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
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
AS CO-ARRANGER AND SYNDICATION AGENT
AND
NATIONSBANK, N.A.
AS APPRAISAL AGENT
AS OF SEPTEMBER 30, 1998
---------------------
* 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 September 30,
1998 (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), NATIONSBANC
▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC, as Co-Arranger and as Syndication Agent ("NMS"), and
NATIONSBANK, N.A., a national banking association, as Appraisal Agent
("NATIONSBANK"). The Administrative Agent, the Syndication Agent and the
Appraisal Agent are collectively the "Agents" and each is individually an
"Agent." This Agreement amends and restates in its entirety the Amended and
Restated Credit Agreement, dated June 2, 1998, between ▇▇▇▇▇▇ and CoreStates
Bank, N.A. (now First Union National Bank by reason of the merger of CoreStates
Bank, N.A. with and into First Union National Bank on May 15, 1998), 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:
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; (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 __%
Aircraft - Stage III Jet and Turbo Prop __%
Engines - Stage III Turbo Prop __%
Engines - Stage II Jet __%
Aircraft - Stage II Jet __%
The applicable Advance Rate for Eligible Engines or Eligible Parts
Packages will decrease by ___ percentage points if such Eligible
Engines or Eligible Parts Packages are not subject to a Lease when
acquired, and the applicable Advance Rate for Eligible Engines,
Eligible Parts Packages and Eligible Aircraft will be reduced by
_____ percentage points if such Equipment has been not subject to
a Lease for 120 consecutive days; PROVIDED, however, that 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
which have been not subject to a Lease for 180 consecutive days
will be excluded from the
---------------------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the redacted material has been filed
separately with the Commission.
2
Borrowing Base; PROVIDED, however, that 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 one 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.
"AIRCRAFT" shall mean a vessel owned by a Borrower designed for controlled
travel through the air under its own power. Aircraft shall not include
helicopters.
"AMENDMENT NO. 3 TO MORTGAGE" shall mean that certain Amendment No. 3 to
Mortgage and Security Agreement which is executed and delivered by the
Borrowers in connection with the execution of this Agreement, and pursuant
to which the Mortgage will be modified to reflect the making of this
Agreement including, without limitation, the addition of WASI as a
Borrower.
"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.
---------------------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the redacted material has been filed
separately with the Commission.
3
"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 rate of interest for
commercial loans established and publicly announced by the Administrative
Agent from time to time as its Prime Rate, and (ii) the Federal Funds
Rate plus 1/2 of 1% per annum. Any change in such interest rate due to a
change in the Base 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.
"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 the 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 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 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 be to
a single lessee;*
(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
---------------------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the redacted material has been filed
separately with the Commission.
4
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 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 be used on Stage II Aircraft or be
Stage II in nature;*
(vii) No more than $________ of Revolving Loans 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 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;
and*
(ix) No more than $________ of Revolving Loans outstanding at any time
and from time to time can be supported by Eligible Parts Packages
included in the Borrowing Base.*
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 contemplated in Section 9.1 or subsection (viii) of the
definition of "Eligible Lease") 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
---------------------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the redacted material has been filed
separately with the Commission.
5
"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.
"CHANGE OF CONTROL" shall mean, with respect to any 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
------------------------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the redacted material has been filed
separately with the Commission.
6
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" shall mean the consummation of all requirements set
forth in this Agreement such that the Borrowers shall be entitled
to request and receive Loans hereunder.
"CLOSING DATE" shall mean the date on which the Closing shall
occur and this Agreement shall become effective.
"CLOSING FEE" A fee payable by the Borrowers to the Administrative
Agent on the Closing Date in an amount previously agreed between
the Borrowers and the Administrative Agent.
"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 have the meaning set forth in Section 9.1,
which Collateral shall be deemed to 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
7
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; (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.
"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: (i) the
Aircraft must be _______________ compliant jet Aircraft or turbo
prop Aircraft manufactured by an Acceptable Manufacturer and
subject to a Lease when acquired; (ii) the Aircraft must have been
manufactured no more than ___ years prior to the date such
Aircraft is initially added to the Borrowing Base; (iii) unless
otherwise approved by the Majority Banks, the Lease regarding the
Aircraft must have a remaining term of at least _______________;
(iv) all Leases of Aircraft must be non-cancelable, triple net,
and must contain "hell or high water" language; and (v) an
appraisal prepared by an independent appraiser retained by the
Appraisal Agent on behalf of the Banks (but paid for by the
Borrowers), opining as to the Fair Market Value of the Aircraft at
the time of its initial inclusion in the
8
Borrowing Base, must be provided to the Administrative Agent and must be
satisfactory to the Administrative Agent.*
The Eligibility Criteria for Engines are as follows: The
Eligibility Criteria for Engines are as follows: (i) the Engines
must be _______________ compliant jet Engines or turbo prop
Engines; (ii) the Engines must be manufactured by an Acceptable
Manufacturer; (iii) except as specifically listed in Schedule 2
hereto, _______________ Engines must have been manufactured no
more than ___ years prior to the date such Engine is initially
added to the Borrowing Base; provided, however, that this
restriction shall not apply to Stage ___ Engines; and (iv) except
for permitted short-term leases, all Leases of Engines must be
non-cancelable, triple net, and must contain "hell or high water"
language.*
The Eligibility Criteria for Parts are as follows: (i) Parts must
be compatible with or derived from _______________ compliant jet
Engines, turbo prop Engines, or Aircraft; and (ii) the Parts must
be held by either Borrower for resale.*
The Eligibility Criteria for Parts Packages are as follows:
(i) Parts Packages must be for _______________ compliant Engines,
turbo prop Engines, or Aircraft; (ii) Parts must have been
manufactured no more than ___ years prior to the date the Parts in
such Parts Package are initially added to the Borrowing Base; and
(iii) except for permitted short-term leases, all Leases of Parts
Packages must be non-cancelable, triple net, and must contain
"hell or high water" language.*
The Eligibility Criteria for Leases are as follows: (i) the
Borrower or lessee under the Lease must maintain insurance in form
and substance satisfactory to the Administrative Agent; (ii) the
Borrower or lessee under the Lease must comply with all
maintenance, return, alteration, replacement, pooling and sublease
conditions as typically found in financings and leases for similar
types of Engines and Aircraft and as necessary to maintain in good
standing the Engine and Aircraft airworthiness certification at
all times and in accordance with other regulatory requirements;
(iii) Engines and Aircraft shall not be operated in North Korea,
Iran, Cuba, Burma, Angola, Iraq, Syria, Libya or Sudan, nor shall
Engines and Aircraft be flown in any jurisdiction which would void
the insurance applicable thereto or would violate United States
government restrictions; (iv) if the Lease contains a fixed
purchase option, the terms thereof must provide for payment upon
exercise of the option of an amount which is not less than the Net
Book Value of the item of Equipment being purchased at the date of
the purchase;
-----------------------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the redacted material has been filed
separately with the Commission.
9
and (v) no prepayments shall have been made under the Lease other than
those expressly provided for under such Lease.
"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 meet all of the
applicable Eligibility Criteria applicable thereto.
"ELIGIBLE LEASE" shall mean a Lease of Equipment to an
unaffiliated Person in which: (i) either Borrower or its trustee
is the sole lessor; (ii) the Lease arose in the ordinary course of
business of either Borrower; (iii) the Equipment has been
delivered to the lessee and is currently subject to the Lease;
(iv) neither the Lease nor the Equipment is subject to any
currently outstanding assignment, claim, lien, security interest
or other limitation on the absolute title of either Borrower or
its trustee thereto, other than Permitted Liens; (v) the Lease
payments are not more than ___ days past due with respect to any
payment required thereby (based on the original contractual term
and not including any amendment or modification thereof, unless
the Majority Banks have specifically consented thereto in
writing), provided, however, that Leases with respect to which
payments are more than ___ days past due shall remain "Eligible
Leases" but the Advance Rate with respect to the Equipment covered
by such Leases shall be reduced (a) to ___% for Leases where
payments are more than ___ but fewer than ___ days past due,
(b) to ___% for Leases where payments are at least ___ but fewer
than ___ days past due, and (c) to ___% for Leases where payments
are at least ___ days past due; (vi) except for Leases listed as
"Leases Potentially Subject to Assignment Limitations" on Schedule
1 hereto, the Lease is freely assignable (with any notices or
consents required in connection therewith having been previously
obtained); (vii) the Lease and the Equipment being leased
constitute Collateral; and (viii) the lessee is not a resident of,
and the Equipment will not be used in any foreign jurisdiction in
which the ability of the Administrative Agent to perfect a first
priority security interest in the Equipment is unsatisfactory or
the ability of the Administrative Agent to foreclose upon the
Equipment and receive possession to or sell said Equipment is
unsatisfactory.*
-----------------------
* This redacted material has been omitted pursuant to a request for
confidential treatment and the redacted material has been filed
separately with the Commission.
10
"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 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 owned by any Borrower, 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.
"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.
11
"FAIR MARKET VALUE" shall mean the fair market value of Equipment
as determined by an appraisal made by an appraiser arranged by the
Appraisal Agent under the terms of this Agreement.
"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.
"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 the Guaranty in the form and substance
attached hereto as Exhibit J, to be executed by each 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., Section 2601 ET SEQ.; the Comprehensive
Environmental Response, Compensation and Liability Act, 33 U.S.C.
Section 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. Section 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
12
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 Loan being renewed, the last
day of the next 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 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
13
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 one of the Borrowers, as lessor, and a third party,
as lessee, pursuant to which a Borrower 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 made at Adjusted LIBO Rate plus
the Applicable Margin, pursuant to a request for advance made
under Section 2.4 herein.
"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 LIBO Rate or Base Rate Revolving Loan
or Loans or LIBO Rate or Base Rate Term Loan or Loans.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the
Mortgage (as amended by Amendment No. 3 to Mortgage), the Security
Agreement, the
14
Guaranty, and all other documents directly related or incidental
to said documents, the Loans 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.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect (i)
on 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 Mortgage and Security Agreement
made by ▇▇▇▇▇▇ in favor of CoreStates Bank, N.A. (predecessor in
interest to the Administrative Agent) dated as of June 27, 1997,
recorded by the United States Federal Aviation Administration on
July 9, 1997 and assigned Conveyance No. H90651, as amended
pursuant to (i) Amendment No. 1 to Mortgage and Security
Agreement, dated November 18, 1997, recorded by the United States
Federal Aviation Administration on January 13, 1998 and assigned
Conveyance No. P13938; and (ii) Amendment No. 2 to Mortgage and
Security Agreement, dated June 5, 1998, filed with the United
States Federal Aviation Administration on June 5, 1998 but not yet
recorded. The Mortgage also includes a series of Mortgage
Supplements heretofore made by ▇▇▇▇▇▇ and recorded with the United
States Federal Aviation Administration.
"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.
15
"NET BOOK VALUE" of an item of Equipment shall be calculated as
the lesser of: (i) the cost to Borrower of the Equipment; or (ii)
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.
"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.
"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 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 for which either
Borrower 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) created for the purpose of refinancing Loans or Standby
Letters of Credit outstanding under this Credit Facility or the
Existing Debt; (ii) with a final maturity not less than the final
maturity of this Credit Facility; (iii) with an average life no
less than the remaining average life of this Credit Facility; (iv)
with terms, covenants and conditions no more restrictive than
those in this Agreement; and (v) with respect to which the initial
advance rates on the assets financed with such Indebtedness for
Borrowed Money are not less than those under this Credit Facility.
"PARTS" shall mean components of an Aircraft, an Engine or any
systems within an Aircraft or Engine owned by a Borrower that have
either been removed from the Aircraft or Engine or have not yet
been incorporated into an Aircraft or Engine.
16
"PARTS PACKAGES" shall mean a grouping of Parts owned by a
Borrower which are to be sold or leased by a Borrower 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
ERISA Section 302 or Code Section 412) 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 date hereof and listed in Schedule 1 hereto; (vi) Liens in
favor of First Union, as Administrative Agent, in the Collateral
as contemplated by this Agreement and the other Loan Documents;
(vii) the rights of a lessee to utilize the Collateral pursuant to
the terms of a Lease; (viii) Liens securing Other Indebtedness
(but such Liens shall be limited to the assets of the Borrower
being refinanced 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; and (x)
Liens against the Shares (as defined in the Security Agreement)
and records
17
relating to the Shares of Unrestricted Subsidiaries as contemplated
by Section 6.9(h) hereto.
"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 Code Section 4975 or ERISA Section 406 and not
exempt under Code Section 4975 or ERISA Section 408.
"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.
18
"REPORTABLE EVENT" shall mean, with respect to a Pension Plan: (i)
Any of the events set forth in ERISA 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) or the
regulations thereunder, (ii) an event requiring either Borrower or
any ERISA Affiliate to provide security to a Pension Plan under
Code Section 401(a)(29) and (iii) any failure by either Borrower
or any ERISA Affiliate to make payments required by Code Section
412(m).
"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 ( ) 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
Bank 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 Bank 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 Bank 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.
"REVOLVING LOAN COMMITMENT PERCENTAGE" shall mean with respect to
each Bank the percentage set forth 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.
19
"SECURITY AGREEMENT" shall mean the Security Agreement in form and
substance attached hereto as Exhibit F.
"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 Borrower's obligations
under the Credit Facility, (ii) 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.
"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
ERISA Section 4041(c), (iii) the institution of proceedings to
20
terminate a Pension Plan under ERISA Section 4042 or (iv) the
appointment of a trustee to administer any Pension Plan under
ERISA Section 4042.
"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 be designated as an
Unrestricted Subsidiary.
"▇▇▇▇▇▇ COMPANIES" shall mean ▇▇▇▇▇▇ and its consolidated
Subsidiaries, including, without limitation, WASI.
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.
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 date hereof 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 time
outstanding, in the aggregate, the commitment amount set forth 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
21
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 any Borrower at any time shall be limited to its
percentage (the "REVOLVING LOAN COMMITMENT PERCENTAGE") as set forth 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 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
22
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 date of issuance, 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 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 2.8
or 2.7 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 Letters
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 Borrowing Base Certificates showing
23
the current balance of outstanding Standby Letters of Credit, as delivered by
the Borrowers to the Administrative Agent.
Standby Letters 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 Letter of Credit, and will be due
quarterly in arrears, commencing on the last Business Day of the calendar
quarter in which the 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 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
24
may not request more than three advances per week. Each request for advance
shall be for Loans at a single interest rate option.
(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.
25
(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 to make 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).
2.5. REVOLVING LOAN COMMITMENT FEE. 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 October 1,
1998 (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.
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. If the aggregate
principal amount of advances and the face amount of Standby Letters of Credit
outstanding under this Credit Facility at any time exceeds the total
Borrowing Base, the Borrowers shall make immediate prepayments to reduce such
outstanding advances under the Loans, plus the face amount of such Standby
Letters of Credit to an amount not to exceed the Borrowing Base; provided,
however, that if (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 advances then outstanding under the Credit Facility, the
Borrowers may elect to convert all outstanding advances 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.
26
(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' 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 have 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) To the extent 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, 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
28
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.
(ii) To the extent that 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, such excess principal
balance, when converted into Term Loans, shall be amortized as follows:
during each successive one-year period following the Conversion Date, 25.0%
of the aggregate excess principal balance existing on the Conversion Date
shall be repaid in four equal quarterly installments.
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 of the Administrative Agent. 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 from its
effective date 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, and shall be
payable on the last day of the applicable Interest Period, or quarterly,
whichever is earlier. If a LIBO Rate Loan is for a period of three months or
more, it shall be payable quarterly.
28
(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.
(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 the Borrowers 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
29
collateral as provided in Section 9.3, which prepayments shall not be subject
to the requirements of 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 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.
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 or quarterly, whichever is earlier. 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 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
30
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.
(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 Loan, 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,
31
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 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 Closing 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
32
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.
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 Closing 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, with the
initial Appraisal Agent fee payable on the Closing Date.
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
33
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
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
34
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, 1997 and December
31, 1996, 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 June 30, 1998 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 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, 1997, 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.
35
(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 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 any Borrower becomes aware of any information indicating that
either (i) any real property owned or leased by any 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) any 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 set forth in Schedule 1
hereto and any
36
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.
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
37
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.
4. CONDITIONS PRECEDENT
4.1. ALL LOANS. 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 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) COVENANTS; REPRESENTATIONS. The Borrowers shall be in compliance
with all covenants, agreements and conditions in each Loan Document and each
representation and warranty contained in each Loan Document shall be true
with the same effect as if such representation or warranty had been 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.
(e) DEFAULTS. Immediately prior to and after giving effect to such
transaction, no Event of Default or Potential Default shall exist.
(f) MATERIAL ADVERSE CHANGE. Since December 31, 1997, there shall not
have been any Material Adverse Change.
4.2. CONDITIONS TO FIRST LOAN. In addition to the conditions to all
Loans and Standby Letters of Credit as provided in Section , the obligation
of each Bank to make its first Loan is conditioned upon the following:
38
(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 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.
(e) NOTES. Each Bank shall have received its Revolving Credit Note
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
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 shall have executed and delivered
each other Loan Document required hereunder including, without limitation,
the Security Agreement and Amendment No. 3 to 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.
39
(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, 1996 and December 31, 1997, 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
June 30, 1998.
(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) CLOSING FEE. The Borrowers shall have paid to the Administrative
Agent the Closing Fee. Promptly after receipt of the Closing Fee, the
Administrative Agent shall distribute to the Banks their respective share of
the Closing Fee based upon the Banks' respective Revolving Loan Commitment
Percentages.
(o) FEES, EXPENSES. The Borrowers shall simultaneously pay or shall
have paid all fees and expenses, if any, due hereunder or 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.
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 the 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
40
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 acountants 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 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
41
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
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.
42
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 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
43
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
Debt, 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 the 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 the
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 the
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
(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
44
such examination to once each calendar year. If the 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, other than those related to
Debt (which are addressed, instead, in Section 5.8), 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.
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 any Borrower.
45
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 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
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
46
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.
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.
(a) Make or pay any redemptions, repurchases, dividends or
distributions of any kind with respect to the capital stock of ▇▇▇▇▇▇.
(b) 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'
47
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.
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 Closing 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 the Closing Date; plus 75% of the cumulative Net
Income of the ▇▇▇▇▇▇ Companies earned from and after the Closing Date
(without any deduction for net losses); plus 100% of net proceeds of new
equity issues completed by ▇▇▇▇▇▇ from and after the Closing Date.
7.3. LEVERAGE RATIO. From and after the Closing 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
Closing 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 Closing 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.
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
48
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.
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 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, 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. The 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
49
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), superior to and prior to the rights
of all third Persons, and subject to no other Liens (except as permitted by
Section 6.2).
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 declared due and
payable pursuant to this Section 8.1, shall be the Facility Termination Date
for purposes of this
50
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.
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, any Obligations made and outstanding and their
repayment at all times shall (a) in the case of Collateral (as defined in the
Security Agreement, hereinafter referred to as the "COLLATERAL") located in
the United States, be secured by a first priority perfected security
interest; and (b) in the case of Collateral located in jurisdictions outside
the United States, be secured by a security interest which adequately
protects the first priority security interest in favor of the Administrative
Agent.
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,
Amendment No. 3 to 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, except as otherwise provided 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.
The Administrative Agent will cooperate with the Borrowers in effecting any
such release.
10. THE AGENTS
10.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints and authorizes First Union as the Administrative Agent, NMS as the
Syndication Agent and NationsBank 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 NationsBank. 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
51
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 (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.
52
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 NationsBank in their individual capacity.
First Union and any successor Administrative Agent, and NationsBank 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 NationsBank 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 NationsBank in its capacity as
Appraisal Agent, hereunder or under any Loan Document; provided that none 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
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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.
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 preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
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
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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 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
anothe 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
55
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 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:
56
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, NationsBank,
as Appraisal Agent, and NMS, as Syndication Agent, each Bank and any holder
of any Note and the officers, directors, 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.
57
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 EASTERN DISTRICT OF PENNSYLVANIA AND
IRREVOCABLY AGREES THAT, ANY ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THE NOTE, 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 CONVENIENT, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, ANY NOTE, OR SUCH OTHER
LOAN DOCUMENT.
58
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.
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
59
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.
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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: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
Notices To:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX No. (▇▇▇) ▇▇▇-▇▇▇▇
ATT: General Counsel
▇▇▇▇▇▇ AERONAUTICAL SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
Notices To:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX No. (▇▇▇) ▇▇▇-▇▇▇▇
ATT: General Counsel
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Notices To:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
First Union National Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Mail Code: PA 4827
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
NATIONSBANK, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Notices To:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Principal
Notices To:
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
EUROPEAN AMERICAN BANK
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Notices To:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
European American Bank
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Notices To:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
FLEET BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Notices To:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Fleet Bank, N.A.
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
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▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇▇▇▇ Camel
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Name: ▇▇▇▇▇▇▇ Camel
Title: Vice President
Notices To:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇. ▇▇▇▇▇▇, ▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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MEESPIERSON N.V.
By: /s/ R.R.G. Zaman and
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▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇-ten Hoonte
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Name: R.R.G. Zaman and
▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇-ten Hoonte
Title: Head of Aviation
Notices To:
Maarten ▇. ▇▇▇▇▇▇▇▇
MeesPierson N.V.
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▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
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UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Notices To:
▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
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BANK LEUMI USA
By: /s/ Del Lorimer
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Name: Del Lorimer
Title: Vice President
Notices To:
Del Lorimer
Vice President, Corporate Finance
Bank Leumi USA
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▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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BANCO POPULAR DE PUERTO RICO
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Notices To:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Vice President
Banco Popular De Puerto Rico
▇ ▇. ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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