (acting pursuant to a Trust Agreement)
to a third party.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" shall mean, at any time, any Plan (including a
Multiemployer Plan), the funding requirements of which (under Section 302 of
ERISA or Section 412 of the Code) are, or at any time within the six years
immediately preceding the time in question, were in whole or in part, the
responsibility of ▇▇▇▇▇▇ or WASI or any ERISA Affiliate of ▇▇▇▇▇▇ or WASI.
"Permitted Liens" shall mean (i) any Liens for current taxes,
assessments and other governmental charges not yet due and payable or being
contested in good faith by Borrowers (or by a lessee) by appropriate proceedings
and for which adequate reserves have been established by Borrowers as reflected
in Borrowers' financial statements; (ii) any mechanic's, materialman's,
carrier's, warehousemen's or similar Liens for sums not yet due or being
contested in good faith by Borrowers (or by a lessee) by appropriate proceedings
and for which adequate reserves have been established by Borrowers as reflected
in Borrowers' financial statements; (iii) easements, rights-of-way, restrictions
and other similar encumbrances on the real property or fixtures of Borrowers
incurred in the ordinary course of business which individually or in the
aggregate are not substantial in amount and which do not in any case materially
detract from the value or marketability of the property subject thereto or
interfere with the ordinary conduct of the business of Borrowers; (iv) Liens
(other than Liens imposed on any property of Borrowers pursuant to ERISA or
Section 412 of the Code) incurred or deposits made in the ordinary course of
business, including Liens in connection with workers' compensation, unemployment
insurance and other types of social security and Liens to secure performance of
tenders, statutory obligations, surety and appeal bonds (in the case of appeal
bonds such Lien shall not secure any reimbursement or indemnity obligation in an
amount greater than $2,500,000), bids, leases that are not Capitalized Leases,
performance bonds, sales contracts and other similar obligations, in each case,
not incurred in connection with the obtaining of credit or the payment of a
deferred purchase price, and which do not, in the aggregate, result in a
Material Adverse Effect; (v) Liens, if any, existing on the Closing Date and
listed in Schedule 1 hereto; (vi) Liens in favor of First Union, as
Administrative Agent, in the Collateral as contemplated by
15
this Agreement and the other Loan Documents; (vii) the rights of a lessee (or,
in the case of a Lease that provides for subleasing, a sublessee) to utilize the
Collateral pursuant to the terms of a Lease or sublease; (viii) Liens securing
Other Indebtedness (but such Liens shall be limited to the assets of the
Borrowers being.financed with the proceeds of such Other Indebtedness); (ix)
purchase money Liens securing Debt not to exceed $500,000 in the aggregate, as
permitted under Section 6.9(c) hereto; (x) Liens against the Shares (as defined
in the Security Agreement) and records relating to such Shares of Unrestricted
Subsidiaries as contemplated by Section 6.9(h) hereto; and (xi) Liens consisting
solely of UCC financing statements that reflect the sale of accounts and chattel
paper by a Borrower to an Unrestricted Subsidiary.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, company, business trust or entity, or other entity of
whatever nature.
"Plan" shall mean an employee benefit plan as defined in Section 3(3)
of ERISA, other than a Multiemployer Plan, whether formal or informal and
whether legally binding or not.
"Potential Default" shall mean an event, condition or circumstance that
with the giving of notice or lapse of time or both would become an Event of
Default.
"Prime Rate" shall mean, for any day, the prime commercial lending rate
of the Administrative Agent, as announced from time to time at its head office.
"Prohibited Transaction" shall mean a transaction that is prohibited
under Section 4975 of the Code or Section 406 of ERISA and not exempt under
Section 4975 of the Code or Section 4.08 of ERISA.
"Regulation" shall mean any statute, law, ordinance, regulation, order
or rule of any United States or foreign, federal, state, local or other
government or governmental body, including, without limitation, those covering
or related to banking, financial transactions, securities, public utilities,
environmental control, energy, safety, health, transportation, bribery, record
keeping, zoning, antidiscrimination, antitrust, wages and hours, employee
benefits, and price and wage control matters.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as it may be amended from time to time.
"Regulatory Change" shall mean any change after the date of this
Agreement in any Regulation (including Regulation D) or the adoption or making
after such date of any interpretations, directives or requests of or under any
Regulation (whether or not having the force of law) by any court or governmental
or monetary authority charged with the interpretation or administration thereof
applying to a class of banks including any one of the Banks but excluding any
foreign office of any Bank.
"Release" shall mean without limitation, the presence, leaking,
leaching, pouring, emptying, discharging, spilling, using, generating,
manufacturing, refining, transporting, treating, or storing of Hazardous
Substances at, into, onto, from or about the property or the threat.thereof,
regardless of whether the result of an intentional or unintentional action or
omission, and which is in violation of applicable law.
16
"Reportable Event" shall mean, with respect to a Pension Plan: (i) Any
of the events set forth in Sections 4043(b) (other than a reportable event as to
which the provision of 30 days' notice to the PBGC is waived under applicable
regulations) or 4063(a) of ERISA or the regulations thereunder, (ii) an event
requiring either Borrower or any ERISA Affiliate to provide security to a
Pension Plan under Section 401(a)(29) of the Code and (iii) any failure by
either Borrower or any ERISA Affiliate to make payments required by Section
412(m) of the Code.
"Request for Advance" shall have the meaning set forth in Section 2.4.
"Required Banks" shall mean the Banks holding Loans and Revolving Loan
Commitments representing at least two-thirds (2/3) of the aggregate amount of
Loans and Revolving Loan Commitments under this Credit Facility.
"Reserve Percentage" shall mean, for any LIBO Rate Loan for any
Interest Period, the daily average of the stated maximum rate (expressed as a
decimal) at which reserves (including any marginal, supplemental, or emergency
reserves) are required to be maintained during such Interest Period under
Regulation D by the Banks against "Eurocurrency liabilities" (as such term is
used in Regulation D) but without benefit of credit proration, exemptions, or
offsets that might otherwise be available to the Banks from time to time under
Regulation D. Without limiting the effect of the foregoing, the Reserve
Percentage shall reflect any other reserves required to be maintained by the
Banks against (i) any category of liabilities which includes deposits by
reference to which the rate for LIBO Rate Loans is to be determined; or (ii) any
category of extension of credit or other assets which include LIBO Rate Loans.
The Adjusted LIBO Rate shall be adjusted on and as of the effective day of any
change in the Reserve Percentage.
"Restricted Subsidiary" shall mean any Subsidiary, direct or indirect,
of either of the Borrowers that is not an Unrestricted Subsidiary.
"Revolving Loan" shall have the meaning set forth in Section 2.1.
"Revolving Loan Commitment" shall have the meaning set forth in Section
2.1.
"Revolving Loan Commitment Fee" shall have the meaning set forth in
Section 2.5(a).
"Revolving Loan Commitment Percentage" shall mean with respect to each
Bank the percentage set forth in column (2) opposite its name in Exhibit A
hereto.
"Revolving Loan Termination Date" shall have the meaning set forth in
Section 2.1. "Revolving Credit Note" or "Revolving Credit Notes" shall have the
meaning set forth in Section 2.2.
"Security Agreement" shall mean the Security Agreement dated as of
September 30, 1998 among the Borrowers and the Administrative Agent as amended
by the First Amendment to Security Agreement.
"Senior Debt" shall mean Debt of the ▇▇▇▇▇▇ Companies, less (i) any
Debt that is expressly subordinated in writing (to the satisfaction of the
Majority Banks) to the Borrowers'
17
obligations under the Credit Facility, (ii) any unsecured guarantees of the debt
of Unrestricted Subsidiaries, and (iii) any nonrecourse Debt of any Unrestricted
Subsidiaries.
"Solvent" shall mean, with respect to any Person, that the aggregate
present fair saleable value of such Person's assets is in excess of the total
amount of its probable liabilities on its existing debts as they become absolute
and matured, such Person has not incurred debts beyond its foreseeable ability
to pay such debts as they mature, and such Person has capital adequate to
conduct the business it is presently engaged in or is about to engage in.
"Stage II" as it relates to any Aircraft or Engine shall mean such
condition as would render such Aircraft or Engine noncompliant with the noise
regulations set forth in FAR Part 36.
"Stage III" as it relates to any Aircraft or Engine shall mean such
condition as would render such Aircraft or Engine compliant with the noise
regulations set forth in FAR Part 36.
"Standby Letter of Credit" shall mean only those standby letters of
credit issued pursuant to a completed application on the form of letter of
credit application required by the Administrative Agent at the time of the
request for each Standby Letter of Credit.
"Subsidiary" shall mean a corporation or other entity the shares of
stock or other equity interests of which 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 are at the time owned, or the management of
which is otherwise controlled, directly or indirectly through one or more
intermediaries or both, by either Borrower.
"Syndication Agent" shall have the meaning set forth in the Preamble to
this Agreement, and shall also mean and include any successor Syndication Agent
appointed pursuant to Section 10.6 hereto.
"Tangible Net Worth" shall mean Net Worth minus Intangible Assets.
"Term Loan" or "Term Loans" shall have the meaning set forth in Section
2.8 "Term Loan Maturity Date" shall mean, with respect to any Term Loan, four
years from its Conversion Date.
"Term Note" or "Term Notes" shall have the meaning set forth in Section
2.8.
"Termination Event" shall mean, with respect to a Pension Plan: (i) a
Reportable Event, (ii) the termination of a Pension Plan, or the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension Plan
amendment as a termination under Section 4041(c) of ERISA, (iii) the institution
of proceedings to terminate a Pension Plan under Section 4042 of ERISA or (iv)
the appointment of a trustee to administer any Pension Plan under Section 4042
of ERISA.
"Trust Agreement" shall mean a Trust Agreement in the form and
substance attached hereto as Exhibit K, to be executed by each Owner Trustee
having ▇▇▇▇▇▇ as the sole beneficiary.
18
"Unfunded Pension Liabilities" shall mean, with respect to any Pension
Plan at any time, the amount determined by taking the accumulated benefit
obligation, as disclosed in accordance with Statement of Accounting Standards
No. 87, over the fair market value of Pension Plan assets.
"Unrecognized Retiree Welfare Liability" shall mean, with respect to
any Plan that provides post-retirement benefits other than pension benefits, the
amount of the accumulated post-retirement benefit obligation, as determined in
accordance with Statement of Financial Accounting Standards No. 106, as of the
most recent valuation date. Prior to the date such statement is applicable to
either Borrower, such amount of the obligation shall be based on an estimate
made in good faith.
"Unrestricted Subsidiary" shall mean any Subsidiary of either Borrower
designated as an unrestricted subsidiary by the Borrowers. In no event shall
WASI or WLFC (Ireland) Limited be designated as an Unrestricted Subsidiary.
"WASI Advance Amount" shall mean that amount of the Borrowing Base
composed of Aircraft, Engines and Parts owned by WASI and held for resale,
calculated as of the Conversion Date.
"▇▇▇▇▇▇ Companies" shall mean ▇▇▇▇▇▇ and its consolidated Subsidiaries,
including, without limitation, WASI (but excluding for purposes of Section 7.5
hereof, Pacific Gas Turbine Center, LLC (and future joint ventures which are
accounted for on a similar basis) except to the extent of dividends actually
paid to ▇▇▇▇▇▇).
"WLFC (Ireland) Documents" shall mean each Lease, sublease and all
other documents directly related or incidental to the Loans or the Collateral
entered into by WLFC (Ireland) Limited
1.2 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with Generally Accepted Accounting
Principles consistent with those applied in the preparation of the financial
statements referred to in Section 3.6, and all financial data submitted pursuant
to this Agreement shall be prepared in accordance with such principles.
SECTION 2.
THE CREDIT
2.1 The Revolving Loans.
(a) Revolving Loans; Revolving Loan Commitment. Subject to the terms
and conditions herein set forth and in reliance upon the representations,
warranties and covenants contained herein, each Bank agrees, severally and not
jointly, to make revolving credit loans (collectively, the "Revolving Loans" and
individually a "Revolving Loan") to the Borrowers during the period beginning on
the Closing Date and ending on September 30, 2000 or on the earlier date of
termination in full, pursuant to Section 2.6, Section 2.7 or Section 8.1 hereof,
of the obligations of such Bank under this Section 2.1 (September 30, 2000 or
such earlier date of termination being herein called the "Revolving Loan
Termination Date") in amounts not to exceed at any
19
time outstanding, in the aggregate, the commitment amount set forth in column
(1) opposite the name of such Bank on Exhibit A hereto (each such amount, as the
same may be reduced pursuant to Section 2.6 hereof being hereinafter called such
Bank's "Revolving Loan Commitment"). The Banks' collective commitment to make
Revolving Loans under this Credit Facility shall be the "Aggregate Revolving
Loan Commitment," and shall include a $3,000,000 sublimit for Standby Letters of
Credit. All Revolving Loans shall be made by the Banks simultaneously and pro
rata in accordance with their respective Revolving Loan Commitments. All
Revolving Loans shall be made to the Borrowers at the primary office of the
Administrative Agent in Philadelphia located at Broad and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Revolving Loan Commitment may be renewed
annually at the Borrowers' request and the sole discretion of the Banks.
(b) Interest Rate Options. Revolving Loans shall bear interest at (i)
the Base Rate plus the Applicable Margin for Revolving Loans, or (ii) Adjusted
LIBO Rate plus the Applicable Margin for Revolving Loans, provided that, in the
case of LIBO Rate Loans (a) not more than five such Loans may be outstanding at
any one time, and (b) no LIBO Rate Loan may have an Interest Period extending
beyond the Revolving Loan Termination Date unless it is converted to a Term Loan
pursuant to the provisions of this Agreement.
(c) Maximum Loans Outstanding. The Borrowers shall not be entitled to
any new Revolving Loan if, after giving effect to such Loan, the unpaid amount
of the then outstanding Loans would exceed the lesser of (i) the Aggregate
Revolving Loan Commitment or (ii) the then current Borrowing Base as stated in
the most recent Borrowing Base Certificate furnished to the Banks as provided
herein. For purposes of determining the amount of Revolving Loans outstanding,
the Standby Letters of Credit issued pursuant to Section 2.3 hereof shall be
deemed Revolving Loans and shall be added to the Revolving Loans outstanding to
determine the aggregate Revolving Loans outstanding.
(d) Minimum Loan Amount. Except for Loans which exhaust the full
remaining amount of the Aggregate Revolving Loan Commitment and conversions
which result in the conversion of all Loans subject to a particular interest
rate option, each of which may be in lesser amounts, (i) each LIBO Rate Loan
when made (and each conversion of Base Rate Loans into LIBO Rate Loans) shall be
in an amount at least equal to $3,000,000 or, if greater, then in such minimum
amount plus $100,000 multiples, and (ii) each Base Rate Loan when made (and each
conversion of LIBO Rate Loans into Base Rate Loans) shall be in an amount at
least equal to $150,000.
(e) Prepayment and Reborrowing. Prior to the Revolving Loan Termination
Date and within the limits of the Aggregate Revolving Loan Commitment and the
Borrowing Base, the Borrowers may borrow, prepay and reborrow Revolving Loans.
All Revolving Loans shall mature and be due and payable on the Revolving Loan
Termination Date unless they are converted to Term Loans pursuant to Section
2.8.
(f) Revolving Loan Commitment Percentages. The obligation of each Bank
to make a Revolving Loan to the Borrowers at any time shall be limited to its
percentage (the "Revolving Loan Commitment Percentage") as set forth in column
(2) opposite its name on Exhibit A hereto multiplied by the aggregate principal
amount of the Revolving Loan requested. The principal amounts of the respective
Revolving Loans made by the Banks on the occasion of each
20
borrowing shall be pro rata in accordance with their respective Revolving Loan
Commitment Percentages. No Bank shall be required or permitted to make any Loan
if, immediately after giving effect to such Loan, and the application of the
proceeds of a Loan to the extent applied to the repayment of the Loans, the sum
of such Bank's Loans outstanding would exceed such Bank's Revolving Loan
Commitment.
(g) Several Obligations. The failure of any one or more Banks to make
Revolving Loans in accordance with its or their obligations shall not relieve
the other Banks of their several obligations hereunder, but in no event shall
the aggregate amount at any one time outstanding which any Bank shall be
required to lend hereunder exceed its Revolving Loan Commitment.
2.2 The Revolving Notes. The Revolving Loans made by each Bank shall be
evidenced by a single promissory note of the Borrowers under which they shall be
jointly and severally liable (each such promissory note as it may be amended,
extended, modified or renewed a "Revolving Credit Note" and together the
"Revolving Credit Notes") in principal face amount equal to such Bank's
Revolving Loan Commitment, payable to the order of such Bank and otherwise in
the form attached hereto as Exhibit C. The Revolving Credit Notes shall be dated
the Closing Date, shall bear interest at the rate per annum and be payable as to
principal and interest in accordance with the terms hereof. Each outstanding
Revolving Loan shall be due and payable as set forth in Section 2.1 hereof
unless the maturity of said Loans is accelerated as provided in Section 2.6 or
Section 8.1 hereof or converted as provided in Sections 2.7 or 2.8 hereof.
Notwithstanding the stated amount of any Revolving Credit Note, the liability of
the Borrowers under each Revolving Credit Note shall be limited at all times to
the outstanding principal amount of the Revolving Loans by each Bank evidenced
thereby, plus all interest accrued thereon and the amount of all costs and
expenses then payable hereunder, as established by each such Bank's books and
records, which books and records shall be conclusive absent manifest error.
2.3 Standby Letters of Credit. The Administrative Agent, under the
terms and subject to the conditions of this Agreement, on behalf of itself and
each other Bank in the same proportions as each Bank's Revolving Loan Commitment
bears to the Aggregate Revolving Loan Commitment, shall provide Standby Letters
of Credit to the Borrowers from time to time prior to the Revolving Loan
Termination Date, as requested by the Borrowers, provided that (i) the aggregate
amount of Standby Letters of Credit outstanding at any one time shall not exceed
$3,000,000 or such lesser amount, if any, as will, when added to the amount of
the Revolving Loans then outstanding, aggregate more than the Aggregate
Revolving Loan Commitment (or such lesser amount as the Borrowers are entitled
to borrow hereunder at such time by reason of the limitation of the Borrowing
Base or otherwise); (ii) no Standby Letter of Credit shall be for a term longer
than one year; and (iii) no Standby Letter of Credit shall be required to be
issued when any Event of Default or Potential Default exists. The Borrowers
shall request a Standby Letter of Credit by delivering a completed letter of
credit application to the Administrative Agent on such form as may be specified
by the Administrative Agent not less than three Business Days prior to the date
specified by the Borrowers as the date the Standby Letter of Credit is to be
issued. The standard form of the Administrative Agent's letter of credit
application as currently in effect shall be used. The Administrative Agent shall
notify the Banks promptly after the issuance of any Standby Letter of Credit and
will provide the Banks copies of the periodic
21
Borrowing Base Certificates showing the current balance of outstanding Standby
Letters of Credit as delivered by the Borrowers to the Administrative Agent.
Standby Letter of Credit fees will be equal to the Applicable Margin
for LIBO Rate Loans on an annual basis, calculated on the basis of the days
actually elapsed in a year of 360 days (paid to the Administrative Agent for
distribution to the Banks) plus a fronting fee of 0.125% per year to be paid to
the Fronting Bank for its own account. Such fees will be calculated based on the
aggregate stated amount for each Standby Letter of Credit and will be due
quarterly in arrears, commencing on the last Business Day of the calendar
quarter in which such Standby Letter of Credit is issued.
If any obligation of the Borrowers to pay money in connection with any
Standby Letter of Credit is not met when requested by the Administrative Agent
as permitted by the applicable letter of credit application and the
reimbursement agreement contained therein, the amount due shall be funded
automatically by a Revolving Loan which Loan shall be made without regard to any
minimum borrowing requirement, condition precedent herein, or Event of Default
hereunder which would otherwise entitle any Bank or the Banks not to provide
such Revolving Loan, and each Bank shall make its proportionate share of such
Revolving Loan. Any obligation of the Borrowers to pay money in connection with
any Standby Letter of Credit or the application therefor shall be deemed secured
as if made as a Loan hereunder. In the event the Borrowers shall terminate the
Aggregate Revolving Loan Commitment as provided in Section 2.6 and shall pay the
outstanding principal amount of the Revolving Loans in full and with interest or
the Revolving Loan Termination Date shall occur at a time when one or more
Standby Letters of Credit remain outstanding, then the Borrowers shall furnish
to the Administrative Agent within two Business Days such amount of cash, to be
held as cash collateral and invested in certificates of deposit of the
Administrative Agent with interest payable to the Borrowers, as will pay the
maximum amount which may be drawn by beneficiaries of Standby Letters of Credit
outstanding at the date of such termination or the Revolving Loan Termination
Date, as applicable.
2.4 Funding Procedures.
(a) Request for Advance. Each request for a Revolving Loan or the
conversion or renewal of an interest rate with respect to a Loan shall be made
not later than 2:00 p.m. eastern prevailing time on a Business Day by delivery
to the Administrative Agent of a written request signed by the Borrowers or, in
the alternative, a telephone request followed promptly by written confirmation
of the request (a "Request for Advance"), specifying the date and amount of the
Loan to be made, converted or renewed, selecting the interest rate option
applicable thereto, and in the case of LIBO Rate Loans, specifying the Interest
Period applicable to such Loans. The form of request to be used in connection
with the making, conversion or renewal of Loans shall be that form provided to
the Borrowers by the Administrative Agent. Each request shall be received not
less than one Business Day prior to the date of the proposed borrowing,
conversion or renewal in the case of Base Rate Loans and three London Business
Days prior to the date of the proposed borrowing, conversion or renewal in the
case of LIBO Rate Loans. No request shall be effective until actually received
in writing by the Administrative Agent. The Borrowers may not request more than
three advances per week. Each Request for Advance shall be for Loans at a single
interest rate option.
22
(b) Actions by the Administrative Agent. Upon receipt of a Request for
Advance and if the conditions precedent provided herein shall be satisfied at
the time of such request, the Administrative Agent promptly shall notify each
Bank of such request and of such Bank's ratable share of such Loan. Upon receipt
by the Administrative Agent of a Request for Advance, the request shall not be
revocable by the Borrowers.
(c) Availability of Funds. Not later than 1:00 p.m. eastern prevailing
time on the date of each Loan, each Bank shall make available (except as
provided in clause (d) below) its ratable share of such Loan, in immediately
available funds, to the Administrative Agent at the address set forth opposite
its name on the signature page hereof or at such account in London as the
Administrative Agent shall specify to the Borrowers and the Banks. Unless the
Administrative Agent knows that any applicable condition specified herein has
not been satisfied, it will make the funds so received from the Banks
immediately available to the Borrowers on the date of each Loan by a credit to
the account of the Borrowers at the Administrative Agent's aforesaid address.
(d) Funding Assumptions. Unless the Administrative Agent shall have
been notified by any Bank at least one Business Day prior to the date of the
making, conversion or renewal of any LIBO Rate Loan, or by 3:00 p.m. eastern
prevailing time on the date a Base Rate Loan is requested, that such Bank does
not intend to make available to the Administrative Agent, such Bank's portion of
the total amount of the Loan to be made, converted or renewed on such date, the
Administrative Agent may assume that such Bank has made such amount available to
the Administrative Agent on the date of the Loan and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrowers a
corresponding amount. If and to the extent such Bank shall not have so made such
funds available to the Administrative Agent, such Bank agrees to repay the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrowers until the date such amount is repaid to the Administrative Agent,
at the Federal Funds Rate plus 50 basis points for three Business Days, and
thereafter at the Base Rate. If such Bank shall repay to the Administrative
Agent such corresponding amount, such amounts so repaid shall constitute such
Bank's Loan for purposes of this Agreement. If such Bank does not repay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the Borrowers, and the Borrowers
shall immediately pay such corresponding amount to the Administrative Agent,
without any prepayment penalty or premium, but with interest on the amount
repaid, for each day from the date such amount is made available to the
Borrowers until the date such amount is repaid to the Administrative Agent, at
the rate of interest applicable at the time to such Loan. Nothing herein shall
be deemed to relieve any Bank of its obligation to fulfill its Revolving Loan
Commitment hereunder or to prejudice any rights which the Borrowers may have
against any Bank as a result of any default by such Bank hereunder.
(e) Proceeds of Loan Being Repaid. If the Banks make a Loan on a day on
which all or any part of an outstanding Loan from the Banks is to be repaid,
each Bank shall apply the proceeds of its new Loan towards Borrowers'
obligations to make such Bank's proportionate share of such repayment and only
an amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Bank to the
Administrative Agent as provided in clause (c).
23
2.5 Revolving Loan Commitment Fee.
(a) The Borrowers agree to pay to the Administrative Agent for the
account of each Bank as compensation for the Aggregate Revolving Loan
Commitment, a fee based on the average daily unused committed amount of the
Revolving Credit Facility (the "Revolving Loan Commitment Fee") computed as
indicated on the chart set forth on Exhibit D hereto, based on the then
applicable Leverage Ratio of the Borrowers. The Revolving Loan Commitment Fee
shall be payable quarterly in arrears on the first day of each January, April,
July and October, commencing April 1, 2000 (for the three month period or
portion thereof ended on the preceding day), and on the Revolving Loan
Termination Date. The Revolving Loan Commitment Fee shall be calculated on the
basis of the actual number of days elapsed in a 360-day year.
(b) The Borrowers agree to pay to the Administrative Agent on the
Effective Date an amendment/modification fee for the account of each Bank in an
amount previously agreed between the Borrowers and the Administrative Agent.
2.6 Reduction or Termination of Revolving Loan Commitments.
(a) Voluntary. The Borrowers may at any time, on not less than one
Business Days' written notice, terminate or permanently reduce the Aggregate
Revolving Loan Commitment pro rata among the Banks, provided that any reduction
shall be in the minimum amount of $1,000,000 or a multiple thereof and that no
such reduction shall cause the principal amount of Loans and Standby Letters of
Credit outstanding to exceed the reduced Aggregate Revolving Loan Commitment or
the Borrowing Base, whichever is less.
(b) Revolving Loan Commitment Termination. In the event the Aggregate
Revolving Loan Commitment is terminated, the Revolving Loan Termination Date
shall be accelerated to the date of such termination and Borrowers shall,
simultaneously with such termination, repay the Revolving Loans in accordance
with Section 2.12.
2.7 Mandatory Prepayments; Conversion to Term Loans. Subject to the
terms set out in the last sentence of Section 7.6 hereof, if the aggregate
principal amount of Loans and the face amount of Standby Letters of Credit
outstanding under this Credit Facility at any time exceed the total Borrowing
Base, the Borrowers shall make immediate prepayments to reduce such outstanding
Loans plus the face amount of such Standby Letters of Credit to an amount not to
exceed the Borrowing Base; provided, however, that if prior to the Revolving
Loan Termination Date (i) this mandatory prepayment is required by a reduction
to the Borrowing Base necessitated by the results of an appraisal of the
Equipment, and (ii) the amount of the required mandatory prepayment would not
exceed 15% of all Loans then outstanding under the Credit Facility, the
Borrowers may elect to convert all outstanding Revolving Loans under the Credit
Facility to Term Loans pursuant to Section 2.8(b). Such conversion will
immediately cause the Revolving Loan Termination Date to accelerate and the
Banks will have no further obligation to make any Revolving Credit Loans under
this Agreement.
2.8 Term Loans.
(a) Conversion on Revolving Loan Termination Date. On the Revolving
Loan Termination Date, all or a portion of the Revolving Loans then outstanding
may at Borrowers'
24
option be converted to term loans in accordance with the provisions of this
Section 2.8 (individually, a "Term Loan" and collectively, the "Term Loans").
All Term Loans so created shall mature on the applicable Term Loan Maturity
Date. Any and all amounts not so converted shall be due and payable on the
Revolving Loan Termination Date.
(b) Conversion Prior to Revolving Loan Termination Date; Termination of
Revolving Credit Facility. If the Borrowers exercise the option of converting
their Revolving Loans to Term Loans pursuant to Section 2.7, such conversion
will immediately terminate the Revolving Credit Facility.
(c) Interest Rate Options. Term Loans shall bear interest at (i) the
Base Rate plus the Applicable Margin for Term Loans, or (ii) the Adjusted LIBO
Rate plus the Applicable Margin for Term Loans, provided that in the case of
LIBO Rate Term Loans (a) not more than five such Loans may be outstanding at any
one time, (b) any Term Loan may, at the Borrowers' option, continue the Interest
Period assigned to the Revolving Loan from which it was converted, if such
Interest Period would expire after the Conversion Date, and (c) no LIBO Rate
Term Loan may have an Interest Period extending beyond the Term Loan Maturity
Date.
(d) The Term Notes. Each Term Loan created at the Revolving Facility
Termination Date or any Conversion Date shall be evidenced by a separate
promissory note of the Borrowers, under which they shall be jointly and
severally liable, substantially in the form of Exhibit I hereto (each such
promissory note as it may be amended, extended, modified or renewed a "Term
Note" and together the "Term Notes.")
(e) Amortization of Term Loans. Each Term Loan shall require quarterly
principal payments every three months (commencing three months from the
Conversion Date) based upon the amortization schedules set forth in Subsections
2.8(e)(i) and (ii) below, with the final payment of all amounts outstanding,
plus accrued interest, coming due four years from such Term Loan's Conversion
Date (such date with respect to a Term Loan being the "Term Loan Maturity
Date").
(i) If the aggregate outstanding balance of the Revolving Loans on the
Conversion Date is equal to or less than the Engine and Aircraft Advance Amount
calculated as of the Conversion Date, then such principal balance, when
converted into Term Loans, shall be amortized as follows: During the period from
the Conversion Date to the day before the first anniversary of the Conversion
Date, 14.4% of the aggregate principal balance existing on the Conversion Date
shall be repaid in four equal quarterly installments; during the period from the
first anniversary of the Conversion Date to the day before the second
anniversary of the Conversion Date, 15.6% of the aggregate principal balance
existing on the Conversion Date shall be repaid in four equal quarterly
installments; during the period from the second anniversary of the Conversion
Date to the day before the third anniversary of the Conversion Date, 16.8% of
the aggregate principal balance existing on the Conversion Date shall be repaid
in four equal quarterly installments; during the period from the third
anniversary of the Conversion Date to the day before the fourth anniversary of
the Conversion Date, 18.0% of the aggregate principal balance existing on the
Conversion Date shall be repaid in four equal quarterly installments; and on the
fourth anniversary of the Conversion Date, the entire remaining principal
balance (35.2% of the aggregate principal balance existing on the Conversion
Date) shall be repaid in full.
25
(ii) If the aggregate outstanding balance of the Revolving Loans on the
Conversion Date exceeds the Engine and Aircraft Advance Amount calculated as of
the Conversion Date, then (a) that portion of such principal balance
constituting the WASI Advance Amount, when converted into Term Loans, shall be
amortized as follows: during each successive one-year period following the
Conversion Date, 25.0% of such principal balance existing on the Conversion Date
shall be repaid in four equal quarterly installments, and (b) that portion of
such principal balance in excess of the WASI Advance Amount, when converted to
Term Loans, shall be amortized in accordance with clause (i) above.
2.9 Payment of Additional Amount. If any principal of a LIBO Rate Loan
shall be repaid (whether upon mandatory or voluntary prepayment, reduction of
the Aggregate Revolving Loan Commitment after acceleration or for any other
reason) or converted to a Base Rate Loan prior to the last day of the Interest
Period applicable to such LIBO Rate Loan or if the Borrowers fail for any reason
to borrow a LIBO Rate Loan after giving irrevocable notice pursuant to Section
2.4, they shall pay to each Bank, in addition to the principal and interest then
to be paid, such additional amounts as may be necessary to compensate each Bank
for all direct and indirect costs and losses (including losses resulting from
redeployment of prepaid or unborrowed funds at rates lower than the cost of such
funds to such Bank, and including lost profits incurred or sustained by such
Bank) as a result of such repayment or failure to borrow (the "Additional
Amount"). The Additional Amount (which each Bank shall take reasonable measures
to minimize) shall be specified in a written notice or certificate delivered to
the Borrowers by the Administrative Agent in the form provided by each Bank
sustaining such costs or losses. Such notice or certificate shall contain a
calculation in reasonable detail of the Additional Amount to be compensated and
shall be conclusive as to the facts and the amounts stated therein, absent
manifest error.
2.10 Interest.
(a) Base Rate Loans. Each Base Rate Loan shall bear interest on the
unpaid principal balance thereof from day to day at a rate per annum which at
all times shall be equal to the Base Rate plus the Applicable Margin. Interest
on Base Rate Loans shall be computed on the basis of a year of 365 or 366 days,
as applicable, for the actual days elapsed, if the Base Rate is equal to the
Prime Rate. Interest on Base Rate Loans shall be computed on the basis of a year
of 360 days, for the actual days elapsed, if the Base Rate is equal to the
Federal Funds Rate plus 1/2 of 1% per annum.
(b) LIBO Rate Loans. Each LIBO Rate Loan shall bear interest on the
unpaid principal amount thereof at Adjusted LIBO Rate plus the Applicable
Margin. Interest on LIBO Rate Loans shall be computed on the basis of a year of
360 days, for the actual days elapsed.
(c) Conversion to Base Rate. Unless the Borrowers shall have elected in
accordance with the provisions of Section 2.4 or this Section 2.10 that LIBO
Rate apply to the one, two, three or six-month period immediately succeeding a
particular Interest Period, upon the termination of such Interest Period the
applicable Loan shall bear interest at the Base Rate plus the Applicable Margin
until such time as the Borrowers elect to request a new LIBO Rate Loan for a
subsequent Interest Period.
26
(d) Renewals and Conversions. The Borrowers shall have the right to
convert Base Rate Loans into LIBO Rate Loans, and vice versa, and to renew LIBO
Rate Loans from time to time, provided that: (i) the Borrowers shall give the
Administrative Agent notice of each permitted conversion or renewal; (ii) LIBO
Rate Loans may be converted or renewed only as of the last day of the applicable
Interest Period for such Loans; (iii) without the consent of the Majority Banks,
no Base Rate Loan may be converted into a LIBO Rate Loan, and no Interest Period
may be renewed if on the proposed date of conversion an Event of Default or
Potential Default exists or would thereby occur. The Administrative Agent shall
use its best efforts to notify the Borrowers and the Banks of the effectiveness
of such conversion or renewal, and the new interest rate to which the converted
or renewed Loan is subject, as soon as practicable after the conversion;
provided, however, that any failure to give such notice shall not affect the
Borrowers' obligations or the Banks' rights and remedies hereunder in any way
whatsoever.
(e) Interim Payments At Base Rate. If at any time the Borrowers request
that Adjusted LIBO Rate plus the Applicable Margin be applicable to a Loan for a
particular Interest Period and a payment of principal is due within such period
(other than on the last day of such Interest Period), only that portion of that
Loan equal to the outstanding principal amount of the Loan less the principal
installment due during such period shall bear interest at Adjusted LIBO Rate
plus the Applicable Margin for such Interest Period. The portion of that Loan
equal to the principal installment due during such period shall bear interest at
the Base Rate plus the Applicable Margin.
(f) Reinstatements. The liability of the Borrowers under this Section
2.10 shall continue to be effective or be automatically reinstated, as the case
may be, if at any time payment, in whole or in part, of any of the payments to
the Banks is rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of either
Borrower or any other Person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Borrowers or any other Person or any substantial part of its property, or
otherwise, all as though such payment had not been made.
2.11 Voluntary Prepayments.
(a) Base Rate Loans. On one Business Day's notice to the Administrative
Agent, the Borrowers may, without penalty, at their option, prepay any Base Rate
Loan in whole at any time or in part from time to time, provided that each
partial prepayment shall be in the minimum principal amount of $150,000 or, if
greater, then in multiples thereof and, if less than $150,000 shall be
outstanding, in principal amount equal to amount remaining outstanding.
Notwithstanding the foregoing, prepayments may be made in connection with the
release of Collateral as provided in Section 9.3, which prepayments shall not be
subject to the proviso contained in the previous sentence.
(b) LIBO Rate Loans. On three London Business Days' notice to the
Administrative Agent, the Borrowers may, without penalty, at their option,
prepay any LIBO Rate Loan in whole at any time or in part from time to time,
provided that each partial prepayment shall be in the minimum principal amount
of $1,000,000 or, if greater, then in multiples of $100,000 and, if less than
$1,000,000 shall be outstanding, in principal amount equal to the amount
remaining outstanding, provided that if they shall prepay a LIBO Rate Loan prior
to the last day of the
27
applicable Interest Period, or shall fail to borrow any LIBO Rate Loan on the
date such Loan is to be made, they shall pay to each Bank, in addition to the
principal and interest then to be paid in the case of a prepayment, on such date
of prepayment, the Additional Amount incurred or sustained by such Bank as a
result of such prepayment or failure to borrow as provided in Section 2.9.
(c) Application of Prepayments. Each partial prepayment of a Term Loan
pursuant to this Section 2.11 shall be applied pro rata to the remaining
installments due thereunder.
2.12 Payments.
(a) Accrued Interest. Accrued interest on all Base Rate Loans shall be
due and payable in arrears on the first Business Day of each calendar month.
Interest on LIBO Rate Loans shall be payable in arrears on the last day of the
applicable Interest Period, provided that if an Interest Period in respect of a
LIBO Rate Loan exceeds three months, accrued interest shall be payable on the
three-month anniversary of such LIBO Rate Loan. Each Revolving Loan shall mature
as provided in Section 2.1.
(b) Form of Payments, Application of Payments, Payment Administration,
Etc. Subject to the provisions of Section 11.7(b) hereto, all payments of
principal, interest, fees, or other amounts payable by the Borrowers hereunder
shall be applied to the Loans in such order and to such extent as shall be
specified by the Borrowers by written notice to the Administrative Agent at the
time of such payment or prepayment. Such payments shall be remitted in United
States dollars to the Administrative Agent on behalf of the Banks at the address
set forth opposite its name on the signature page hereof or at such office or
account as the Administrative Agent shall specify to the Borrowers, in
immediately available funds not later than 2:00 p.m. eastern prevailing time on
the day when due. Whenever any payment is stated as due on a day which is not a
Business Day, the maturity of such payment shall, except as otherwise provided
in the definition of "Interest Period," be extended to the next succeeding
Business Day and interest and commitment fees shall continue to accrue during
such extension. The Borrowers authorize the Administrative Agent to deduct from
any account of the Borrowers maintained at the Administrative Agent or over
which the Administrative Agent has control any amount payable under this
Agreement, the Notes or any other Loan Document which is not paid in a timely
manner. The Administrative Agent's failure to deliver any ▇▇▇▇, statement or
invoice with respect to amounts due under this Section or under any Loan
Document shall not affect the Borrowers' joint and several obligation to pay any
installment of principal, interest or any other amount under this Agreement when
due and payable.
(c) Demand Deposit Account. The Borrowers shall maintain at least one
demand deposit account with the Administrative Agent for purposes of this
Agreement. The Borrowers authorize the Administrative Agent to deposit into said
account all amounts to be advanced to the Borrowers hereunder. Further, the
Borrowers authorize the Administrative Agent (but the Administrative Agent shall
not be obligated) to deduct from said account, or any other account maintained
by the Borrowers at the Administrative Agent, any amount payable hereunder on or
after the date upon which it is due and payable. Such authorization shall
include but not be limited to amounts payable with respect to principal,
interest, fees and expenses.
28
(d) Net Payments. All payments made to the Banks by the Borrowers
hereunder, under any Note or under any other Loan Document will be made without
set off, counterclaim or other defense.
2.13 Change in Circumstances, Yield Protection.
(a) Certain Regulatory Changes. If any Regulatory Change or compliance
by any Bank with any request made after the date of this Agreement by the Board
of Governors of the Federal Reserve System or by any Federal Reserve Bank or
other central bank or fiscal, monetary or similar authority (in each case
whether or not having the force of law) shall (i) impose, modify or make
applicable any reserve, special deposit, Federal Deposit Insurance Corporation
premium or similar requirement or imposition against assets held by, or deposits
in or for the account of, or loans made by, or any other acquisition of funds
for loans or advances by, any Bank; (ii) impose on any Bank any other condition
regarding the Notes; (iii) subject any Bank to, or cause the withdrawal or
termination of any previously granted exemption with respect to, any tax
(including any withholding tax but not including any income tax not currently
causing any Bank to be subject to withholding) or any other levy, impost, duty,
charge, fee or deduction on or from any payments due from the Borrowers; or (iv)
change the basis of taxation of payments from the Borrowers to any Bank (other
than by reason of a change in the method of taxation of any Bank's net income);
and the result of any of the foregoing events is to increase the cost to any
Bank of making or maintaining any Loan or to reduce the amount of principal,
interest or fees to be received by any Bank hereunder in respect of any Loan,
the Administrative Agent will immediately so notify the Borrowers. If any Bank
determines in good faith that the effects of the change resulting in such
increased cost or reduced amount cannot reasonably be avoided or the cost
thereof mitigated, then upon notice by the Administrative Agent to the
Borrowers, the Borrowers shall pay to such Bank on each interest payment date of
the Loans, such additional amount as shall be necessary to compensate that Bank
for such increased cost or reduced amount.
(b) Capital Adequacy. If any Bank shall determine that any Regulation
regarding capital adequacy or the adoption of any Regulation regarding capital
adequacy, which Regulation is applicable to banks (or their holding companies)
generally and not such Bank (or its holding company) specifically, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Bank (or its
holding company) with any such request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has the effect of reducing the rate of return on such Bank's
capital as a consequence of its obligations hereunder to a level below that
which such Bank could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, the Borrowers shall
promptly pay to the Administrative Agent for the account of such Bank, upon the
demand of such Bank, such additional amount or amounts as will compensate such
Bank for such reduction.
(c) Ability to Determine LIBO Rate. If the Administrative Agent shall
determine (which determination will be made after consultation with any Bank
requesting same and shall be, in the absence of fraud or manifest error,
conclusive and binding upon all parties hereto) that by reason
29
of abnormal circumstances affecting the interbank eurodollar or applicable
eurocurrency market adequate and reasonable means do not exist for ascertaining
the LIBO Rate to be applicable to the requested LIBO Rate Loan or that
eurodollar or eurocurrency funds in amounts sufficient to fund all the LIBO Rate
Loans are not obtainable on reasonable terms, the Administrative Agent shall
give notice of such inability or determination by telephone to the Borrowers and
to each Bank at least two Business Days prior to the date of the proposed Loan
and thereupon the obligations of the Banks to make, convert other Loans to, or
renew such LIBO Rate Loan shall be excused, subject, however, to the right of
the Borrowers at any time thereafter to submit another request.
(d) Yield Protection. Determination by a Bank for purposes hereof of
the effect of any Regulatory Change or other change or circumstance referred to
in this Section 2.13 on its costs of making or maintaining Loans or on amounts
receivable by it in respect of the Loans and of the additional amounts required
to compensate such Bank in respect of any additional costs, shall be made in
good faith and shall be evidenced by a certificate, signed by an officer of such
Bank and delivered to the Borrowers, as to the fact and amount of the increased
cost incurred by or the reduced amount accruing to such Bank owing to such event
or events. Such certificate shall be prepared in reasonable detail and shall be
conclusive as to the facts and. amounts stated therein, absent manifest error.
The Borrowers shall pay such Bank the amount shown as due at the times required
herein.
(e) Syndication Costs. If, within 180 days from the Effective Date, any
Agent incurs any breakage costs, charges or fees with respect to LIBO Rate Loans
on account of the syndication of this Credit Facility, the Borrowers shall
immediately reimburse such Agent for any such costs, charges or fees. Such right
of reimbursement is in addition to, and not in limitation of, any other
provisions of this Agreement. The Borrowers shall pay such Agent the amount
shown as due on such notice within 10 days after its receipt of the same.
(f) Notice of Events. The affected Bank will notify the Borrowers of
any event occurring after the date of this Agreement that will entitle such Bank
to compensation pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation. Said
notice shall be in writing, shall specify the applicable Section or Sections of
this Agreement to which it relates and shall set forth the amount or amounts
then payable pursuant to this Section.
2.14 Illegality. Notwithstanding any other provision in this Agreement,
if the adoption of any applicable Regulation, or any change therein, or any
change in the interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request or directive
(whether or not having the force of law) of any such authority, central bank, or
comparable agency shall make it unlawful or impossible for any Bank to (a)
maintain its Revolving Loan Commitment, then upon notice to the Borrowers by the
Administrative Agent, its Revolving Loan Commitment shall terminate; or (b)
maintain or fund its LIBO Rate Loans, then upon notice to the Borrowers of such
event, the Borrowers' outstanding LIBO Rate Loans shall be converted into Base
Rate Loans.
30
2.15 Discretion of each Bank as to Manner of Funding. Notwithstanding
any provision of this Agreement to the contrary, each Bank shall be entitled to
fund and maintain its funding of all or any part of its Loans in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if each Bank had actually funded
and maintained each LIBO Rate Loan during each Interest Period for such Loan
through the purchase of deposits in the relevant interbank market having a
maturity corresponding to such Interest Period and bearing an interest rate
equal to the LIBO Rate for such Interest Period.
2.16 Appraisals. Within 20 days following the receipt by the Banks of
the Borrowing Base Certificate covering the last month of a Fiscal Quarter, the
Majority Banks may request that an appraisal be conducted with respect to
Eligible Engines added to the Borrowing Base during the Fiscal Quarter just
ended. The appraisal shall be a "desktop appraisal" (unless a Potential Default
or an Event of Default then exists) and shall be conducted by an appraiser
retained by the Appraisal Agent on behalf of the Banks, and the cost of each
such appraisal will be paid by the Borrowers. In addition to paying the costs of
the appraisals as aforesaid, for each year (measured from the Effective Date),
or part thereof, that this Agreement remains in effect or that this Credit
Facility remains available to the Borrowers, the Borrowers shall also pay the
Appraisal Agent an Appraisal Agent fee in consideration for the Appraisal
Agent's services under this Agreement. The Appraisal Agent fee shall be paid in
advance on the first day of each such year.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Each of the Borrowers represents and warrants to the Banks that:
3.1 Organization, Standing. It (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 necessary to own its
assets, carry on its business and enter into and perform its obligations
hereunder, and under each Loan Document to which it is a party, and (c) is
qualified to do business and is in good standing in each jurisdiction where the
nature of its business or the ownership of its properties requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect.
3.2 Corporate Authority, Validity, Etc. The making and performance of
the Loan Documents to which it is a party are within its power and authority and
have been duly authorized by all necessary corporate action. The making and
performance of the Loan Documents do not and under present law will not require
any consent or approval not obtained of any of its shareholders, or any other
person, do not and under present law will not violate any law, rule, regulation
order, writ, judgment, injunction, decree, determination or award, do not
violate any provision of its charter or by-laws, do not and will not result in
any breach of any material agreement, lease or instrument to which it is a
party, by which it is bound or to which any of its assets are or may be subject,
and do not and will not give rise to any Lien upon any of its assets except the
Lien in favor of the Administrative Agent contemplated hereby. The number of
shares and classes of the capital stock of each Borrower and the ownership
thereof are accurately set forth on Schedule 1 attached hereto; all such shares
are validly issued, fully paid and non-assessable, and the issuance and sale
thereof are in compliance with all applicable federal and state securities and
other applicable laws. Further, neither Borrower is in default
31
under any such agreement, lease or instrument except to the extent such default
reasonably could not have a Material Adverse Effect. No authorizations,
approvals or consents of, and no filings or registrations with, any governmental
or regulatory authority or agency are necessary for the execution, delivery or
performance by the Borrowers of any Loan Document to which it is a party or for
the validity or enforceability thereof, except any filings or registrations
expressly contemplated by the Loan Documents.
3.3 Validity of Loan Documents. The Loan Documents, when executed and
delivered, will be legal, valid, and binding obligations of the Borrowers,
enforceable in accordance with their respective terms.
3.4 Litigation. Except as disclosed on Schedule 1, there are no
actions, suits or proceedings pending or, to the Borrowers' knowledge,
threatened against or affecting the Borrowers or any of their assets before any
court, government agency, or other tribunal which if adversely determined
reasonably could have a Material Adverse Effect. If there is any disclosure on
Schedule 1, the status (including the tribunal, the nature of the claim and the
amount in controversy) of each such litigation matter as of the date of this
Agreement is set forth in Schedule 1.
3.5 ERISA. (a) The Borrowers and each ERISA Affiliate are in compliance
in all material respects with all applicable provisions of ERISA and the
regulations promulgated thereunder; and, neither either Borrower, nor any ERISA
Affiliate maintains or contributes to or has maintained or contributed to any
multiemployer plan (as defined in Section 4001 of ERISA) under which the
Borrowers or any ERISA Affiliate could have any withdrawal liability; (b)
neither the Borrowers nor any ERISA Affiliate, sponsors or maintains any Plan
under which there is an accumulated funding deficiency within the meaning of
Section 412 of the Code, whether or not waived; (c) the aggregate liability for
accrued benefits and other ancillary benefits under each Plan that is or will be
sponsored or maintained by the Borrowers or any ERISA Affiliate (determined on
the basis of the actuarial assumptions prescribed for valuing benefits under
terminating single-employer defined benefit plans under Title IV of ERISA) does
not exceed the aggregate fair market value of the assets under each such defined
benefit pension Plan; (d) the aggregate liability of the Borrowers and each
ERISA Affiliate arising out of or relating to a failure of any Plan to comply
with the provisions of ERISA or the Code, will not have a Material Adverse
Effect; and (e) there does not exist any unfunded liability (determined on the
basis of actuarial assumptions utilized by the actuary for the plan in preparing
the most recent Annual Report) of the Borrowers or any ERISA Affiliate under any
plan, program or arrangement providing post-retirement life or health benefits.
3.6 Financial Statements. The consolidated financial statements of
▇▇▇▇▇▇ as of and for the Fiscal Years ending December 31, 1998 and December 31,
1997, consisting of a balance sheet, a statement of operations, a statement of
shareholders' equity, a statement of cash flows and accompanying footnotes, and
the interim consolidated and consolidating financial statements of ▇▇▇▇▇▇ as of
September 30, 1999 furnished to the Banks in connection herewith, present
fairly, in all material respects, the financial position, results of operations
and operating statistics of the Borrowers as of the dates and for the periods
referred to, in conformity with GAAP. Except as set forth on Schedule 1 hereto,
there are no liabilities, fixed or contingent, which are not reflected
32
in such financial statements, other than liabilities which are not required to
be reflected in such balance sheets.
3.7 No Material Adverse Change. Since December 31, 1998, there has been
no Material Adverse Change.
3.8 Not in Default, Judgments, Etc. No Event of Default or Potential
Default under any Loan Document has occurred and is continuing. The Borrowers
have satisfied all judgments (other than judgments which do not constitute an
Event of Default under Section 8.1(f)), and are not in default under any order,
writ, injunction, or decree of any court, arbitrator, or federal, state,
municipal, or other governmental authority, commission, board bureau, agency, or
instrumentality, domestic or foreign.
3.9 Taxes. The Borrowers have filed all federal, state, local and
foreign tax returns and reports which they are required by law to file and as to
which their failure to file would have a Material Adverse Effect, and have paid
all taxes, including wage taxes, assessments, withholdings and other
governmental charges which are presently due and payable, other than those being
contested in good faith by appropriate proceedings, if any, and disclosed on
Schedule 1. The tax charges, accruals and reserves on the books of the Borrowers
are adequate to pay all such taxes that have accrued but are not presently due
and payable.
3.10 Permits, Licenses, Etc. The Borrowers possess all permits,
licenses, franchises, trademarks, trade names, copyrights and patents necessary
to the conduct of their businesses as presently conducted or as presently
proposed to be conducted, except where the failure to possess the same would not
have a Material Adverse Effect.
3.11 No Materially Adverse Contracts, Etc. To the best of their
knowledge, the Borrowers are not subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation which in
the judgment of their directors or officers has or is expected in the future to
have a Material Adverse Effect. The Borrowers are not a party to any contract or
agreement which in the judgment of their directors or officers has or is
expected to have any Material Adverse Effect, except as otherwise reflected in
adequate reserves.
3.12 Compliance with Laws, Etc.
(a) Compliance Generally. The Borrowers are in compliance in all
material respects with all Regulations applicable to their business (including
obtaining all authorizations, consents, approvals, orders, licenses, exemptions
from, and making all filings or registrations or qualifications with, any court
or governmental department, public body or authority, commission, board, bureau,
agency, or instrumentality), the noncompliance with which reasonably would
likely have a Material Adverse Effect.
(b) Hazardous Wastes, Substances and Petroleum Products. The Borrowers
received all permits and filed all notifications necessary to carry on their
business; and are in compliance in all material respects with all Environmental
Control Statutes. The Borrowers have not given any written or oral notice, nor
have they failed to give required notice, to the Environmental Protection Agency
("EPA") or any state or local agency with regard to any actual or imminently
threatened Release of Hazardous Substances on properties owned, leased or
operated by them or
33
used in connection with the conduct of their business and operations. The.
Borrowers have not received notice that they are potentially responsible for
costs of clean-up or remediation of any actual or imminently threatened Release
of Hazardous Substances pursuant to any Environmental Control Statute. To the
best of the Borrowers' knowledge, no real property owned or leased by them is in
violation of any Environmental Laws and no Hazardous Substances are present on
said real property in violation of applicable law. The Borrowers have not
received any notice to the effect that they have been identified in any
litigation, administrative proceedings or investigation as a potentially
responsible party for any liability under any Environmental Laws. In the event
that either Borrower becomes aware of any information indicating that either (i)
any real property owned or leased by either Borrower is in violation of any
Environmental Laws or any Hazardous Substances are present on said real property
in violation of applicable law, or (ii) either Borrower has been identified in
any litigation, administrative proceedings or investigation as a potentially
responsible party for liability under any Environmental Laws, then the Borrowers
shall update their representations, in accordance with the requirements of
Section 3.20, and the Banks shall not be required to make further Loans or
Standby Letters of Credit under this Credit Facility until the Borrowers
establish adequate reserves (in the reasonable judgment of the Majority Banks)
for any liability (including cleanup costs) and deliver revised financial
statements to the Banks showing such reserves; provided, however, that no
reserve shall be required for any such liabilities to the extent that they
aggregate to less than $1,000,000.
3.13 Solvency. The Borrowers are, and after giving effect to the
transactions contemplated hereby, will be, Solvent.
3.14 Subsidiaries, Etc. The Borrowers do not have any Subsidiaries,
except as set forth in Schedule 1 hereto. Set forth in Schedule 1 hereto is a
complete and correct list, as of the date of this Agreement, of all Investments
held by the Borrowers in any joint venture or other Person.
3.15 Title to Properties, Leases. The Borrowers have good and
marketable title to all assets and properties reflected as being owned by them
in their financial statements as well as to all assets and properties acquired
since said date (except property disposed of since said date in the ordinary
course of business). Except for the Liens existing on the Closing Date as set
forth in Schedule 1 hereto and any other Permitted Liens, there are no Liens on
any of such assets or properties. They have the right to, and do, enjoy peaceful
and undisturbed possession under all material leases under which they are
leasing property as a lessee. All such leases are valid, subsisting and in full
force and effect, and none of such leases is in default, except where such
default, either individually or in the aggregate, could not have a Material
Adverse Effect.
3.16 Public Utility Holding Company; Investment Company. Neither ▇▇▇▇▇▇
nor WASI is a "public utility company" or a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended; or a "public utility"
within the meaning of the Federal Power Act, as amended. Further, neither ▇▇▇▇▇▇
nor WASI is an "investment company" or an "affiliated person" of an "investment
company" or a company "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
34
3.17 Margin Stock. The Borrowers are not and will not be engaged
principally or as one of their important activities in the business of extending
credit for the purpose of purchasing or carrying or trading in any margin stocks
or margin securities (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System as amended from time to time). Neither
will they use or permit any proceeds of the Loans or Standby Letters of Credit
to be used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying margin stocks or margin
securities.
3.18 Use of Proceeds. The Borrowers will use the proceeds of any Loan
or Standby Letter of Credit to be made pursuant hereto for the purchase and
refinancing of Equipment as contemplated herein, as well as for working capital
and general corporate purposes.
3.19 Depreciation Policies. The Borrowers' depreciation policies with
respect to the Equipment are as set forth on Exhibit H. These policies have been
in effect substantially without change since January 1, 1997.
3.20 Disclosure Generally. The representations and statements made by
the Borrowers or on their behalf in connection with this Credit Facility and the
Loans, including representations and statements in each of the Loan Documents,
do not and will not contain any untrue statement of a material fact or omit to
state a material fact or any fact necessary to make the representations made not
materially misleading. No written information, exhibit, report, brochure or
financial statement furnished by the Borrowers to the Banks in connection with
this Credit Facility, the Loans, or any Loan Document contains or will contain
any material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
Notwithstanding anything to the contrary in this Agreement, the Disclosure
Schedule (Schedule 1) to this Agreement shall be promptly updated by the
Borrowers whenever necessary to reflect events that have occurred which would
make the latest Disclosure Schedule delivered by the Borrowers to the Banks
inaccurate or misleading; provided, however, that no updating of the Disclosure
Schedule shall operate to: (i) cure a breach of a representation or warranty
previously made by any Borrower or Guarantor; (ii) modify any of the covenants
or obligations of any Borrower or Guarantor under this Agreement or any other
Loan Document (including any affirmative covenants, negative covenants or
financial covenants); (iii) prevent the occurrence of the disclosed event from
constituting a Potential Default or Event of Default if the occurrence of such
event otherwise constitutes a Potential Default or Event of Default under this
Agreement or any other Loan Document; or (iv) expand the definitions of
"Existing Debt" or "Permitted Liens" allowed under this Agreement.
3.21 Year 2000. The Borrowers have taken all action reasonably
necessary to assess the risk that the computer applications they use in their
business may be unable to properly. perform date sensitive functions on or after
December 31, 1999. The Borrowers have taken all remedial action reasonably
necessary to avoid such risk.
35
SECTION 4.
CONDITIONS PRECEDENT
4.1 All Loans and Standby Letters of Credit. The obligation of each
Bank to make any Loan or the Administrative Agent to issue any Standby Letter of
Credit is conditioned upon the following:
(a) Request For Advance. The Borrowers shall have delivered and the
Administrative Agent shall have received a Request for Advance, or, in the case
of a Standby Letter of Credit, a completed letter of credit application, in each
case in such form as the Administrative Agent may request from time to time.
(b) Borrowing Base Certificate. The Borrowers shall have delivered and
the Banks shall have received a Borrowing Base Certificate dated the date of the
Loan or Standby Letter of Credit requested under this Agreement.
(c) Guaranty. Each Restricted Subsidiary shall have duly authorized,
executed and delivered a Guaranty in the form of Exhibit J hereto and such
Guaranty shall be in full force and effect.
(d) Additional Documents. With respect to each Lease (other than an
Existing Lease Transaction or a Lease to WLFC (Ireland) Limited) to a lessee
domiciled or principally located in a non-U.S. jurisdiction which is to be
included in the Borrowing Base, the Administrative Agent shall have received (x)
the documentation (including, without limitation, the applicable Owner Trustee
Guarantees, Owner Trustee Mortgages, Trust Agreements and Beneficial Interest
Pledge Agreements) set forth in the definition of "Eligible Lease", and (y) if
the Lease is to proceed on the basis that the limitation expressed in subclause
(x) of the definition of "Borrowing Base" is inapplicable because the lessee's
domicile or principal location is within a Nonrecognition of Rights Jurisdiction
evidence in each instance in form and substance reasonably satisfactory to the
Administrative Agent of the basis upon which such domicile or principal location
is to be excluded from the definition of "Nonrecognition of Rights
Jurisdictions". With respect to each Lease (other than an Existing Lease
Transaction) to WLFC (Ireland) Limited in which the sublessee is domiciled or
principally located in a non-U.S. jurisdiction, and which is to be included in
the Borrowing Base, the Administrative Agent shall have received, if the
sublease is to proceed on the basis that the limitation expressed in subclause
(x) of the definition of "Borrowing Base" is inapplicable because the lessee's
domicile or principal location is within a Nonrecognition of Rights
Jurisdiction, evidence in each instance in form and substance reasonably
satisfactory to the Administrative Agent of the basis upon which such domicile
or principal location is to be excluded from the definition of "Nonrecognition
of Rights Jurisdictions".
(e) Covenants; Representations. The Borrowers and each Owner Trustee
shall be in compliance with all covenants, agreements and conditions in each
Loan Document and each representation and warranty contained in each Loan
Document and made by a Borrower or an Owner Trustee shall be true with the same
effect as if such representation or warranty had been
36
made on the date such Loan or Standby Letter of Credit, as applicable, is made
or issued, except to the extent such representation or warranty relates to a
specific prior date.
(f) Defaults. Immediately prior to and after giving effect to such
transaction, no Event of Default or Potential Default shall exist.
(g) Material Adverse Change. Since December 31, 1998, there shall not
have been any Material Adverse Change.
(h) Owner Trustee Documents. The Administrative Agent shall have
received (i) a copy of the resolutions of the Board of Directors of the Owner
Trustee, in its individual capacity, certified by the Secretary or an Assistant
Secretary of the Owner Trustee, duly authorizing the execution, delivery and
performance by the Owner Trustee of each of the Loan Documents to which the
Owner Trustee is or will be a party; (ii) an incumbency certificate of Owner
Trustee, as to the persons authorized to execute and deliver the Loan Documents
to which it is or will be a party and the signatures of such person or persons;
and (iii) a legal opinion of counsel to the Owner Trustee with respect to the
due authorization, execution and delivery by the Owner Trustee of the Loan
Documents to which it is or will be a party.
4.2 Conditions to Effective Date. The effectiveness of this Amended and
Restated Credit Agreement as to each Bank is conditioned upon the following:
(a) Articles, Bylaws. The Administrative Agent shall have received
copies of the Articles or Certificate of Incorporation and Bylaws of each
Borrower certified by its Corporate Secretary or Secretary; together with
Certificate of Good Standing from any jurisdiction where the nature of its
business or the ownership of its properties requires such qualification except
where the failure to be so qualified would not have a Material Adverse Effect.
(b) Evidence of Authorization. The Administrative Agent shall have
received copies certified by the Secretary or Assistant Secretary of each
Borrower or any other appropriate official (in the case of a Person other than a
Borrower) of all corporate or other action taken by each Person other than the
Banks who is a party to any Loan Document to authorize its execution and
delivery and performance of the Loan Documents and to authorize the Loans,
together with such other related papers as the Administrative Agent shall
reasonably require.
(c) Legal Opinions. The Administrative Agent shall have received a
favorable written opinion dated the Effective Date in form and substance
satisfactory, and from counsel reasonably acceptable, to the Banks which shall
be addressed to the Banks.
(d) Incumbency. The Administrative Agent shall have received a
certificate signed by the secretary or assistant secretary of each Borrower,
together with the true signature of the officer or officers authorized to
execute and deliver the Loan Documents and certificates thereunder, upon which
the Banks shall be entitled to rely conclusively until they shall have received
a further certificate of the secretary or assistant secretary of each Borrower
amending the prior certificate and submitting the signature of the officer or
officers named in the new certificate as being authorized to execute and deliver
Loan Documents and certificates thereunder.
37
(e) Notes. Each Bank shall have received its Revolving Credit Note
dated the Closing Date duly executed, completed and issued in accordance
herewith.
(f) Documents. The Administrative Agent shall have received all
certificates, instruments and other documents then required to be delivered to
the Administrative Agent pursuant to any Loan Documents, in each instance in
form and substance reasonably satisfactory to it.
(g) Consents. Each Borrower shall have provided to each Bank evidence
satisfactory to the Banks that all governmental, shareholder and third party
consents and approvals necessary in connection with the transactions
contemplated hereby have been obtained and remain in effect.
(h) Other Agreements. The Borrowers and each Owner Trustee shall have
executed and delivered each other Loan Document required hereunder including,
without limitation, the Security Agreement and the Mortgage.
(i) Security Interest. The Borrowers shall furnish evidence
satisfactory to the Banks that the Administrative Agent holds a perfected,
first-priority lien against all Collateral, except for Collateral specifically
listed on Schedule 2 hereto.
(j) Appraisals. The Agents shall have received asset appraisals
regarding the Equipment portfolio, in form and substance reasonably satisfactory
to the Agents.
(k) Financial Statements. The Agents shall have received (i) the
consolidated financial statements of the ▇▇▇▇▇▇ Companies for the Fiscal Years
ended December 31, 1997 and December 31, 1998, including balance sheets, income
and cash-flow statements, audited by independent public accountants of
recognized national standing, and prepared in conformity with GAAP; and (ii)
interim quarterly financial statements for the period ending September 30, 1999.
(l) Litigation. There shall be no actions, suits, investigations or
proceedings pending or threatened in any court or before any arbitrator or
governmental authority that could have a Material Adverse Effect.
(m) Syndication. There shall have been no adverse disruption or change
in the financial or capital markets which the Agents, in their sole reasonable
discretion, shall deem to be material in connection with the syndication of this
Credit Facility.
(n) Facility Fee. The Borrowers shall have paid to the Administrative
Agent the Facility Fee. Promptly after receipt of the Facility Fee, the
Administrative Agent shall distribute to the Banks their respective share of the
Facility Fee.
(o) Fees, Expenses. The Borrowers shall simultaneously pay or shall
have paid all fees and expenses, if any, due hereunder or under any other Loan
Document.
(p) Other Documents and Information. The Agents and the Banks shall
have received copies of all other documents and information as they shall have
reasonably requested, each in form and substance satisfactory to the Agents and
the Banks.
38
SECTION 5.
AFFIRMATIVE COVENANTS
The Borrowers covenant and agree, individually and collectively, that,
without the prior written consent of Majority Banks, from and after the date
hereof and so long as the Revolving Loan Commitments or any Term Loans are in
effect or any Obligation remains unpaid or outstanding, they and each of them
will:
5.1 Financial Statements and Reports. Furnish to the Banks the
following financial information:
(a) Annual Statements. No later than one hundred and twenty (120) days
after the end of each Fiscal Year, the consolidated and consolidating balance
sheet of the ▇▇▇▇▇▇ Companies as of the end of such year and the prior year in
comparative form, and related statements of operations, shareholders' equity,
and cash flows for such Fiscal Year and the prior Fiscal Year in comparative
form. The financial statements shall be in reasonable detail with appropriate
notes, and shall be prepared in accordance with GAAP. The consolidated annual
financial statements shall be certified (without any qualification or exception)
by KPMG Peat Marwick LLP or other independent public accountants reasonably
acceptable to the Majority Banks. Such financial statements shall be accompanied
by a report of such independent certified public accountants stating that, in
the opinion of such accountants, such financial statements present fairly, in
all material respects, the financial position, and the results of operations and
the cash flows of the ▇▇▇▇▇▇ Companies for the period then ended in conformity
with GAAP, except for inconsistencies resulting from changes in accounting
principles and methods agreed to by such accountants and specified in such
report, and that, in the case of such financial statements, the examination by
such accountants of such financial statements has been made in accordance with
generally accepted auditing standards and accordingly included examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and assessing the accounting principles used and significant
estimates made, as well as evaluating the overall financial statement
presentation. Each financial statement provided under this subsection (a) shall
be accompanied by a certificate signed by such accountants either stating that
during the course of their examination nothing came to their attention which
would cause them to believe that any event has occurred and is continuing which
constitutes an Event of Default or Potential Default, or describing each such
event. In addition to the annual financial statements, the Borrowers shall,
promptly upon receipt thereof, furnish to the Banks a copy of the portion of
each other report or management letter submitted to its board of directors by
its independent accountants in connection with any annual, interim or special
audit made by them of the financial records of the Borrowers in which the
Borrowers' accountants give any comment critical of the valuation of, or
controls or procedures related to, the Collateral.
(b) Quarterly Statements. No later than forty-five (45) calendar days
after the end of each Fiscal Quarter of each Fiscal Year, the consolidated and
consolidating balance sheet and related statements of operations, shareholders'
equity and cash flows of the ▇▇▇▇▇▇ Companies for such quarterly period and for
the period from the beginning of such fiscal year to the end of such Fiscal
Quarter and a corresponding financial statement for the same periods in the
preceding Fiscal Year certified by the chief financial officer, chief
administrative officer, chief executive
39
officer, treasurer or controller of the ▇▇▇▇▇▇ Companies as having been prepared
in accordance with GAAP (subject to changes resulting from audits, year-end
adjustments, and the absence of footnotes); provided, however, that if the
independent certified public accountants issue a review report on the quarterly
financial statements of the ▇▇▇▇▇▇ Companies, the financial statements required
by this subsection (b) shall be accompanied by a certificate signed by such
accountants either stating that during the course of their examination nothing
came to their attention which would cause them to believe that any event has
occurred and is continuing which constitutes an Event of Default or Potential
Default, or describing each such event and the remedial steps being taken by the
Borrowers. Such quarterly statement shall be accompanied by a Compliance
Certificate in the form attached hereto as Exhibit G or such other form as the
Administrative Agent shall reasonably request.
(c) No Default. Within forty-five (45) calendar days after the end of
each of the first three Fiscal Quarters of each Fiscal Year and within one
hundred and twenty (120) calendar days after the end of each Fiscal Year, a
certificate signed by the chief financial officer, chief administrative officer,
chief executive officer, treasurer or controller of the ▇▇▇▇▇▇ Companies
certifying that, to the best of such officer's knowledge, after due inquiry, (i)
each Borrower has complied with all covenants, agreements and conditions in each
Loan Document and that each representation and warranty contained in each Loan
Document is true and correct with the same effect as though each such
representation and warranty had been made on the date of such certificate
(except (A) to the extent such representation or warranty relates to a specific
prior date, in which case the representation shall be updated by the Borrower to
reflect any changes occurring since that prior date, or (B) to the extent that
any events have occurred that require a change to the Disclosure Schedule, in
which case an updated Disclosure Schedule will be delivered by the Borrowers in
accordance with the requirements of Section 3.20 hereof), and (ii) no event has
occurred and is continuing which constitutes an Event of Default or Potential
Default, or describing each such event and the remedial steps being taken by the
Borrowers, as applicable.
(d) ERISA. All reports and forms filed with respect to all Plans,
except as filed in the normal course of business and that would not result in an
adverse action to be taken under ERISA, and details of related information of a
Reportable Event, promptly following each filing.
(e) Material Changes. Notification to the Administrative Agent and each
other Bank of any litigation, administrative proceeding, investigation, business
development, or change in financial condition which could reasonably have a
Material Adverse Effect, promptly following its discovery.
(f) Other Information. Promptly, upon request by the Administrative
Agent and each other Bank, from time to time (which may be on a monthly or other
basis), the Borrowers shall provide such other information and reports regarding
its operations, business affairs, prospects and financial condition as the
Administrative Agent or any Bank may reasonably request.
(g) Borrowing Base Certificates; Monthly Lease Report. In the event the
Borrowers shall not have delivered a Borrowing Base Certificate to the Banks
during any calendar month, they will deliver to the Banks, no later than 15 days
after the end of such calendar month as of the last day of such calendar month,
a Borrowing Base Certificate. As part of the Borrowing Base
40
Certificate, the Borrowers shall deliver to the Banks a report setting forth the
items of Collateral that are subject to a Lease. The Borrowing Base Certificate
shall also include a list of all Engines acquired by the Borrowers since the
date of the last Borrowing Base Certificate delivered to the Banks. The
Borrowing Base Certificate shall also include any changes to the information
contained in Section 1 of Schedule 1 to the Security Agreement.
(h) Monthly Lease Portfolio and Receivables Report. As soon as
practicable and in any event within 15 days after the end of each calendar
month, the Borrowers will deliver to the Banks a Lease portfolio listing and
Lease receivables aging report (in form and substance reasonably satisfactory to
the Administrative Agent).
(i) Maintenance of Current Depreciation Policies. The Borrowers shall
maintain its method of depreciating its assets substantially consistent with
past practices as set forth in Exhibit H and will promptly notify the Banks of
any deviation from such practices.
5.2 Corporate Existence. Preserve their corporate existence and all
material franchises, licenses, patents, copyrights, trademarks and trade names
consistent with good business practice; and maintain, keep, and preserve all of
their properties (tangible and intangible) necessary or useful in the conduct of
their business in good working order and condition, ordinary wear and tear
excepted.
5.3 ERISA. Comply in all material respects with the provisions of ERISA
to the extent applicable to any Plan maintained for the employees of the
Borrowers or any ERISA Affiliate; do or cause to be done all such acts and
things that are required to maintain the qualified status of each Plan and tax
exempt status of each trust forming part of such Plan; not incur any material
accumulated funding deficiency (within the meaning of ERISA and the regulations
promulgated thereunder), or any material liability to the PBGC (as established
by ERISA); not permit any event to occur as described in Section 4042 of ERISA
or which may result in the imposition of a lien on their properties or assets;
notify the Banks in writing promptly after it has come to the attention of
senior management of either Borrower of the assertion or threat of any
Reportable Event or other event described in Section 4042 of ERISA (relating to
the soundness of a Plan) or the PBGC's ability to assert a material liability
against either Borrower or impose a lien on their, or any ERISA Affiliates',
properties or assets; and refrain from engaging in any Prohibited Transactions
or actions causing possible liability under Section 5.02 of ERISA.
5.4 Compliance with Regulations. Comply in all material respects with
all Regulations applicable to their business, the noncompliance with which
reasonably could have a Material Adverse Effect.
5.5 Conduct of Business; Permits and Approvals, Compliance with Laws.
Continue to engage in an efficient and economical manner in a business of the
same general type as conducted by them on the date of this Agreement; maintain
in full force and effect, their franchises, and all licenses, patents,
trademarks, trade names, contracts, permits, approvals and other rights
necessary to the profitable conduct of their business.
5.6 Maintenance of Properties. The Borrowers will maintain or cause to
be maintained in good repair, working order and condition all properties used or
useful in their business and make
41
all reasonable and necessary renewals, replacements, additions, betterments and
improvements thereof and thereto, so that the business carried on in connection
therewith may be conducted in the ordinary course at all times.
5.7 Maintenance of Insurance. Maintain insurance with financially sound
and reputable insurance companies or associations in such amounts and covering
such risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.
5.8 Payment of Taxes, Etc. Promptly pay and discharge (a) all taxes,
assessments, and governmental charges or levies imposed upon them or upon their
income and profits, upon any of their property, real, personal or mixed, or upon
any part thereof, before the same shall become in default; and (b) all lawful
claims for labor, materials and supplies or otherwise, which, if unpaid, might
become a lien or charge upon such property or any part thereof; provided,
however, that so long as the Borrowers first notify the Administrative Agent of
their intention to do so, they shall not be required to pay and discharge any
such tax, assessment, charge, levy or claim so long as the failure to so pay or
discharge does not constitute or result in an Event of Default or a Potential
Default hereunder and so long as no foreclosure or other similar proceedings
shall have been commenced against such property or any part thereof and so long
as the validity thereof shall be contested in good faith by appropriate
proceedings diligently pursued and they shall have set aside on their books
adequate reserves with respect thereto.
5.9 Notice of Events. Promptly upon discovery of any of the following
events, the Borrowers shall provide telephone notice to the Administrative Agent
(confirmed within three (3) calendar days by written notice from the Borrowers
to each Bank) describing the event and all action the Borrowers propose to take
with respect thereto:
(a) an Event of Default or Potential Default under this Agreement or
any other Loan Document;
(b) any default or event of default under a contract or contracts and
the default or event of default involves payments by either or both Borrowers in
an aggregate amount equal to or in excess of $1,000,000;
(c) a default or event of default under or as defined in any evidence
of or agreements for Indebtedness for Borrowed Money under which either or both
Borrowers' liability is equal to or in excess of $1,000,000, singularly or in
the aggregate, whether or not an event of default thereunder has been declared
by any party to such agreement or any event which, upon the lapse of time or the
giving of notice or both, would become an event of default under any such
agreement or instrument or would permit any party to any such instrument or
agreement to terminate or suspend any commitment to lend to either or both
Borrowers or to declare or to cause any such indebtedness to be accelerated or
payable before it would otherwise be due;
(d) the institution of, any material adverse determination in, or the
entry of any default judgment or order or stipulated judgment or order in, any
suit, action, arbitration, administrative proceeding, criminal prosecution or
governmental investigation against either Borrower in which the amount in
controversy is in excess of $1,000,000, singularly or in the aggregate; or
42
(e) any change in any Regulation, including, without limitation,
changes in tax laws and regulations, which would have a Material Adverse Effect.
5.10 Inspection Rights. At any time during the existence of an Event of
Default or Potential Default, during regular business hours and then as often as
requested of the Borrowers, permit the Administrative Agent or any authorized
officer, employee, agent, or representative of the Administrative Agent to
examine and make abstracts from the records and books of account of such
Borrower, wherever located, and to visit the properties of the Borrowers; and to
discuss the affairs, finances, and accounts of each Borrower with its Chairman,
President, any executive vice president, its chief financial officer, treasurer,
controller or independent accountants. If no Event of Default or Potential
Default shall be in existence, the Administrative Agent shall limit such
examination of each of the foregoing to once each calendar year. If an
inspection shall be made during the continuance of a Potential Default or an
Event of Default, the Borrowers shall reimburse the Administrative Agent for its
reasonable out-of-pocket expense of such inspection; otherwise, such expenses
shall be chargeable pro rata to each Bank, in accordance with its respective
Revolving Loan Commitment. At all times, it is understood and agreed by the
Borrowers that all expenses in connection with any such inspection which may be
incurred by the Borrowers, any officers and employees thereof and the attorneys
and independent certified public accountants therefor shall be expenses payable
by the Borrowers and shall not be expenses of the Banks or any of them.
5.11 Generally Accepted Accounting Principles. Maintain books and
records at all times in accordance with Generally Accepted Accounting
Principles.
5.12 Compliance with Material Contracts. The Borrowers will comply in
all material respects with all obligations, terms, conditions and covenants, as
applicable, in all instruments and agreements to which they are a party or by
which they are bound or any of their properties is affected and in respect of
which the failure to comply reasonably could have a Material Adverse Effect.
5.13 Use of Proceeds. The Borrowers will use the proceeds of any Loan
to be made pursuant hereto for the purchase or refinancing of Equipment as
contemplated herein, as well as for working capital and general corporate
purposes.
5.14 Further Assurances. Do such further acts and things and execute
and deliver to the Banks such additional assignments, agreements, powers and
instruments, as any Bank may reasonably require or reasonably deem advisable to
carry into effect the purposes of this Agreement or to better assure and confirm
unto each Bank its rights, powers and remedies hereunder.
5.15 Restricted Subsidiaries. Upon the creation of any Restricted
Subsidiary, or the redesignation of any Unrestricted Subsidiary as a Restricted
Subsidiary, such Restricted Subsidiary shall duly authorize, execute and deliver
a Guaranty in the form of Exhibit J hereto.
5.16 Post-Effective Date Covenants.
(a) Within 30 days of the Effective Date, the Borrowers shall provide
or cause to be provided to the Administrative Agent a certified lien search for
the State of California, and the
43
counties of Marin and San Diego therein, and the State of Arizona indicating
that there are no Liens (other than Permitted Liens) on any property or assets
of the Borrowers or on any income or profits therefrom and certified copies of
any filings made in the county of Maricopa in the State of Arizona.
(b) Within six months of the Effective Date, the Administrative Agent
shall be entitled to arrange for BDO ▇▇▇▇▇▇▇ to perform an audit of the
Equipment and the other Collateral. The Borrowers agree to cooperate in
connection with such audit and to pay all costs and expenses related thereto.
SECTION 6.
NEGATIVE COVENANTS
The Borrowers covenant and agree, individually and collectively, that,
without the prior written consent of the Majority Banks, from and after the date
hereof and so long as any Revolving Loan Commitments or Term Loans are in effect
or any Obligation remains unpaid or outstanding, they and each of them will not:
6.1 Consolidation and Merger. Merge or consolidate with or into any
corporation except, if (a) no Potential Default or Event of Default shall have
occurred and be continuing either immediately prior to or upon the consummation
of such transaction, and (b) a Borrower is the surviving entity. The Borrowers
will promptly notify the Banks of any merger or consolidation involving either
Borrower.
6.2 Liens. Create, assume or permit to exist any Lien on any of its
property or assets, whether now owned or hereafter acquired, or upon any income
or profits therefrom, except Permitted Liens.
6.3 Guarantees. Guarantee or otherwise in any way become or be
responsible for indebtedness or obligations (including working capital
maintenance, take-or-pay contracts) of any unconsolidated Person, contingently
or otherwise. Notwithstanding the preceding sentence, the Borrowers may
guarantee indebtedness or obligations of unconsolidated Affiliates in amounts
not to exceed $15,000,000 in the aggregate in the ordinary course of business
with the prior written consent of the Majority Banks, such consent not to be
unreasonably withheld.
6.4 Margin Stock. Use or permit any proceeds of the Loans or Standby
Letters of Credit to be used, either directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying margin stock
within the meaning of Regulation U of The Board of Governors of the Federal
Reserve System, as amended from time to time.
6.5 Acquisitions and Investments. If an Event of Default or a Potential
Default exists or would exist immediately thereafter: purchase or otherwise
acquire (including without limitation by way of share exchange) any part or
amount of the capital stock or assets of, or make any Investments in any other
Person; or enter into any new business activities or ventures not directly
related to its present business; or create any Subsidiary, except (a) they may
acquire and hold stock, obligations or securities received in settlement of
debts owing to them created in the ordinary course of business, and (b) they may
make and own (i) Investments in certificates of
44
deposit or time deposits having maturities in each case not exceeding one year
from the date of issuance thereof and issued by any Bank, or any FDIC-insured
commercial bank incorporated in the United States or any state thereof having a
combined capital and surplus of not less than $150,000,000, (ii) Investments in
marketable direct obligations issued or unconditionally guaranteed by the United
States of America, any agency thereof, or backed by the full faith and credit of
the United States of America, in each case maturing within one year from the
date of issuance or acquisition thereof, (iii) Investments in commercial paper
issued by a corporation incorporated in the United States or any State thereof
maturing no more than one year from the date of issuance thereof and, at the
time of acquisition, having a rating of A-1 (or better) by Standard & Poor's
Corporation or P-1 (or better) by ▇▇▇▇▇'▇ Investors Service, Inc., and (iv)
Investments in money market mutual funds all of the assets of which are invested
in cash or investments described in the immediately preceding clauses (i), (ii)
and (iii).
6.6 Transfer of Assets; Nature of Business. The Borrowers and their
Restricted Subsidiaries may not sell, transfer, lease or dispose of assets
constituting in the aggregate more than twenty percent (20%) of the net book
value of their combined assets during any twelve month period without the prior
written consent of the Majority Banks, such consent not to be unreasonably
withheld. Notwithstanding the above, but in accordance with the provisions of
Section 5(a) of the Security Agreement: (a) the Borrowers may lease Equipment in
the ordinary course of business, (b) the Borrowers may sell, transfer or
otherwise dispose of Equipment subject to a Lease in the ordinary course of
business, for its then fair market value; (c) the Borrowers may sell, transfer
or otherwise dispose of Equipment that is declared a total loss or destroyed or
that suffers damage that is not economically repairable, for its then fair
market value; (d) the Borrowers may sell, transfer, pledge, assign, lease,
re-lease or otherwise dispose of any Equipment with respect to which the
relevant Lease has expired or is expiring if such sale or disposition is in the
ordinary course of its business, for its then fair market value; (e) the
Borrowers may sell Leases and related Equipment for not less than their net book
value at the time of the transfer in securitization transactions; (f) the
Borrowers may engage in the nonrecourse or partial recourse financing of Leases;
and (g) the Borrowers may sell Parts to non-affiliates in the ordinary course of
business. The Borrowers may not discontinue, liquidate or change in any material
respect any substantial part of their operations or business.
6.7 Accounting Change. Without the prior written approval of the
Majority Banks, make or permit any material change in financial accounting
policies or financial reporting practices, except as required by Generally
Accepted Accounting Principles or regulations of the Securities and Exchange
Commission, if applicable. Notwithstanding the foregoing, without the prior
written approval of all of the Banks, the Borrowers shall not make or permit any
material change in financial accounting policies or financial reporting
practices as they relate to, or in connection with, any current or future
securitizations, except as required by GAAP or regulations of the Securities and
Exchange Commission, if applicable (and in such case, the Borrowers shall
promptly notify the Administrative Agent of the need for such change).
6.8 Transactions with Affiliates. Enter into any material transaction
(including, without limitation, the purchase, sale or exchange of property, the
rendering of any services or the payment of management fees) with any Affiliate,
except transactions in the ordinary course of, and pursuant to the reasonable
requirements of, its business, and in good faith and upon commercially
reasonable terms.
45
6.9 Indebtedness. Unless approved in writing by the Majority Banks, the
Borrowers shall not, and shall not permit their Restricted Subsidiaries to,
create, enter into, or allow to exist any Debt other than (a) obligations
incurred under this Credit Facility; (b) Existing Debt, not to exceed in the
aggregate $65,000,000, provided that there shall be no extensions, renewals or
further advances under any Existing Debt unless they are consistent with this
Section 6.9, part (e); (c) Debt, not to exceed $500,000 in the aggregate, in
connection with the purchase of miscellaneous assets and secured solely by the
assets so acquired; (d) unsecured Debt, not to exceed $1,000,000 in the
aggregate; (e) Other Indebtedness; (f) guarantees permitted under Section 6.3;
(g) Operating Leases; and (h) unsecured (except for a pledge of Shares (as
defined in the Security Agreement) and records related to such Shares of any
Unrestricted Subsidiary) guaranties of the obligations of Restricted and
Unrestricted Subsidiaries.
6.10 Restricted Payments.
Make or pay any redemptions, repurchases, dividends or distributions of
any kind with respect to the capital stock of ▇▇▇▇▇▇.
Redeem or prepay any Debt other than under this Credit Facility
provided, however, that the Borrowers shall be permitted to redeem, prepay, or
refinance existing Debt if such redemption, prepayment, or refinancing (i) is in
the ordinary course of the Borrowers' business, and (ii) no Potential Default or
Event of Default exists prior to or after such refinancing.
6.11 Restriction on Amendment of this Agreement. Enter into or
otherwise become subject to or suffer to exist any agreement which would require
them to obtain the consent of any other person as a condition to the ability of
the Banks and the Borrowers to amend or otherwise modify this Agreement.
6.12 Investments in Unrestricted Subsidiaries. Except for Borrowers'
investment in WLFC Funding Corporation, make or maintain any Investments in
Unrestricted Subsidiaries which exceed in the aggregate 15% of Net Worth of the
Borrowers.
SECTION 7.
FINANCIAL COVENANTS
The Borrowers covenant and agree, individually and collectively that,
without the prior written consent of the Majority Banks, from and after the date
hereof and so long as any Revolving Loan Commitments or Term Loans are in effect
or any Obligation remains unpaid or outstanding, that:
7.1 No Losses. From and after the Effective Date, the ▇▇▇▇▇▇ Companies
shall not at any time suffer a net loss for the then two (2) most recently ended
consecutive Fiscal Quarters.
7.2 Minimum Tangible Net Worth. Tangible Net Worth of the ▇▇▇▇▇▇
Companies will not at any time be less than the sum of: 85% of Tangible Net
Worth calculated as of September 30, 1998; plus 75% of the cumulative Net
Income of the ▇▇▇▇▇▇ Companies for each fiscal quarter earned from and after
September 30, 1998 (without any deduction for net losses for any fiscal
46
quarter); plus 100% of net proceeds of new equity issues completed by ▇▇▇▇▇▇
from and after September 30, 1998.
7.3 Leverage Ratio. From and after the Effective Date, the Leverage
Ratio will not exceed 6.00:1 as of the end of any Fiscal Quarter.
7.4 Senior Debt to Adjusted Tangible Net Worth. From and after the
Effective Date, the ratio of Senior Debt to Adjusted Tangible Net Worth will not
exceed 4.50:1, as of the end of any Fiscal Quarter.
7.5 Minimum Interest Coverage Ratio. From and after the Effective Date,
the Interest Coverage Ratio of the ▇▇▇▇▇▇ Companies (measured at the end of each
Fiscal Quarter on a rolling four-quarter basis) will not be less than 1.20:1,
provided that with respect to each Fiscal Quarter ending on or prior to June 30,
2000, the foregoing Interest Coverage Ratio shall be determined without regard
to the Fiscal Quarter ending September 30, 1999, provided further that in no
event shall the Interest Coverage Ratio of the ▇▇▇▇▇▇ Companies in respect of
any Fiscal Quarter ending on or prior to June 30, 2000 (other than the Fiscal
Quarter ending September 30, 1999) be less than 1.10:1.
7.6 Borrowing Base. The aggregate principal amount of Loans and Standby
Letters of Credit outstanding shall not at any time exceed the Borrowing Base or
the Aggregate Revolving Loan Commitment, whichever is less; provided, however,
that this covenant shall not be deemed breached if, at the time such aggregate
amount exceeds said level, within four Business Days after the earlier of the
date the Borrowers first have knowledge of such excess or the date of the next
Borrowing Base Certificate disclosing the existence of such excess, a prepayment
of Loans (and, if necessary, a cash collateralization of outstanding Standby
Letters of Credit) shall be made. The Borrowers shall not be entitled to utilize
this mechanism to avoid a breach of this covenant more than two (2) times during
any twelve-month period. If the outstanding advances under the Credit Facility
have been converted to Term Loans by virtue and in accordance with the proviso
contained in Section 2.7 as a result of the aggregate outstanding principal
amount of all advances and the face amount of the Standby Letters of Credit
exceeding the total Borrowing Base (such excess being referred to herein as the
"Excess Amount"), then the Borrowers shall not be in breach of the provisions of
this Section 7.6 with respect to such Excess Amount so long as (A) in connection
with each sale of any Eligible Equipment following the date of such conversion
(and until the Borrowers shall be in compliance with the first sentence of the
Section 7.6), there shall be applied towards prepayment of the then outstanding
principal amount of Term Loans an amount equal to the lesser of (i) the net
proceeds of such sale and (ii) the Net Book Value (without regard to clause (ii)
of the definition thereof) of such Equipment, and (B) after giving effect to the
payments made pursuant to (A) above, the amount by which the outstanding Loans
exceed the Borrowing Base shall not be greater than said amount as determined
immediately prior to such sale.
47
SECTION 8.
DEFAULT
8.1 Events of Default. The Borrowers shall be in default if any one or
more of the following events (each an "Event of Default") occurs:
(a) Payments. Either Borrower fails to pay the principal due on any
Note when due and payable (whether at maturity, by notice of intention to
prepay, or otherwise); or fails to pay interest or any other amount payable
hereunder or under any other Loan Document within three Business Days after the
date such interest or other amount is due and payable.
(b) Covenants. Either Borrower or any Owner Trustee, as applicable,
fails to observe or perform: (i) any term, condition or covenant set forth in
Sections 5.1(a), 5.1(b), 5.1(c), 5.1(g), 5.1(h) or 5.1(i), Section 5.2, Section
5.7, Section 5.9, Section 5.10, Section 5.14, Sections 6.1 through 6.12 or
Sections 7.1 through 7.6 herein, as and when required; or (ii) any term,
condition or covenant contained in this Agreement or any other Loan Document,
other than any Event of Default set forth in any other subsection of this
Section 8.1, and other than as set forth in (i) above, as and when required and
such failure shall continue unremedied for a period of 10 Business Days after
the earlier of (1) actual knowledge of any executive officer of the Borrowers or
(2) written notice thereof by the Administrative Agent to the Borrowers.
(c) Representations, Warranties. Any representation or warranty made or
deemed to be made by the Borrowers or any Owner Trustee, as applicable, herein
or in any Loan Document or in any exhibit, schedule, report or certificate
delivered pursuant hereto or thereto shall prove to have been false, misleading
or incorrect in any material respect when made or deemed to have been made.
(d) Bankruptcy. Either Borrower is dissolved or liquidated, makes an
assignment for the benefit of creditors, files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any
receiver or trustee, commences any proceeding relating to itself under any
bankruptcy, reorganization, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, has commenced against it any such proceeding
which remains undismissed for a period of sixty (60) days, or indicates its
consent to, approval of or acquiescence in any such proceeding, or any receiver
of or trustee for either Borrower or any substantial part of its property is
appointed, or if any such receivership or trusteeship to continues undischarged
for a period of sixty (60) days.
(e) Certain Other Defaults. Either or both Borrowers shall fail to pay
when due any Indebtedness for Borrowed Money which singularly or in the
aggregate exceeds $1,000,000, and such failure shall continue beyond any
applicable cure period, or either Borrower shall suffer to exist any default or
event of default in the performance or observance, subject to any applicable
grace period, of any agreement, term, condition or covenant with respect to any
agreement or document relating to Indebtedness for Borrowed Money if the effect
of such default is to permit, with the giving of notice or passage of time or
both, the holders thereof, or any trustee or agent for said holders, to
terminate or suspend any commitment (which is equal to or in excess of
$1,000,000) to lend money or to cause or declare any portion of any borrowings
thereunder to
48
become due and payable prior to the date on which it would otherwise be due and
payable, provided that during any applicable cure period the Bank's obligations
hereunder to make further Loans shall be suspended.
(f) Judgments. Any judgments against either Borrower or against their
assets or property for amounts in excess of $1,000,000 in the aggregate remain
unpaid, unstayed on appeal, undischarged, unbonded and undismissed for a period
of thirty (30) days.
(g) Attachments. Any assets of either Borrower shall be subject to
attachments, levies, or garnishments for amounts in excess of $1,000,000 in the
aggregate which have not been dissolved or satisfied within twenty (20) days
after service of notice thereof to such Borrower.
(h) Change in Control of Either Borrower. Any Change of Control of
either Borrower should occur.
(i) Security Interests. Except for security interests (a) in Collateral
listed on Schedule 2 hereto; (b) in Equipment which the Administrative Agent
determines to include in the Borrowing Base as part of the $10,000,000 basket
for unperfected Collateral or which is specifically approved in writing by the
Majority Banks notwithstanding that the Administrative Agent will not receive a
perfected first priority security interest therein; (c) in Collateral as to
which the Administrative Agent fails to file a UCC continuation statement; and
(d) in Collateral (other than Equipment) as to which perfection is effected by
any means other than by filing a UCC-1 financing statement (the Collateral
described in (a), (b), and (d) above is hereinafter referred to as the "Excepted
Collateral"), any security interest created pursuant to any Loan Document shall
cease to be in full force and effect or shall cease in any material respect to
give the Administrative Agent the Liens, rights, powers and privileges purported
to be created thereby (including, without limitation, a perfected security
interest in, and Lien on, all of the Collateral but subject, in the case of any
Lease to a lessee domiciled or principally located in a non-U.S. jurisdiction,
to the provisos set forth in Section 9.1), superior to and prior to the rights
of all third Persons, and subject to no other Liens (except as permitted by
Section 6.2 and, insofar as the issue of accession may be deemed to affect such
rights or to create any such Lien, except to the extent that the lessee (or, in
the case of a Lease to WLFC (Ireland) Limited, the sublessee) of the Collateral
is domiciled or principally located in a jurisdiction that satisfies one of the
criteria for exclusion from the definition of "Nonrecognition of Rights
Jurisdictions").
THEN and in every such event other than that specified in Section
8.1(d) , the Administrative Agent may, or at the written request of the Majority
Banks shall, immediately terminate the Aggregate Revolving Loan Commitment by
notice in writing to the Borrowers and immediately declare any and all Notes,
including without limitation accrued interest, to be, and they shall thereupon
forthwith become due and payable without presentment, demand, or notice of any
kind, all of which are hereby expressly waived by the Borrowers. Upon the
occurrence of any event specified in Section 8.1(d), the Aggregate Revolving
Loan Commitment shall automatically terminate, the face amount of all
outstanding Standby Letters of Credit shall be paid in cash to the
Administrative Agent as additional Collateral for the Obligations, and the
Notes, including without limitation accrued interest, shall immediately be due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrowers. Any date on which the
Notes and such other Obligations are
49
declared due and payable pursuant to this Section 8.1 shall be the Facility
Termination Date for purposes of this Agreement. From and after the date an
Event of Default shall have occurred and for so long as an Event of Default
shall be continuing, the Loans shall bear interest at the Default Rate.
SECTION 9.
COLLATERAL
9.1 Collateral. Except as otherwise specifically set forth herein
(including but not limited to the exceptions contained in Section 8.1(i)) or in
any other Loan Document, the Borrowers covenant and agree that any Obligations
made and outstanding and their repayment at all times shall be secured by a
first priority perfected security interest in all of the assets of (a) the
Borrowers, (b) WLFC (Ireland) Limited and (c) each Owner Trustee which shall
have executed an Owner Trustee Guarantee, provided that, in the case of clause
(c) above, the Borrowers shall not be required to take any additional steps to
create or perfect any security interest in the related Lease or Equipment under
the laws of the jurisdiction where the lessee under such Lease is domiciled or
principally located, and provided further that with respect to any Existing
Lease Transaction involving a lessee (or, in the case of a Lease to WLFC
(Ireland) Limited, involving a sublessee) domiciled or principally located in a
non-U.S. jurisdiction, Borrowers obligations hereunder shall be limited to those
filings, recordings and/or other actions taken and documentation delivered (or
contemplated to be taken or delivered in the future including, without
limitation, as a result of any change in law) in connection with such Existing
Lease Transaction on or prior to the Effective Date.
9.2 Security Documents. As security for the punctual payment in full of
all Notes (including all payments of principal, and interest and other costs
contemplated hereby) and Standby Letters of Credit, the Borrowers shall execute
and deliver to the Administrative Agent the Security Agreement, the Mortgage and
such other documents as may be necessary to constitute and evidence and perfect
a security interest in the Collateral (other than the Excepted Collateral);
provided, however, that if a Potential Default or Event of Default exists, the
Administrative Agent may require the Borrowers to take all action possible to
further legally perfect the security interest in all assets of the Borrowers and
each Owner Trustee who shall have executed an Owner Trustee Guarantee, except as
otherwise provided in the proviso to Section 9.1(c) of this Agreement or
elsewhere in the Loan Documents, but including Excepted Collateral.
9.3 Release of Collateral. The Borrowers shall be entitled to remove
and request the Administrative Agent to release certain items of Collateral in
accordance with the provisions of Section 5(a) of the Security Agreement. An
Owner Trustee shall be entitled to remove and request the Administrative Agent
to release certain items of collateral under the related Owner Trustee Mortgage
in accordance with the terms of Section 5(a) of the Security Agreement (with
references therein to "Collateral", "Debtors" and "Security Agreement" being
deemed references to the Collateral (as defined in such Owner Trustee Mortgage),
such Owner Trustee and such Owner Trustee Mortgage, respectively). The
Administrative Agent will cooperate with the Borrowers or such Owner Trustee, as
applicable, in effecting any such release.
50
SECTION 10.
THE AGENTS
10.1 Appointment and Authorization. Each Bank hereby irrevocably
appoints and authorizes First Union as the Administrative Agent, BAS as the
Syndication Agent and Bank of America as the Appraisal Agent to take such action
on each Bank's behalf and to exercise such powers under this Agreement and the
Loan Documents as are specifically delegated to the Agents by the terms hereof
or thereof, together with such other powers as are reasonably incidental
thereto. No other agents or co-agents of the Banks under this Credit Facility
may be appointed without the prior written consent of First Union and Bank of
America. The relationship between each Agent and each Bank has no fiduciary
aspects, and each Agent's duties hereunder are acknowledged to be only
ministerial and not involving the exercise of discretion on its part. Nothing in
this Agreement or any Loan Document shall be construed to impose on any Agent
any duties or responsibilities other than those for which express provision is
made herein or therein. In performing their duties and functions under this
Article 10, the Agents do not assume and shall not be deemed to have assumed,
and hereby expressly disclaim, any obligation with or for the Borrowers. As to
matters not expressly provided for in this Agreement or any Loan Document, the
Agents shall not be required to exercise any discretion or to take any action or
communicate any notice, but shall be fully protected in so acting or refraining
from acting upon the instructions of the Majority Banks and their respective
successors and assigns; provided, however, that in no event shall any Agent be
required to take any action which exposes it to personal liability or which is
contrary to this Agreement, any Loan Document or applicable law, and each Agent
shall be fully justified in failing or refusing to take any action hereunder
unless it shall first be specifically indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or omitting to take any such action. If an indemnity furnished
to any Agents for any purpose shall, in its reasonable opinion, be insufficient
or become impaired, such Agent may call for additional indemnity from the Banks
and not commence or cease to do the acts for which such indemnity is requested
until such additional indemnity is furnished.
10.2 Duties and Obligations. In performing its functions and duties
hereunder on behalf of the Banks, each Agent shall exercise the same care and
skill as it would exercise in dealing with loans for its own account. Neither
Agent, nor any of its directors, officers, employees or other agents shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any Loan Document except for its or their own
gross negligence or willful misconduct. Without limiting the generality of the
foregoing, each Agent (a) may consult with legal counsel and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith and in accordance with the advice of such experts; (b)
makes no representation or warranty to any Bank as to, and shall not be
responsible to any Bank for, any recital, statement, representation or warranty
made in or in connection with this Agreement, any Loan Document or in any
written or oral statement (including a financial or other such statement),
instrument or other document delivered in connection herewith or therewith or
furnished to any Bank by or on behalf of the Borrowers; (c) shall have no duty
to ascertain or inquire into the Borrowers' performance or observance of any of
the covenants or conditions contained herein or to inspect any of the property
(including the books and records) of the Borrowers or inquire into the use of
the proceeds of the Revolving Loans or Term Loans or
51
(unless the officers of the Agent active in their capacity as officers of such
Agent on the Borrowers' account have actual knowledge thereof or have been
notified in writing thereof) to inquire into the existence or possible existence
of any Event of Default or Potential Default; (d) shall not be responsible to
any Bank for the due execution, legality, validity, enforceability,
effectiveness, genuineness, sufficiency, collectibility or value of this
Agreement or any other Loan Document or any instrument or document executed or
issued pursuant hereto or in connection herewith, except to the extent that such
may be dependent on the due authorization and execution by the Agent itself; (e)
except as expressly provided herein in respect of information and data furnished
to any Agent for distribution to the Banks, shall have no duty or
responsibility, either initially or on a continuing basis, to provide to any
Bank any credit or other information with respect to the Borrowers, whether
coming into its possession before the making of the Loans or at any time or
times thereafter; and (f) shall incur no liability under or in respect of this
Agreement or any other Loan Document for, and shall be entitled to rely and act
upon, any notice, consent, certificate or other instrument or writing (which may
be by facsimile (telecopier), telegram, cable, or other electronic means)
believed by it to be genuine and correct and to have been signed or sent by the
proper party or parties.
10.3 The Agents as Banks. With respect to its Revolving Loan Commitment
and the Loans made and to be made by it, each Agent shall have the same rights
and powers under this Agreement and all other Loan Documents as the other Banks
and may exercise the same as if it were not an Agent. The terms "Bank" and
"Banks" as used herein shall, unless otherwise expressly indicated, include
First Union and Bank of America in their individual capacity. First Union and
any successor Administrative Agent, and Bank of America and any successor
Appraisal Agent, which is a commercial bank, and their respective affiliates,
may accept deposits from, lend money to, act as trustee under indentures of and
generally engage in any kind of business with, the Borrowers and their
affiliates from time to time, all as if such entity were not the Administrative
Agent or Appraisal Agent hereunder and without any duty to account therefor to
any Bank.
10.4 Independent Credit Decisions. Each Bank acknowledges to the Agents
that it has, independently and without reliance upon the Agents or any other
Bank, and based upon such documents and information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement. Each Bank also acknowledges that it will, independently or
through other advisers and representatives but without reliance upon the Agents
or any other Bank, and based upon such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or refraining from taking any action under this Agreement or any Loan
Document.
10.5 Indemnification. The Banks agree to indemnify each Agent (to the
extent not previously reimbursed by the Borrowers), ratably in proportion to
each Bank's Revolving Loan Commitment Percentage, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against First Union in its capacity as
Administrative Agent, or against Bank of America in its capacity as Appraisal
Agent, in any way relating to or arising out of this Agreement or any Loan
Document or any action taken or omitted to be taken by First Union in its
capacity as Administrative Agent, or Bank of America in its capacity as
Appraisal Agent, hereunder or under any Loan Document; provided that none
52
of the Banks shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from any Agent's gross negligence or willful misconduct.
Without limiting the generality of the foregoing, each Bank agrees to reimburse
the Agents, promptly on demand, for such Bank's ratable share (based upon the
aforesaid apportionment) of any out-of-pocket expenses (including counsel fees
and disbursements) incurred by such Agent in connection with the preparation,
execution, administration or enforcement of, or the preservation of any rights
under, this Agreement and the Loan Documents to the extent that such Agent is
not reimbursed for such expenses by the Borrowers.
10.6 Successor Agents. The Syndication Agent or the Appraisal Agent may
resign upon 30 days written notice to the Borrowers and the Administrative
Agent. Any Agent may resign at any time by giving written notice of such
resignation to the Banks and the Borrowers, such resignation to be effective
only upon the appointment of a successor Agent as hereinafter provided. Upon any
such notice of resignation, the Banks shall jointly appoint a successor Agent
upon written notice to the Borrowers and the withdrawing Agent, and provided
that no Potential Default or Event of Default exists, the Borrowers shall have
the right to consent to such appointment (which consent shall not be
unreasonably withheld or delayed). If no successor Agent shall have been jointly
appointed by such Banks (and, if required, consented to by the Borrowers) and
shall have accepted such appointment within thirty (30) days after the
withdrawing Agent shall have given notice of resignation, the Administrative
Agent may, upon notice to the Borrowers and the Banks, appoint a successor
Agent. Upon its acceptance of any appointment as Agent hereunder, the successor
Agent shall succeed to and become vested with all the rights, powers, privileges
and duties of its predecessor, and the withdrawing Agent shall be discharged
from its duties and obligations as Agent under this Agreement and the Loan
Documents. After an Agent's resignation hereunder, the provisions hereof shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent under this Agreement and the Loan Documents.
10.7 Allocations Made By the Administrative Agent. As between the
Administrative Agent and the Banks, unless a Bank objecting to a determination
or allocation made by the Administrative Agent pursuant to this Agreement
delivers to the Administrative Agent written notice of such objection within one
hundred twenty (120) days after the date any distribution was made by the
Administrative Agent, such determination or allocation shall be conclusive on
such one hundred twentieth day and only those items expressly objected to in
such notice shall be deemed disputed by such Bank. The Administrative Agent
shall not have any duty to inquire as to the application by the Banks of any
amounts distributed to them.
SECTION 11.
MISCELLANEOUS
11.1 Waiver. No failure or delay on the part of any Agent or any Bank
or any holder of any Note in exercising any right, power or remedy under any
Loan Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy
53
under any Loan Document. The remedies provided under the Loan Documents are
cumulative and not exclusive of any remedies provided by law.
11.2 Amendments. No amendment, modification, termination, renewal or
waiver of any Loan Document or any provision thereof nor any consent to any
departure by the Borrowers therefrom shall be effective unless the same shall
have been approved by the Majority Banks, be in writing and be signed by First
Union, as Administrative Agent on behalf of the Banks, and then any such waiver
or consent shall be effective only in the instance and for the specific purpose
for which given, provided, however, that unanimous written consent of all of the
Banks shall be required for: (a) any increase in the amount of the Aggregate
Revolving Loan Commitment; (b) any reduction in principal, interest, or fees
payable by Borrowers under this Credit Facility; (c) any extension of the
Revolving Loan Termination Date or the maturity dates of any Term Loans; (d) any
extension of the due date for payment of any principal, interest or fees to be
collected on behalf of the Banks; (e) any release of all or substantially all of
the Collateral (provided, however, that the Administrative Agent, acting alone,
shall be entitled to release less than all or substantially all of the
Collateral pursuant to Section 9.3); or (f) the release of any Guarantor. In
addition to the foregoing, no modification to the definition of "Borrowing Base"
shall be made without the written consent of the Required Banks, and none of the
voting rights established under this Section 11.2 shall be modified without the
written consent of that number of Banks which would have been required to take
the action to which such voting rights apply. No notice to or demand on the
Borrowers shall entitle the Borrowers to any other or further notice or demand
in similar or other circumstances. No amendment or modification affecting the
role of any Agent or Agents shall be effective unless it has been approved in
writing by such Agent or Agents, as applicable.
11.3 Governing Law. The Loan Documents and all rights and obligations
of the parties thereunder shall be governed by and be construed and enforced in
accordance with the laws of the State of California without regard to California
or federal principles of conflict of laws.
11.4 Participations and Assignments. The Borrowers hereby acknowledge
and agree that so long as a Bank is not in default of its obligations under this
Agreement, such Bank may at any time, with the consent (which consent shall not
be unreasonably withheld) of the Borrowers and the Administrative Agent and the
Appraisal Agent: (a) grant participations in all or any portion of its Revolving
Loan Commitment or any portion of its Note(s) or of its right, title and
interest therein or in or to this Agreement (collectively, "Participations") to
any other lending office of such Bank or to any other bank, lending institution
or other entity which has the requisite sophistication to evaluate the merits
and risks of investments in Participations ("Participants"); provided, however,
that: (i) all amounts payable by the Borrowers hereunder shall be determined as
if such Bank had not granted such Participation; (ii) such Bank shall act as
agent for all Participants; and (iii) any agreement pursuant to which such Bank
may grant a Participation: (x) shall provide that such Bank shall retain the
sole right and responsibility to enforce the obligations of the Borrowers
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provisions of this Agreement; (y) such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement without the consent of the
Participant if such modification, amendment or waiver would reduce the principal
of or rate of interest on any Loan or postpone the date fixed for any payment of
principal of or interest on any Loan; and (z) shall not relieve such Bank from
54
its obligations, which shall remain absolute, to make Loans hereunder; and (b)
assign any of its Loans and its Revolving Loan Commitment. Upon execution and
delivery by the assignee to the Borrowers of an instrument in writing pursuant
to which such assignee agrees to become a "Bank" hereunder having the Revolving
Loan Commitment and Loans specified in such instrument, and upon consent thereto
by the Borrowers and the Administrative Agent and the Appraisal Agent, to the
extent required above, the assignee shall have, to the extent of such assignment
(unless otherwise provided in such assignment with the consent of the
Borrowers), the obligations, rights and benefits of a Bank hereunder holding the
Revolving Loan Commitment and Loans (or portions thereof) assigned to it, and
such Bank shall, to the extent of such assignment, be released from the
Revolving Loan Commitment (or portion(s) thereof) so assigned. An assignment fee
of $3,500 shall be paid by the assigning Bank to the Administrative Agent upon
consummation of any assignment, including an assignment from one Bank to another
Bank. No assignments will be permitted by a Bank at a time when such Bank is in
default of its obligations under this Agreement. Notwithstanding anything to the
contrary in this Section 11.4, the Borrowers shall not have the right to approve
any assignment or Participation by a Bank if a Potential Default or an Event of
Default then exists.
11.5 Captions. Captions in the Loan Documents are included for
convenience of reference only and shall not constitute a part of any Loan
Document for any other purpose.
11.6 Notices. All notices, requests, demands, directions, declarations
and other communications between the Banks and the Borrowers provided for in any
Loan Document shall, except as otherwise expressly provided, be mailed by
registered or certified mail, return receipt requested, or telegraphed, or
faxed, or delivered in hand or by a nationally recognized overnight courier to
the applicable party at its address indicated opposite its name on the signature
pages hereto. The foregoing shall be effective and deemed received three days
after being deposited in the mails, postage prepaid, addressed as aforesaid and
shall whenever sent by telegram, telegraph or facsimile (provided the
transmitting facsimile machine provides written confirmation that the
transmission was successfully completed) or delivered in hand or by a nationally
recognized overnight courier be effective when received. Any party may change
its address by a communication in accordance herewith.
11.7 Sharing of Collections, Proceeds and Set-Offs: Application of
Payments.
(a) If any Bank, by exercising any right of set-off, counterclaim or
foreclosure, receives payment of principal or interest or other amount due on
any Note which is greater than the percentage share of such Bank (determined as
set forth below), the Bank receiving such proportionately greater payment shall
purchase such participations in the Loans held by the other Banks, and such
other adjustments shall be made as may be required, so that all such payments
shall be shared by the Banks on the basis of their percentage shares; provided
that if all or any portion of such proportionately greater payment of such
indebtedness is thereafter recovered from, or must otherwise be restored by,
such purchasing Bank, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest being paid by such
purchasing Bank. The percentage share of each Bank shall be based on the portion
of the outstanding Loans of such Bank (prior to receiving any payment for which
an adjustment must be made under this Section) in relation to the aggregate
outstanding Loans of all the Banks. The Borrowers agree, to the fullest extent
they may effectively do so under applicable law, that any
55
holder of a participation in a Loan or reimbursement obligation, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrowers in the
amount of such participation. If under any applicable bankruptcy, insolvency or
other similar law, any Bank receives a secured claim in lieu of a set-off to
which this Section would apply, such Bank shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Banks entitled under this Section to share in the benefits of
any recovery on such secured claim.
(b) If an Event of Default or Potential Default shall have occurred and
be continuing the Agents, each Bank and the Borrowers agree that all payments on
account of the Obligations shall be applied by the Administrative Agent and the
Banks as follows:
First, to First Union, as Administrative Agent, for any Administrative
Agent fees then due and payable under this Agreement until such fees are paid in
full;
Second, to any Agent, for any fees, costs or expenses (including
expenses described in Section 11.8) incurred by such Agent under any of the Loan
Documents or this Agreement, then due and payable and not reimbursed by the
Borrowers or the Banks until such fees, costs and expenses are paid in full;
Third, to the Banks for their percentage shares of the Revolving Loan
Commitment Fee then due and payable under this Agreement until such fee is paid
in full;
Fourth, to the Banks for their respective shares of all costs, expenses
and fees, including Standby Letter of Credit fees, then due and payable from the
Borrowers until such costs, expenses and fees are paid in full;
Fifth, to the Banks for their percentage shares of all interest then
due and payable from the Borrowers until such interest is paid in full, which
percentage shares shall be calculated by determining each Bank's percentage
share of the amounts allocated in (a) above determined as set forth in said
clause (a); and
Sixth, to the Banks for their percentage shares of the principal amount
of the Obligations then due and payable from the Borrowers until such principal
is paid in full, which percentage shares shall be calculated by determining each
Bank's percentage share of the amounts allocated in (a) above determined as set
forth in said clause (a).
11.8 Expenses; Indemnification. The Borrowers will from time to time
reimburse the Agents promptly following demand for all reasonable out-of-pocket
expenses (including the reasonable fees and expenses of their legal counsel) in
connection with (a) the preparation of the Loan Documents, (b) the making of any
Loans, (c) the administration of the Loan Documents, and (d) the syndication of
this Credit Facility. The Borrowers also will from to time reimburse the Agents
and each Bank for all out-of-pocket expenses (including reasonable fees and
expenses of their legal counsel) in connection with the enforcement of the Loan
Documents. In addition to the payment of the foregoing expenses, the Borrowers
hereby agree to indemnify, defend, protect and hold First Union, as
Administrative Agent, Bank of America, as Appraisal Agent, and BAS, as
Syndication Agent, each Bank and any holder of any Note and the officers,
directors,
56
employees, agents, affiliates and attorneys of the Agents, each Bank and such
holder (collectively, the "Indemnitees") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature, including reasonable
fees and expenses of legal counsel, which may be imposed on, incurred by, or
asserted against such Indemnitee by the Borrowers or other third parties and
arise out of or relate to this Agreement or the other Loan Documents or any
other matter whatsoever related to the transactions contemplated by or referred
to in this Agreement or the other Loan Documents; provided, however, that the
Borrowers shall have no obligation to an Indemnitee hereunder to the extent that
the liability incurred by such Indemnitee has been determined by a court of
competent jurisdiction to be the result of gross negligence or willful
misconduct of such Indemnitee.
11.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties expressly made herein shall survive the execution
and delivery of this Agreement, the making of the Loans hereunder and the
execution and delivery of the Notes. Notwithstanding anything in this Agreement
or implied by law to the contrary, the agreements of the Borrowers set forth in
Section 11.8 shall survive the payment of the Loans and the termination of this
Agreement. This Agreement shall remain in full force and effect until the
repayment in full of all amounts owed by the Borrowers under the Notes or any
other Loan Document.
11.10 Severability. The invalidity, illegality or unenforceability in
any jurisdiction of any provision in or obligation under this Agreement, any
Note or other Loan Document shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Agreement,
the Notes or other Loan Documents or of such provision or obligation in any
other jurisdiction.
11.11 Banks' Obligations Several; Independent Nature of Banks' Rights.
The obligation of each Bank hereunder is several and not joint and no Bank shall
be the agent of any other (except to the extent any Agent is authorized to act
as such hereunder). No Bank shall be responsible for the obligation or
commitment of any other Bank hereunder. In the event that any Bank at any time
should fail to make a Loan as herein provided, the other Banks, or any of them
as may then be agreed upon, at their sole option, may make the Loan that was to
have been made by the Bank so failing to make such Loan. Nothing contained in
any Loan Document and no action taken by any Agent or any Bank pursuant hereto
or thereto shall be deemed to constitute the Banks to be a partnership, an
association, a joint venture or any other kind of entity. The amounts payable at
any time hereunder to each Bank shall be a separate and independent debt, and,
subject to the terms of this Agreement, each Bank shall be entitled to protect
and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Bank to be joined as an additional party in any
proceeding for such purpose.
11.12 No Fiduciary Relationship. No provision in this Agreement or in
any of the other Loan Documents and no course of dealing between the parties
shall be deemed to create any fiduciary duty by any Bank to the Borrowers.
11.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. THE BORROWERS,
THE AGENTS, AND THE BANKS EACH HEREBY CONSENT TO THE JURISDICTION OF ANY STATE
OR FEDERAL COURT LOCATED WITHIN THE CITY
57
OF CHARLOTTE, NORTH CAROLINA AND IRREVOCABLY AGREES THAT, ANY ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THE NOTES, THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS MAY BE LITIGATED IN SUCH COURTS. EACH PARTY TO THIS AGREEMENT
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, ANY NOTE, OR
SUCH OTHER LOAN DOCUMENT.
11.14 WAIVER OF JURY TRIAL. THE BORROWERS, THE AGENTS, AND THE BANKS
EACH HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN
DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT AND THE LENDER/BORROWER RELATIONSHIP ESTABLISHED HEREBY. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE BORROWERS, THE
AGENTS, AND THE BANKS EACH ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO THE TRANSACTION, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. THE BORROWERS, THE AGENTS, AND THE BANKS EACH
FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS,
MODIFICATIONS, REPLACEMENTS OR RESTATEMENTS TO THIS AGREEMENT, THE LOAN
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
11.15 Counterparts; Effectiveness. This Agreement and any amendment
hereto or waiver hereof may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement and any amendments
hereto or waivers hereof shall become effective when the Administrative Agent
shall have received signed counterparts or notice by fax of the signature page
that the counterpart has been signed and is being delivered to it or facsimile
that such counterparts have been signed by all the parties hereto or thereto.
11.16 Use of Defined Terms. All words used herein in the singular or
plural shall be deemed to have been used in the plural or singular where the
context or construction so requires. Any defined term used in the singular
preceded by "any" shall be taken to indicate any number of the members of the
relevant class.
58
11.17 Offsets. Nothing in this Agreement shall be deemed a waiver or
prohibition of any Bank's right of banker's lien or offset.
11.18 Entire Agreement. This Agreement, the Notes issued hereunder and
the other Loan Documents constitute the entire understanding of the parties
hereto as of the date hereof with respect to the subject matter hereof and
thereof and supersede any prior agreements, written or oral, with respect hereto
or thereto.
11.19 Confidentiality. In handling any written information specifically
marked "confidential" prior to its delivery to any Bank by the Borrowers, each
of the Agents and the Banks shall exercise the same degree of care that it
exercises with respect to its own proprietary information of the same type to
maintain the confidentiality of any non-public information thereby received or
received pursuant to this Agreement or any other Loan Documents except that
disclosure of such information may be made (a) to the agents, employees,
subsidiaries or affiliates of such Person in connection with this Agreement or
any other Loan Document, (b) to prospective participants or assignees of the
Loans, provided that they have agreed to be bound by the provisions of this
Section 11.19, (c) as required by law, regulation, rule or order, subpoena,
judicial order or similar order, and (d) as may be required in connection with
the examination, audit or similar investigation of such Person. Confidential
information shall not include information that either (x) is in the public
domain, or becomes a part of the public domain after disclosure to such Person
through no fault of such Person or (y) is disclosed to such Person by a third
party, provided such Person does not have knowledge that such third party is
prohibited from disclosing such information.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be duly executed by their duly authorized representatives as of the date
first above written.
▇▇▇▇▇▇ LEASE FINANCE CORPORATION
By
------------------------------------------
Name:
Title:
Notices To:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Att: General Counsel
▇▇▇▇▇▇ AERONAUTICAL SERVICES, INC.
By
------------------------------------------
Name:
Title:
Notices To:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Att: General Counsel
FIRST UNION NATIONAL BANK
By
------------------------------------------
Name:
Title:
Notices To:
▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
First Union National Bank
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA, N.A.
By
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Notices To:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Bank of America, N.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
BANC OF AMERICA
SECURITIES LLC
By
------------------------------------------
Name:
Title:
Notices To:
EUROPEAN AMERICAN BANK
By
------------------------------------------
60
Name:
Title:
Notices To:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
European American Bank
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
BANK ONE, N.A
By
------------------------------------------
Name:
Title:
Notices To:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Bank One, N.A.
1 Bank One Plaza, IL1 0084
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
FLEET BANK, N.A.
By
------------------------------------------
Name:
Title:
Notices To:
▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
BankBoston
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code 01-08-01
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By
------------------------------------------
Name:
Title:
Notices To:
61
▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
MEESPIERSON N.V.
By
------------------------------------------
Name:
Title:
Notices To:
Maarten ▇. ▇▇▇▇▇▇▇▇
MeesPierson N.V.
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇-▇▇▇-▇▇▇▇
UNION BANK OF CALIFORNIA, N.A.
By
------------------------------------------
Name:
Title:
Notices To:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
BANK LEUMI USA
By
------------------------------------------
Name:
Title:
Notices To:
Del Lorimer
Vice President, Corporate Finance
Bank Leumi USA
62
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
BANCO POPULAR NORTH AMERICA
By
------------------------------------------
Name:
Title:
Notices To:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Vice President
Banco Popular De Puerto Rico
▇ ▇. ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
63
