================================================================================
EXHIBIT 10.1
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 31, 2000
among
Aviation Sales Company,
a Delaware corporation
Subsidiaries of Aviation Sales Company
as Borrowers
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
CITICORP USA, INC.
as Agent
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This Fourth Amended and Restated Credit Agreement dated as of
May 31, 2000 (as amended, restated, supplemented or modified from time to time,
the "Agreement") is entered into among Aviation Sales Distribution Services
Company, a Delaware corporation, Aerocell Structures, Inc., an Arkansas
corporation, AVS/▇▇▇▇▇-▇▇▇▇▇ Machine Company, a Delaware corporation, Whitehall
Corporation, a Delaware corporation, Triad International Maintenance
Corporation, a Delaware corporation, Apex Manufacturing, Inc., an Arizona
corporation, Caribe Aviation, Inc., a Florida corporation, Aircraft Interior
Design, Inc., a Florida corporation, Aviation Sales Bearings Company, a Delaware
corporation, Aviation Sales Leasing Company, a Delaware corporation, TIMCO
Engine Center, Inc., a Delaware corporation, Aviation Sales Company, a Delaware
corporation, the institutions from time to time a party hereto as Lenders,
whether by execution of this Agreement or an Assignment and Acceptance, the
institutions from time to time a party hereto as Issuing Banks, whether by
execution of this Agreement or an Assignment and Acceptance, and Citicorp USA,
Inc., a Delaware corporation, in its capacity as agent for the Lenders and the
Issuing Banks hereunder (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers entered into that certain Third Amended
and Restated Credit Agreement dated as of October 17, 1997, as heretofore
amended, with Citicorp USA, Inc., as agent, Citicorp USA, Inc., and certain
other financial institutions as lenders, and Citibank, N.A., as issuing bank
(the "Predecessor Agreement"), pursuant to which Predecessor Agreement the
aforesaid lenders and issuing bank have made certain extensions of credit and
other financial accommodations to or for the benefit of the Borrowers and their
Affiliates; and
WHEREAS, the Parent and Borrowers have requested (i) that all
Events of Default existing under the Predecessor Agreement as of the date hereof
be waived and (ii) that the Predecessor Agreement be amended in certain
respects; and the Lenders a party to this Agreement have agreed to waive the
rights and remedies arising due to the existence of the aforesaid Events of
Default and the parties hereto have agreed to amend and restate the Predecessor
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms. The following terms used in this
Agreement shall have the following meanings, applicable both to the singular and
the plural forms of the terms defined:
"ABX Kits" means cargo conversion kits developed by TIMCO at
the request of Airborne Express in accordance with Airborne Express'
Supplemental Type Certificates.
1
"ABX Shipping Schedule" means the schedule as of the date of a
given Borrowing Base Certificate, determined based on records of Distribution
maintained on a consistent basis in the ordinary course of its business, of
shipping dates for respective ABX Kits.
"Accommodation Obligation" means any Contractual Obligation,
contingent or otherwise, of one Person with respect to any Indebtedness,
obligation or liability of another, if the primary purpose or intent thereof by
the Person incurring the Accommodation Obligation is to provide assurance to the
obligee of such Indebtedness, obligation or liability of another that such
Indebtedness, obligation or liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders thereof
will be protected (in whole or in part) against loss in respect thereof
including, without limitation, direct and indirect guarantees, endorsements
(except for collection or deposit in the ordinary course of business), notes
co-made or discounted, recourse agreements, take-or-pay agreements, keep-well
agreements, agreements to purchase or repurchase such Indebtedness, obligation
or liability or any security therefor or to provide funds for the payment or
discharge thereof, agreements to maintain solvency, assets, level of income, or
other financial condition, and agreements to make payment other than for value
received. The amount of any Accommodation Obligation shall be equal to the
amount of the Indebtedness, obligation or liability so guaranteed or otherwise
supported; provided, that (i) if the liability of the Person extending such
guaranty or support is limited with respect thereto to an amount less than the
Indebtedness, obligation or liability guaranteed or supported, or is limited to
recourse against a particular asset or assets of such Person, the amount of the
corresponding Accommodation Obligation shall be limited (in the case of a
guaranty or other support limited by amount) to such lesser amount or (in the
case of a guaranty or other support limited by recourse to a particular asset or
assets) to the higher of the Fair Market Value of such asset or assets at the
date for determination of the amount of the Accommodation Obligation or the
value at which such asset or assets would, in conformity with GAAP, be reflected
on or valued for the purposes of preparing a consolidated balance sheet of such
Person as at such determination date; and (ii) if any obligation or liability is
guaranteed or otherwise supported jointly and severally by a Person and others,
then the amount of the obligation or liability of such Person with respect to
such guaranty or other support to be included in the amount of such Person's
Accommodation Obligation shall be the whole principal amount so guaranteed or
otherwise supported.
"Aerocell" means Aerocell Structures, Inc., an Arkansas
corporation.
"Affiliate", as applied to any Person, means any other Person
that directly or indirectly controls, is controlled by, or is under common
control with, that Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means (i) the
possession, directly or indirectly, of the power to vote ten percent (10.0%) or
more of the Securities having voting power for the election of directors of such
Person or otherwise to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting Securities or
by contract or otherwise, or (ii) the ownership of (a) a general partnership
interest or (b) a limited partnership interest representing ten percent (10.0%)
or more of the outstanding limited partnership interests of a Person.
2
"Agent" means Citicorp and each successor agent appointed
pursuant to the terms of Article XIII of this Agreement.
"Agent Advance" is defined in Section 2.01(c)(i)(B).
"Agreement" is defined in the preamble hereto.
"Aircraft Availability Cap" means (i) $32,000,000 on the
Effective Date through October 30, 2000, (ii) $27,000,000 commencing on October
31, 2000 and ending on November 29, 2000, (iii) $22,000,000 commencing on
November 30, 2000 and ending on December 30, 2000, (iv) $17,000,000 commencing
on December 31, 2000 and ending on January 30, 2001, (v) $12,000,000 commencing
on January 31, 2001 and ending on February 27, 2001, (vi) $7,000,000 commencing
on February 28, 2001 and ending on March 30, 2001, (vii) $2,000,000 commencing
on March 31, 2001 and ending on April 29, 2001, and (viii) $0 from and after
April 30, 2001.
"Apex" means Apex Manufacturing, Inc., an Arizona corporation
and wholly-owned Subsidiary of Manufacturing.
"Appraisals" means those certain appraisals of Inventory and
Equipment of Distribution prepared by Aviation Asset Management, Inc. for the
Agent and the Lenders dated March 16, 2000.
"Approved Fund" means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor; provided that such management,
advisory capacity or affiliation is confirmed in writing by such Lender to the
Agent.
"Assignment and Acceptance" means an Assignment and Acceptance
in substantially the form of Exhibit A attached hereto and made a part hereof
(with blanks appropriately completed) delivered to the Agent in connection with
an assignment of a Lender's interest under this Agreement in accordance with the
provisions of Section 15.01.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C.ss.ss.101 et seq.), as amended from time to time, and any successor
statute.
"Base Eurodollar Rate" means, with respect to any Eurodollar
Interest Period applicable to a Borrowing of Eurodollar Rate Loans, the rate per
annum at which deposits in Dollars are offered by the principal office of
Citibank in London, England to major banks in the London interbank market at
approximately 11:00 a.m. (London time) on the Eurodollar Interest Rate
Determination Date for such Eurodollar Interest Period for a period equal to
such Eurodollar Interest Period in an amount substantially equal to the amount
of the Eurodollar Rate Loan to be outstanding to Citicorp for such Eurodollar
Interest Period.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the highest of:
3
(i) the rate of interest announced publicly by Citibank in New
York, New York from time to time, as Citibank's base rate; and
(ii) the sum (adjusted to the nearest one-quarter of one
percent (0.25%) or, if there is no nearest one-quarter of one percent
(0.25%), to the next higher one-quarter of one percent (0.25%)) of (A)
one-half of one percent (0.50%) per annum plus (B) the rate per annum
obtained by dividing (I) the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average (adjusted to the basis of a year
of 360 days) being determined weekly on each Monday (or, if such day is
not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday (or, if such day is not
a Business Day, on the next preceding Business Day) by Citibank on the
basis of such rates reported by certificate of deposit dealers to, and
published by, the Federal Reserve Bank of New York, or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three (3) New York
certificate of deposit dealers of recognized standing selected by
Citibank, by (II) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the
Federal Reserve Board (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank in
respect of liabilities which consist of or which include (among other
liabilities) three-month Dollar nonpersonal time deposits in the United
States plus (C) the average during such three-week period of the annual
assessment rates estimated by Citibank for determining the then current
annual assessment payable by Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring Dollar deposits of Citibank
in the United States; and
(iii) the sum of (A) one-half of one percent (0.50%) per annum
plus (B) the Federal Funds Rate in effect from time to time during such
period.
"Base Rate Loans" means all Loans which bear interest at a
rate determined by reference to the Base Rate and Base Rate Margin as provided
in Section 5.01(a).
"Base Rate Margin" means, as of any date of determination (i)
during the period commencing on the Effective Date through the day on which the
Overadvance Amount is repaid in full, a per annum rate equal to two and
three-quarters percent (2.75%) (subject to the proviso set forth below at the
end of this definition), (ii) during the period commencing on the day
immediately succeeding the day on which the Overadvance Amount is repaid in full
through the day on which the Revolving Credit Commitments shall have been
reduced to a maximum of $250,000,000, a per annum rate equal to two and
one-quarter percent (2.25%) (subject to the proviso set forth at the end of this
definition), (iii) during the period commencing on the day immediately
succeeding the day on which the Revolving Credit Commitments have been reduced
to a maximum of $250,000,000 through the day on which the Revolving Credit
Commitments shall have been reduced to a maximum of $200,000,000, a per annum
rate equal to one and three-quarters percent (1.75%) (subject to the proviso set
forth at the end of this
4
definition), (iv) during the period commencing on the day immediately succeeding
the day on which the Revolving Credit Commitments have been reduced to a maximum
of $200,000,000 through the date on which the Borrowers deliver to the Agent and
Lenders a Compliance Certificate, as and when required by Section 8.01(d), with
respect to the Fiscal Quarter ending December 31, 2000, a per annum rate equal
to one and one-half percent (1.50%), and (v) thereafter, provided that the
Revolving Credit Commitments do not then exceed $250,000,000, the rate set forth
below opposite the then applicable Performance Level set forth below:
Performance Level Base Rate Margin
----------------- ----------------
1 1.25%
2 1.50%
3 2.00%
provided, however, that, notwithstanding the foregoing, in the event the
Revolving Credit Commitments exceed $250,000,000 on July 31, 2000, the Base Rate
Margin shall increase, as of August 1, 2000 and each successive November 1,
February 1, May 1 and August 1, by one-quarter of one percent (0.25%) until such
time as the Revolving Credit Commitments do not exceed $250,000,000, whereupon
the increases in the Base Rate Margin made in compliance with this sentence
shall immediately terminate and the Base Rate Margin shall be determined as set
forth in clause (i), (ii), (iv) or (v) above, as applicable.
"Bearings" means Aviation Sales Bearings Company, a Delaware
corporation and wholly-owned Subsidiary of Distribution.
"Benefit Plan" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan or Foreign Employee
Benefit Plan) in respect of which any Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Borrower" means, individually, any of Aviation Sales
Distribution Services Company, a Delaware corporation; Aviation Sales Bearings
Company, a Delaware corporation; Aviation Sales Leasing Company, a Delaware
corporation; Aerocell Structures, Inc., an Arkansas corporation; Apex
Manufacturing, Inc., an Arizona corporation; Caribe Aviation, Inc., a Florida
corporation; AVS/▇▇▇▇▇-▇▇▇▇▇ Machine Company, a Delaware corporation; Aircraft
Interior Design, Inc., a Florida corporation; Triad International Maintenance
Corporation, a Delaware corporation; Whitehall Corporation, a Delaware
corporation; and TIMCO Engine Center, Inc., a Delaware corporation; and
"Borrowers" means, collectively, all of such Persons.
"Borrowing" means a borrowing consisting of Loans of the same
type made, continued or converted on the same day.
"Borrowing Base" means, as of any date of determination, an
amount equal to the sum of:
(i) up to seventy-five percent (75%) of the face amount of
Eligible Receivables of Distribution, Aerocell, ▇▇▇▇▇-▇▇▇▇▇, Bearings,
and Apex (net of
5
maximum discounts, allowances, retainage and any other amounts deferred
with respect thereto), plus
(ii) up to fifty percent (50%) of the face amount of Eligible
Receivables of Caribe and Design (net of maximum discounts, allowances,
retainage and any other amounts deferred with respect thereto), plus
(iii) up to eighty-five percent (85%) of the face amount of
Eligible Receivables of TIMCO (net of maximum discounts, allowances,
retainage and any other amounts deferred with respect thereto), plus
(iv) up to fifty percent (50%) of the face amount of earned,
but unbilled for periods less than sixty-one (61) days, Receivables of
TIMCO (net of maximum discounts, allowances, retainage and any other
amounts deferred with respect thereto) arising with respect to sales of
Inventory other than ABX Kits and services performed, plus
(v) up to fifty percent (50%) of the face amount of earned,
but unbilled Receivables of TIMCO (net of maximum discounts,
allowances, retainage and any other amounts deferred with respect
thereto) arising with respect to sales of ABX Kits the shipment of
which is scheduled to occur within ninety (90) days after the date of
the ABX Shipping Schedule attached to the corresponding Borrowing Base
Certificate, plus
(vi) up to sixty-two percent (62%) of the book value of
Eligible Inventory of Caribe, plus
(vii) up to the lesser of sixty-two percent (62%) of the book
value or seventy percent (70%) of the orderly liquidation value (as
reflected in the then most recent Appraisal thereof) of Eligible
Inventory of Distribution (other than engines, Leased Inventory and
landing gear); provided, however, that, from and after May 31, 2001,
such advance rate shall be thirty-one percent (31%) for such Eligible
Inventory acquired pursuant to a purchase order issued in 1997, plus
(viii) with respect to Eligible Aircraft, (a) $10,000,000 with
respect to each of such Eligible Aircraft which are cargo configured
and (b) $2,000,000 with respect to such Eligible Aircraft which is not
cargo configured; provided, however, that in no event shall the amount
of the Borrowing Base determined under this clause (viii) exceed at any
time the lesser of the amount of (1) the Aircraft Availability Cap at
the time of designation and (2) the sum of (a) and (b) above, plus
(ix) up to forty percent (40%) of the book value (net of
maintenance reserves) of Eligible Inventory of Distribution consisting
of engines not included as part of Eligible Aircraft, plus
(x) up to sixty percent (60%) of the book value of Eligible
Inventory of Distribution and Leasing consisting of landing gear, plus
6
(xi) up to forty-four percent (44%) of the book value of
Eligible Inventory of Distribution consisting of Leased Inventory;
(xii) up to fifty-five percent (55%) of the book value of
Eligible Inventory of Bearings acquired after November 30, 1997, plus
(xiii) up to forty percent (40%) of the book value of Eligible
Inventory of ▇▇▇▇▇-▇▇▇▇▇ and Aerocell, plus;
(xiv) up to forty percent (40%) of the book value of Eligible
Inventory of TIMCO consisting of aircraft spare parts held for re-sale
and up to twenty-five percent (25%) of the book value of Eligible
Inventory of TIMCO consisting of aircraft spare parts held for
maintenance, plus
(xv) without duplication as to clause (xiv) above, up to
thirty-five percent (35%) of the book value of Eligible Inventory of
TIMCO located at Lake City and up to thirty percent (30%) of the book
value of Eligible Inventory of TIMCO located at ▇▇▇▇▇, ▇▇▇▇▇▇▇-Salem
and Oscoda;
(xvi) up to twenty-five percent (25%) of the book value of
Eligible Inventory of Apex and Design, plus
(xvii) up to fifty percent (50%) of the appraised fair market
value of ▇▇▇▇▇-▇▇▇▇▇'▇ owned Real Property, plus
(xviii) up to sixty percent (60%) of the appraised orderly
liquidation value of ▇▇▇▇▇-▇▇▇▇▇'▇ owned Equipment, plus
(xix) the outstanding balance of the Overadvance Amount as of
such date of determination; minus
(xx) the Interest Reserve.
For purposes of this definition, (1) Eligible Receivables and Eligible
Inventory, in each case and as of any date of determination, shall be determined
after deduction of all Eligibility Reserves then effective with respect to such
items, (2) the book value referenced shall be determined on the bases described
in the Borrowing Base Certificate as reflected on the books and records of the
Borrowers and, in the case of engines owned as of December 31, 1999, subject to
a valuation reserve based upon the writedown taken with respect thereto in the
Parent's and its Subsidiaries' Financial Statements for December 31, 1999, (3)
the gross value of Leased Inventory from which the Borrowing Base is determined
shall in no event exceed, at any time, $15,000,000 in the aggregate, and (4) the
appraised values referenced in clauses (xvii) and (xviii) shall be based on
appraisals obtained prior to the Effective Date until August 31, 2000 and
thereafter shall be based on updated appraisals made by appraisers satisfactory
to the Agent. In each instance, the amounts described hereinabove shall be
designated as such on the Borrowing Base Certificate dated as of such date of
determination.
7
"Borrowing Base Certificate" means a certificate, in
substantially the form of Exhibit B attached hereto and made a part hereof,
setting forth Eligible Receivables, Eligible Inventory (including
classifications, quantities, valuations and condition of the Eligible Inventory
and the respective advance percentages with respect thereto), and the
calculation of the resultant Borrowing Base, in each instance, as of the date of
such certificate, accompanied by an ABX Shipping Schedule dated the date of the
Borrowing Base Certificate.
"Business Activity Report" means (A) a Notice of Business
Activities Report from the State of New Jersey Division of Taxation or (B) a
Minnesota Business Activity Report from the Minnesota Department of Revenue.
"Business Day" means a day, in the applicable local time,
which is not a Saturday or Sunday or a legal holiday and on which banks are not
required or permitted by law or other governmental action to close (i) in New
York, New York and (ii) in the case of Letter of Credit transactions for a
particular Issuing Bank, in the place where its office for issuance or
administration of the pertinent Letter of Credit is located and (iii) in the
case of Eurodollar Rate Loans, in London, England.
"Capital Expenditures" means, for any period, the aggregate of
all expenditures (whether payable in cash or other Property or accrued as a
liability (but without duplication)) during such period that, in conformity with
GAAP, are required to be included in or reflected by the Parent's or any of its
Subsidiaries' fixed asset accounts as reflected in any of their respective
balance sheets; provided, however, (i) Capital Expenditures shall include,
whether or not such a designation would be in conformity with GAAP, (A)
expenditures for the purchase or development of computer software and systems,
(B) that portion of Capital Leases which is capitalized on the consolidated
balance sheet of the Parent and its Subsidiaries and (C) expenditures for
Equipment which is purchased simultaneously with the trade-in of existing
Equipment owned by the Parent or any of its Subsidiaries, to the extent the
gross purchase price of the purchased Equipment exceeds the book value of the
Equipment being traded in at such time; and (ii) Capital Expenditures shall
exclude, whether or not such a designation would be in conformity with GAAP, (A)
expenditures made in connection with the replacement or restoration of Property,
to the extent reimbursed or financed from insurance or condemnation proceeds not
constituting Net Cash Proceeds of Sale and (B) expenditures for leased
Inventory.
"Capital Lease" means any lease of any property (whether real,
personal or mixed) by a Person as lessee which, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that Person.
"Capital Stock" means, with respect to any Person, any capital
stock of such Person, regardless of class or designation, and all warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls or
claims of any character with respect thereto.
"Caribe" means Caribe Aviation, Inc., a Florida corporation
and wholly-owned Subsidiary of Aviation Sales Maintenance, Repair & Overhaul
Company, a Delaware corporation and wholly-owned Subsidiary of Parent.
8
"Cash Collateral" means cash or Cash Equivalents held by the
Agent, any of the Issuing Banks or any of the Lenders as security for the
Obligations.
"Cash Collateral Account" means an interest bearing account at
Citibank's offices in New York, New York designated by the Agent into which Cash
Collateral shall be deposited. The Cash Collateral Account shall be under the
sole dominion and control of the Agent, provided that all amounts deposited
therein shall be held by the Agent for the benefit of the Holders and shall be
subject to the terms of Section 12.03.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States government and backed
by the full faith and credit of the United States government; and (ii) domestic
and Eurodollar certificates of deposit and time deposits, bankers' acceptances,
commercial paper, and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations), which, at the time of
acquisition, are rated A-1 (or better) by Standard & Poor's Rating Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc., or P-1 (or better) by ▇▇▇▇▇'▇ Investors Services,
Inc.; provided, that (x) the maturities of such Cash Equivalents shall not
exceed one year and (y) such Cash Equivalents shall be maintained in investment
and other accounts of the Agent at Citibank or accounts at other investment
banks or financial institutions acceptable to the Agent and pledged to the Agent
as part of the Collateral.
"Cash Interest Expense" means, for any Person for any period,
total interest expense, whether paid or accrued, but without duplication,
(including the interest component of Capital Leases but net of the difference
between payments received by such Person and its Subsidiaries on all Hedge
Agreements and payments made by such Person and its Subsidiaries on all Hedge
Agreements other than the initial payments made to enter into such Hedge
Agreements) of such Person and its Subsidiaries, which is payable in cash, all
as determined in conformity with GAAP.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.ss.ss.9601 et seq., any
amendments thereto, any successor statutes, and any regulations promulgated
thereunder.
"Change of Control" means (i) with respect to the Parent, (a)
the occurrence of a change in more than fifty percent (50%) of the Parent Board
or (b) any Person acquiring, directly or indirectly, voting control of
thirty-five percent (35%) or more of the issued and outstanding Capital Stock of
Parent and (ii) with respect to any Borrower, the Parent ceasing to own,
directly or indirectly, and retain voting control of all issued and outstanding
Capital Stock of such Borrower, in the case of any of (i)(a), (i)(b) or (ii),
without the prior written consent of the Lenders, which consent shall not be
unreasonably withheld.
"Citibank" means Citibank, N.A., a national banking
association.
"Citicorp" means Citicorp USA, Inc., a Delaware corporation.
"Claim" means any claim or demand, by any Person, of
whatsoever kind or nature for any alleged Liabilities and Costs, whether based
in contract, tort, implied or express
▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ liability, criminal or civil statute, Permit, ordinance or
regulation, common law or otherwise.
"Collateral" means all Property and interests in Property now
owned or hereafter acquired by any Borrower or any Guarantor upon which a Lien
is granted under any of the Loan Documents.
"Collateral Documents Amendment" means that certain Collateral
Documents Amendment dated as of February 18, 2000 among the Borrowers,
Guarantors, Agent and Citicorp.
"Collection Account" means each lock-box and blocked
depository account maintained by a Borrower or any Guarantor subject to a
Collection Account Agreement for the collection of Receivables and other
proceeds of Collateral.
"Collection Account Agreement" means a written agreement,
substantially in the form attached hereto as Exhibit C with such modifications
as the Agent, from time to time, deems acceptable, among a Borrower or a
Guarantor, the Agent, and, as applicable, each of the banks at which a Borrower
or a Guarantor maintains a Collection Account.
"Commercial Letter of Credit" means any documentary letter of
credit issued by an Issuing Bank pursuant to Section 3.01 for the account of a
Borrower or for the account of any of a Borrower's Subsidiaries or Leasing if
the Borrowers are jointly and severally liable for reimbursement of amounts
drawn under such letter of credit, which is drawable upon presentation of
documents evidencing the sale or shipment of goods purchased by a Borrower, such
a Subsidiary or Leasing in the ordinary course of its business.
"Commission" means the Securities and Exchange Commission and
any Person succeeding to the functions thereof.
"Compliance Certificate" is defined in Section 8.01(d).
"Concentration Account" means the depository account
maintained at Citibank in New York, New York, or such other financial
institution designated for such purpose by the Agent into which collections of
Receivables, other proceeds of Collateral and other amounts are transferred
pursuant to the terms of the Collection Account Agreements or otherwise as
described in Section 4.04.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, radioactive materials, asbestos (in any form or condition),
polychlorinated biphenyls (PCBs), or any constituent of any such substance or
waste, and includes, but is not limited to, these terms as defined in federal,
state or local laws or regulations.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument to which that Person
10
is a party or by which it or any of its properties is bound, or to which it or
any of its properties is subject.
"Cure Loans" is defined in Section 4.02(b)(v)(C).
"Customary Permitted Liens" means
(i) Liens (other than Environmental Liens and Liens in favor
of the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(iii) Liens (other than any Lien in favor of the PBGC)
incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed
money), surety, appeal and performance bonds; provided that (A) all
such Liens do not in the aggregate materially detract from the value of
a Borrower's or any of its Subsidiaries' assets or Property or
materially impair the use thereof in the operation of their respective
businesses, and (B) all Liens of attachment or judgment and Liens
securing bonds to stay judgments or in connection with appeals do not
secure at any time an aggregate amount exceeding $500,000; and
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of Real Property which do not interfere with
the ordinary conduct of the business of a Borrower or any of its
Subsidiaries.
"Design" means Aircraft Interior Design, Inc., a Florida
corporation.
"Designated Prepayment" means each mandatory prepayment
required by clauses (i) and (ii) of Section 4.01(b); provided, however, that in
the event any of the Supplemental Term Loan is outstanding at the time of a
Borrower's or Guarantor's receipt of Net Cash Proceeds of Sale with respect to
the sale, transfer or other disposition of Property identified on Schedule
1.01.1 attached hereto and made a part hereof, the amount of such Net Cash
Proceeds which shall be deemed a Designated Prepayment shall be reduced, after
application thereof to the Loans as provided in Section 4.01(b)(vi)(C)(1), (2),
and (3), by an amount equal to the lesser of (a) the remaining balance thereof
or (b) the then outstanding balance of the Supplemental Term Loan.
11
"Distribution" means Aviation Sales Distribution Company, a
Delaware corporation and wholly-owned Subsidiary of Parent.
"DOL" means the United States Department of Labor and any
Person succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United States.
"Domestic Lending Office" means, with respect to any Lender,
such Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrowers and the Agent.
"EBITDA" means, for any Person for any period, the amount
calculated, without duplication, for such period as (i) Net Income of such
Person, plus (ii) depreciation and amortization expense of such Person and its
Subsidiaries, plus (iii) Cash Interest Expense of such Person, plus (iv)
federal, state, and local income taxes deducted from Net Income of such Person
in accordance with GAAP, plus (v) any other items that may be approved by the
Agent and the Requisite Lenders (in their sole discretion) which have been
included in the determination of Net Income of such Person, minus (vi)
extraordinary gains of such Person and its Subsidiaries.
"Effective Date" means May 31, 2000.
"Eligibility Reserves" means, as of three (3) Business Days
after the date of written notice of any determination thereof to the Borrowers
by the Agent, or to the Borrowers and the Agent by the Requisite Lenders, such
amounts as the Agent, or the Requisite Lenders, as the case may be, in the
exercise of its or their reasonable credit judgment, may from time to time
establish against the gross amounts of Eligible Aircraft, Eligible Inventory and
Eligible Receivables to reflect risks or contingencies arising after the
Effective Date which may affect such items.
"Eligible Aircraft" means the Airbus Series A300B4 aircraft
and related engines owned by Leasing and identified on Schedule 1.01.2 attached
hereto and made a part hereof and not subject to any lease agreement.
"Eligible Assignee" means (i) a Lender or any Affiliate
thereof or any Approved Fund; (ii) a commercial bank having total assets in
excess of $2,500,000,000; (iii) the central bank of any country which is a
member of the Organization for Economic Cooperation and Development; or (iv) a
finance company, insurance company, other financial institution or fund,
acceptable to the Agent, which is regularly engaged in making, purchasing or
investing in loans and having total assets in excess of $300,000,000, and (v) in
the cases of Persons described in clauses (ii) through (iv) above, are consented
to by Distribution, which consent shall not be unreasonably withheld or delayed
(and shall not be required upon the occurrence and during the continuance of an
Event of Default).
"Eligible Inventory" means, as of the date of determination
therefor, all Inventory of the Borrowers consisting of commercial aircraft spare
parts which, when scheduled to the
12
Agent on a Borrowing Base Certificate and at all times thereafter, (i) is in the
required quantity and in the required condition as set forth on such Borrowing
Base Certificate, (ii) is located at a Borrower's owned or leased warehouses in
the United States or is an engine located in the United States on a bailee's
premises undergoing conversion or repair, (iii) subject to a first priority
perfected Lien in favor of the Agent for the benefit of the Holders, and (iv)
does not consist of:
(1) goods in transit; or
(2) goods held on consignment or any similar arrangement, including,
without limitation, goods held by a Borrower but owned by a customer of a
Borrower; or
(3) goods which are subject to a Lien in favor of a bailee, except (A)
with respect to aircraft undergoing conversion, Liens in favor of the bailee
thereof for supplier and materialman Liens which are otherwise Customary
Permitted Liens and (B) with respect to aircraft engines undergoing conversion
or repair in possession of bailees, Liens in favor of such bailees which have
executed a letter agreement in form and substance satisfactory to the Agent (and
substantially in the applicable form attached as part of Exhibit D); or
(4) goods located on premises with respect to which the Agent has not
received a landlord's waiver in form and substance satisfactory to the Agent
(and substantially in the applicable form attached as part of Exhibit D) within
the time required by the terms of this Agreement; or
(5) goods constituting "Scrap/Out of Date Material"; or
(6) goods of TIMCO located at Oscoda, Michigan prior to such time as a
computer system is operational which is determined by the Agent to be adequate
to provide reporting as to such goods as components of the Borrowing Base as and
when required by the terms of this Agreement; or
(7) goods of Distribution which (A) as of August 31, 2000, were
acquired in or prior to 1995, (B) as of November 30, 2000, were acquired in or
prior to 1996, (C) as of November 30, 2001, were acquired in or prior to 1997;or
(8) goods consisting of engines which are Leased Inventory; or
(9) Leased Inventory which is not stored or maintained in an
identifiable, segregated area disclosed to the Agent in the United States or in
a location and on terms satisfactory to the Agent.
"Eligible Receivables" means each Receivable of the Borrowers
which, when scheduled to the Agent and at all times thereafter, is not of any of
the following types:
(i) it is due or unpaid more than ninety (90) days after the
date of the original invoice issued by the applicable Borrower with
respect to the sale giving rise thereto; or
13
(ii) it arises out of (a) a sale not made in the ordinary
course of the applicable Borrower's business or (b) a sale to a Person
which is an Affiliate of a Borrower or controlled by an Affiliate of a
Borrower; or
(iii) it fails to meet or violates any warranty,
representation or covenant contained in this Agreement or any of the
other Loan Documents relating directly or indirectly to the Receivables
of the Borrowers; or
(iv) the account debtor (a) is also the applicable Borrower's
supplier or creditor and the Receivable is or may become subject to any
right of setoff by the account debtor, and such account debtor has not
entered into an agreement with the Agent with respect to the waiver of
rights of setoff which is in form and substance satisfactory to the
Agent, or (b) has disputed liability with respect to such Receivable,
or made any claim with respect to any other Receivable due from such
account debtor to such Borrower, in which cases the Receivable shall be
ineligible to the extent of (I) such setoff with respect to which an
agreement as described in clause (a) above is not in effect, (II) such
dispute or (III) such claim; or
(v) the account debtor has filed a petition for bankruptcy or
any other petition for relief under the Bankruptcy Code or any similar
statute (unless the account debtor is a debtor-in-possession in a
Chapter 11 case and has available debtor-in-possession financing from
sources and under terms reasonably acceptable to the Agent and the
Receivable is entitled to priority under Section 507 of the Bankruptcy
Code as an administrative expense allowed under Section 503(b) of the
Bankruptcy Code), made an assignment for the benefit of creditors, or
if any petition or other application for relief under the Bankruptcy
Code or any similar statute has been filed against the account debtor,
or if the account debtor has failed, suspended its business operations,
become insolvent, suffered a receiver or a trustee to be appointed for
any of its assets or affairs; or
(vi) the sale is to an account debtor outside the United
States, unless (a) the account debtor's obligations (or that portion of
such obligations which is acceptable to the Agent) with respect to such
sale is secured by a letter of credit, guaranty or eligible bankers'
acceptance having terms, and from such issuers and confirmation banks,
as are acceptable to the Agent or (b) such account debtor is identified
Schedule 1.01.3 or otherwise acceptable to the Requisite Lenders as
confirmed by the Agent to Distribution in writing or (c) such account
debtor is located in a foreign jurisdiction identified on Schedule
1.01.3 or otherwise acceptable to Requisite Lenders as confirmed by the
Agent to Distribution in writing; or
(vii) the sale is on a ▇▇▇▇-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment, or any other repurchase
or return basis; or
(viii) the Agent believes, in the exercise of its reasonable
credit judgment, or the Requisite Lenders believe, in the exercise of
their reasonable
14
credit judgment, that collection of such Receivable is insecure or that
such Receivable may not be paid by reason of the account debtor's
financial inability to pay; or
(ix) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable
Borrower assigns its right to payment of such Receivable to the Agent
pursuant to the Assignment of Claims Act of 1940, as amended, (31
U.S.C. ss. 3727); or
(x) the Inventory of the applicable Borrower, the sale of
which has given rise to such Receivable, has not been shipped and
delivered to the account debtor by such Borrower and accepted by the
account debtor or the services, the performance of which has given rise
to such Receivable, have not been performed by such Borrower and
accepted by the account debtor; or
(xi) the Receivable(s) of the respective account debtor
exceed(s) a credit limit determined by the Agent, in the exercise of
its reasonable credit judgment, or determined by the Requisite Lenders,
in the exercise of their reasonable credit judgment, at any time or
times hereafter, in which case such Receivable(s) shall be ineligible
to the extent such Receivable(s) exceed(s) such limit; or
(xii) the Agent does not have a senior, perfected security
interest in such Receivable or such Receivable is subject to a Lien
which is not permitted under Section 10.03; or
(xiii) the account debtor is located in the state of New
Jersey or Minnesota and the applicable Borrower has not filed and
maintained effective (unless exempt from the requirements for filing) a
current Business Activity Report with the appropriate Governmental
Authority in the states of Minnesota and/or New Jersey, as applicable;
or
(xiv) it is owing by an account debtor for which fifty percent
(50%) or more of the Receivables owing by such account debtor to the
applicable Borrower are due or unpaid more than ninety (90) days after
the date of the original invoices issued by such Borrower with respect
to the sales giving rise thereto; or
(xv) it is subject to contractual allowances, in which case
such Receivable(s) shall be ineligible to the extent of the amount of
such contractual allowances; or
(xvi) it is a Receivable arising from sales or services the
records with respect to which are maintained at Oscoda, Michigan, prior
to such time as a computer system is operational which is determined by
the Agent to be adequate to provide reporting as to such Receivables as
components of the Borrowing Base as and when required by the terms of
this Agreement; or
15
(xvii) it is an unbilled Receivable, except to the extent
specifically provided in the clause (iv) or clause (v) of the
definition of the term "Borrowing Base".
"Environmental, Health or Safety Requirements of Law" means
all laws, rules, regulations and determinations of any arbitrator, court or
other Governmental Authority derived from or relating to any federal, state or
local law, ordinance, rule, regulation, Permit, license or other binding
determination of any Governmental Authority relating to, imposing liability or
standards concerning, or otherwise addressing, the environment, health and/or
safety, including, but not limited to the Clean Air Act, the Clean Water Act,
CERCLA, RCRA, any so-called "Superfund" or "Superlien" law, the Toxic Substances
Control Act, OSHA, and applicable public health codes, each as from time to time
in effect.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental, Health or Safety
Requirement of Law, or (ii) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Environmental Property Transfer Acts" means any applicable
Requirement of Law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the transfer, sale, lease or closure of
any Property or deed or title for any Property for environmental reasons,
including, but not limited to, any so-called "Industrial Site Recovery Acts" or
"Responsible Property Transfer Acts".
"Equipment" means, with respect to any Person, all of such
Person's present and future (i) equipment, including, without limitation,
machinery, manufacturing, distribution, selling, data processing and office
equipment, assembly systems, tools, molds, dies, fixtures, appliances,
furniture, furnishings, vehicles, vessels, aircraft, aircraft engines, and trade
fixtures, (ii) other tangible personal property (other than such Person's
Inventory), and (iii) any and all accessions, parts and appurtenances attached
to any of the foregoing or used in connection therewith, and any substitutions
therefor and replacements, products and proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, 29 U.S.C.ss.ss.1000 et seq., any amendments thereto, any successor
statutes, and any regulations or guidance promulgated thereunder.
"ERISA Affiliate" means (i) any corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as the Borrowers; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Internal Revenue Code) with
the Borrower; and (iii) a member of the same affiliated service group (within
the meaning of Section 414(m) of the Internal Revenue Code) as the Borrowers,
any corporation described in clause (i) above or any partnership or trade or
business described in clause (ii) above.
"Eurodollar Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name under the
heading "Eurodollar Affiliate" on
16
the signature pages hereof or on the Assignment and Acceptance by which it
became a Lender or such Affiliate of a Lender as it may from time to time
specify by written notice to Distribution and the Agent.
"Eurodollar Interest Payment Date" means the first day of each
calendar month (for the immediately preceding calendar month).
"Eurodollar Interest Period" is defined in Section 5.03 (b).
"Eurodollar Interest Rate Determination Date" is defined in
Section 5.03(c).
"Eurodollar Lending Office" means, with respect to any Lender,
the office or offices of such Lender (if any) set forth below such Lender's name
under the heading "Eurodollar Lending Office" on the signature pages hereof or
on the Assignment and Acceptance by which it became a Lender or such office or
offices of such Lender as it may from time to time specify by written notice to
Distribution and the Agent.
"Eurodollar Rate" means, with respect to any Eurodollar
Interest Period applicable to a Eurodollar Rate Loan, an interest rate per annum
obtained by dividing (i) the Base Eurodollar Rate applicable to that Eurodollar
Interest Period by (ii) a percentage equal to 100% minus the Eurodollar Reserve
Percentage in effect on the relevant Eurodollar Interest Rate Determination
Date.
"Eurodollar Rate Loans" means those Loans which bear interest
at a rate determined by reference to the Eurodollar Rate and the Eurodollar Rate
Margin as provided in Section 5.01(a).
"Eurodollar Rate Margin" means, as of any date of
determination, (i) during the period commencing on the Effective Date through
the day on which the Overadvance Amount is repaid in full, a per annum rate
equal to four and one-quarter percent (4.25%) (subject to the proviso set forth
at the end of this definition), (ii) during the period commencing on the day
immediately succeeding the day on which the Overadvance Amount is repaid in full
through the day on which the Revolving Credit Commitments shall have been
reduced to a maximum of $250,000,000, a per annum rate equal to three and
three-quarters percent (3.75%) (subject to the proviso set forth at the end of
this definition), (iii) during the period commencing on the day immediately
succeeding the day on which the Revolving Credit Commitments have been reduced
to a maximum of $250,000,000 through the day on which the Revolving Credit
Commitments shall have been reduced to a maximum of $200,000,000, a per annum
rate equal to three and one-quarter percent (3.25%) (subject to the proviso set
forth below), (iv) during the period commencing on the day immediately
succeeding the day on which the Revolving Credit Commitments have been reduced
to a maximum of $200,000,000 through the date on which the Borrowers deliver to
the Agent and Lenders a Compliance Certificate, as and when required by Section
8.01(d), with respect to the Fiscal Quarter ending December 31, 2000, a per
annum rate equal to three percent (3.00%), and (v) thereafter, provided that the
Revolving Credit Commitments do not then exceed $250,000,000, the rate set forth
below opposite the then applicable Performance Level set forth below:
17
Level Eurodollar Rate Margin
----- ----------------------
1 2.75%
2 3.00%
3 3.50%
provided, however, that, notwithstanding the foregoing, in the event the
Revolving Credit Commitments exceed $250,000,000 on July 31, 2000, the
Eurodollar Rate Margin shall increase, as of August 1, 2000 and each successive
November 1, February 1, May 1 and August 1, by one-quarter of one percent
(0.25%) until such time as the Revolving Credit Commitments do not exceed
$250,000,000, whereupon the increases in the Eurodollar Rate Margin made in
compliance with this sentence shall immediately terminate and the Eurodollar
Rate Margin shall be determined as set forth in clause (i), (ii), (iv) or (v)
above, as applicable.
"Eurodollar Reserve Percentage" means, for any day, that
percentage which is in effect on such day, as prescribed by the Federal Reserve
Board for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York, New York with
deposits exceeding Five Billion Dollars ($5,000,000,000) in respect of
"Eurocurrency Liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Eurodollar
Rate Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any bank to United States
residents.
"Event of Default" means any of the occurrences set forth in
Section 12.01 after the expiration of any applicable grace period, as expressly
provided in Section 12.01.
"Excess Borrowing Amount" means $35,405,000, as the same is
reduced by the payments required under Section 2.04.
"Fair Market Value" means, with respect to any asset, the
value of the consideration obtainable in a sale of such asset in the open
market, assuming a sale by a willing seller to a willing purchaser dealing at
arm's length and arranged in an orderly manner over a reasonable period of time,
each having reasonable knowledge of the nature and characteristics of such
asset, neither being under any compulsion to act, and, if in excess of $250,000,
as determined in an appraisal of such asset, provided that for purposes of
Section 10.02 such appraisal was performed relatively contemporaneously with
such sale by an independent third party appraiser and the basic assumptions
underlying such appraisal have not materially changed since the date thereof.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day in New York, New York, for the next
preceding Business Day) in New York, New York by the Federal Reserve Bank of New
York, or if such rate is not so published for any day which is a Business Day in
New York, New York, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
18
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any Governmental Authority succeeding to its
functions.
"Fee Letter" means that certain fee letter addressed to the
Agent dated April 27, 2000.
"Finance Affiliate" means Aviation Sales Finance Company, a
Delaware corporation and wholly-owned Subsidiary of the Parent.
"Financial Statements" means (i) statements of income and
retained earnings, statements of cash flow, and balance sheets, (ii) such other
financial statements as the Parent and/or and its Subsidiaries shall routinely
and regularly prepare and (iii) such other financial statements as the Agent or
the Requisite Lenders may from time to time reasonably specify.
"Fiscal Quarter" means a fiscal quarter in a Fiscal Year.
"Fiscal Year" means the fiscal year of the Parent and its
Subsidiaries for accounting and tax purposes, which shall be the 52-week period
ending on December 31 of each calendar year.
"Fixed Charge Coverage Ratio" means, for any Person for any
period, the ratio of (a) the amount calculated as (i) EBITDA of such Person
minus (ii) all taxes paid in cash during such period by such Person and its
Subsidiaries (net of tax refunds received in cash during such period by such
Person and its Subsidiaries) minus (iii) the aggregate amount of Capital
Expenditures made in cash during such period by such Person and its Subsidiaries
to (b) the sum of (i) the aggregate amount of interest paid in cash on
Indebtedness of such Person and its Subsidiaries during such period (net of
amounts under Hedge Agreements and interest income, in each case actually
received in cash, without duplication) plus (ii) the aggregate amount of
scheduled payments of principal of Funded Debt of such Person during such
period.
"Foreign Employee Benefit Plan" means any employee benefit
plan as defined in Section 3(3) of ERISA which is maintained or contributed to
for the benefit of the employees of a Borrower, any of its Subsidiaries, or any
of its ERISA Affiliates and is not covered by ERISA pursuant to ERISA Section
4(b)(4).
"Foreign Subsidiary" means any Subsidiary of Parent or a
Borrower which is domiciled outside of the United States of America and its
states, districts and possessions.
"Fronting Fee" is defined in Section 5.02(a).
"Funded Debt" means, with respect to any Person, Indebtedness
of such Person and its Subsidiaries for borrowed money (determined in accordance
with GAAP), including, without limitation, Indebtedness under Capital Leases and
the TROL Lease.
"Funding Date" means, with respect to any Loan, the date of
funding of such Loan.
19
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the American Institute of Certified
Public Accountants' Accounting Principles Board and Financial Accounting
Standards Board or in such other statements by such other entity as may be in
general use by significant segments of the accounting profession as in effect on
the date hereof (unless otherwise specified herein as in effect on another date
or dates).
"General Intangibles" means, with respect to any Person, all
of such Person's present and future (i) general intangibles, (ii) rights,
interests, choses in action, causes of action, claims and other intangible
property of every kind and nature (other than Receivables), (iii) corporate and
other business records, (iv) loans, royalties, and other obligations receivable,
(v) trademarks, registered trademarks, trademark applications, service marks,
registered service marks, service ▇▇▇▇ applications, patents, registered
patents, patent applications, trade names, rights of use of any name, labels,
fictitious names, inventions, designs, trade secrets, computer programs,
software, printouts and other computer materials, goodwill, registrations,
copyrights, copyright applications, permits, licenses, franchises, customer
lists, credit files, correspondence, and advertising materials, (vi) customer
and supplier contracts, firm sale orders, rights under license and franchise
agreements, rights under tax sharing agreements, and other contracts and
contract rights, (vii) interests in partnerships and joint ventures, (viii) tax
refunds and tax refund claims, (ix) right, title and interest under leases,
subleases, licenses and concessions and other agreements relating to property,
(x) deposit accounts (general or special) with any bank or other financial
institution, (xi) credits with and other claims against third parties (including
carriers and shippers), (xii) rights to indemnification and with respect to
support and keep-well agreements, (xiii) reversionary interests in pension and
profit sharing plans and reversionary, beneficial and residual interests in
trusts, (xiv) proceeds of insurance of which such Person is beneficiary, (xv)
letters of credit, guarantees, Liens, security interests and other security held
by or granted to such Person, (xvi) uncertificated securities, and (xvii)
dividends and distributions and claims with respect to dividends and
distributions.
"Governmental Authority" means any nation or government, any
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantor" means any of the Parent; Finance Affiliate;
Manufacturing; MR&O; Aviation Sales SPS I, Inc.; Aero Hushkit Corporation, TIMCO
Engineered Systems, Inc., and Aviation Sales Property Management Corp., each a
Delaware corporation; AVSRE, L.P., a Delaware limited partnership; Hydroscience,
Inc., a Texas corporation; and each Subsidiary of a Borrower or one of the
foregoing named Guarantors which is not a Foreign Subsidiary or a Borrower.
"Hedge Agreement" means any agreement, including, without
limitation, interest rate exchange, swap, collar or cap agreement, interest rate
future or option contract, currency swap agreement, currency future or option
contract, and other similar agreement, evidencing an agreement or arrangement
intended to protect against fluctuation in interest rates and/or foreign
exchange rates, conversion rates for conversion of foreign currencies to
Dollars, or inability of any foreign Person to transfer Dollars to a Person in
the United States.
20
"Holder" means any Person entitled to enforce any of the
Obligations, whether or not such Person holds any evidence of Indebtedness,
including, without limitation, the Agent, each Lender and each Issuing Bank.
"Impermissible Qualification" means any qualification or
exception to any opinion or certification of an independent public accountant
which (i) expresses concern about whehter or not the subject Person will be able
to meet its obligations as such become due, or otherwise will be able to operate
or conduct its business in the future, (ii) related to the limited scope of
examination of matters relevant to such financial statement, or (iii) relates to
the treatment or classification of any item in the subject Financial Statement
and which, as a condition to its removal, would require an adjustment to such
item the effect of which would be to cause there to be a Potential Event of
Default or Event of Default.
"Indebtedness", as applied to any Person, means, at any time,
without duplication, (a) all indebtedness, obligations or other liabilities of
such Person (i) for borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments, and any accrued interest, fees
and charges relating thereto, (ii) under profit payment agreements or in respect
of obligations to redeem, repurchase or exchange any Securities of such Person
or to pay dividends in respect of any stock, (iii) with respect to letters of
credit issued for such Person's account, (iv) to pay the deferred purchase price
of property or services, except accounts payable and accrued expenses arising in
the ordinary course of business, (v) in respect of Capital Leases, (vi) which
are Accommodation Obligations or (vii) under warranties and indemnities; (b) all
indebtedness, obligations or other liabilities of such Person or others secured
by a Lien on any property of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by such Person, all as of such time; (c)
all indebtedness, obligations or other liabilities of such Person in respect of
Hedge Agreements, net of liabilities owed to such Person by the counterparties
thereon; (d) all preferred stock subject (upon the occurrence of any contingency
or otherwise) to mandatory redemption; (e) all ERISA obligations currently due
and payable; and (f) all contingent Contractual Obligations with respect to any
of the foregoing.
"Indemnified Matters" is defined in Section 15.03.
"Indemnitees" is defined in Section 15.03.
"Interest Coverage Ratio" means, for any period, the ratio of
(i) the EBITDA of the Parent and its Subsidiaries to (ii) the Cash Interest
Expense of the Parent and its Subsidiaries.
"Interest Reserve" means $2,000,000.
"Interim Liquidity Amount" means $9,595,000 as of the
Effective Date, which amount shall be reduced by $1,599,167 on the last day of
each calendar month commencing on June 30, 2000 and ending on October 31, 2000
and by $1,599,165 on November 30, 2000.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, any
successor statute and any regulations or guidance promulgated thereunder.
21
"Inventory" means, with respect to any Person, all of such
Person's present and future (i) inventory, (ii) goods, merchandise and other
personal property furnished or to be furnished under any contract of service or
intended for sale or lease, and all consigned goods and all other items which
have previously constituted Equipment of such Person but are then currently
being held for sale or lease in the ordinary course of such Person's business,
(iii) raw materials, work-in-process and finished goods, (iv) materials and
supplies of any kind, nature or description used or consumed in such Person's
business or in connection with the manufacture, production, packing, shipping,
advertising, finishing or sale of any of the property described in clauses (i)
through (iii) above, (v) goods in which such Person has a joint or other
interest or right of any kind (including, without limitation, goods in which
such Person has an interest or right as consignee), and (vi) goods which are
returned to or repossessed by such Person; in each case whether in the
possession of such Person, a bailee, a consignee, or any other Person for sale,
storage, transit, processing, use or otherwise, and any and all documents for or
relating to any of the foregoing.
"Investment" means, with respect to any Person, (i) any
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities, issued by any other Person, (ii) any purchase by that
Person of all or substantially all of the assets of a business conducted by
another Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business. The
amount of any Investment shall be the original cost of such Investment, plus the
cost of all additions thereto less the amount of any return of capital or
principal to the extent such return is in cash with respect to such Investment
without any adjustments for increases or decreases in value or write-ups,
write-downs or write-offs with respect to such Investment.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Issuing Banks" means Citibank and each Lender designated as
an "Issuing Bank" on the signature pages hereof or the signature page of the
Assignment and Acceptance by which it became a Lender and each other Lender
approved by the Agent and Distribution who has agreed to become an Issuing Bank
for the purpose of issuing Letters of Credit pursuant to Section 3.01.
"▇▇▇▇▇-▇▇▇▇▇" means AVS/▇▇▇▇▇-▇▇▇▇▇ Machine Company, a
Delaware corporation and wholly-owned Subsidiary of Manufacturing.
"Leased Inventory" means aircraft spare parts Inventory which
is subject to any lease agreement or arrangement.
"Leasing" means Aviation Sales Leasing Company, a Delaware
corporation and a wholly-owned Subsidiary of the Parent.
22
"Lender" means, as of the Effective Date, each of AmSouth
Bank, BankAtlantic, Citicorp, Citibank, N.A., Citizens Business Credit Company,
First Union Commercial Corporation, Fleet National Bank, ▇▇▇▇▇▇ Financial, Inc.,
IBJ Whitehall Business Credit Corporation, Mercantile Business Credit, Inc.,
National Bank of Canada, National City Commercial Finance, Inc., PNC Bank
National Association, and The International Bank of Miami, N.A. and, at any
other given time, each financial institution which is a party hereto as a
Lender, whether as aforesaid or pursuant to an Assignment and Acceptance.
"Lender Affiliate" means any financial institution that
directly or indirectly controls or is controlled by or is under common control
with a Lender.
"Letter of Credit" means any Commercial Letter of Credit or
Standby Letter of Credit.
"Letter of Credit Fee" is defined in Section 5.02(a).
"Letter of Credit Obligations" means, at any particular time,
the sum of (i) all outstanding Reimbursement Obligations, plus (ii) the
aggregate undrawn face amount of all outstanding Letters of Credit, plus (iii)
the aggregate face amount of all Letters of Credit requested by the Borrowers
but not yet issued (unless the request for an unissued Letter of Credit has been
denied by the designated Issuing Bank as referenced in Section 3.01(c)(i)).
"Letter of Credit Reimbursement Agreement" means, with respect
to a Letter of Credit, such form of application therefor and form of
reimbursement agreement therefor (whether in a single or several documents,
taken together) as the Issuing Bank from which the Letter of Credit is requested
may employ in the ordinary course of business for its own account, with such
modifications thereto as may be agreed upon by the Issuing Bank and the
applicant Borrower and as are not materially adverse (in the judgment of the
Issuing Bank and Agent) to the interests of the Lenders; provided, however, in
the event of any conflict between the terms of any Letter of Credit
Reimbursement Agreement and this Agreement, the terms of this Agreement shall
control.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death, punitive damages,
economic damages, consequential damages, treble damages, intentional, willful or
wanton injury, damage or threat to the environment, natural resources or public
health or welfare, costs and expenses (including, without limitation, attorney,
expert and consulting fees and costs and fees and costs associated with any
investigation, feasibility or Remedial Action studies), fines, penalties and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale or other title retention agreement,
deposit arrangement, security interest, encumbrance (including, without
limitation, easements, rights-of-way, zoning restrictions and the like), lien
(statutory or other and including, without limitation, any Environmental Lien),
option, preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever in respect of any property of a
Person, whether granted voluntarily or imposed by law, and includes the interest
of a lessor under a Capital Lease or under any
23
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement or similar notice (other
than a financing statement filed by a "true" lessor pursuant to ss. 9-408 of the
Uniform Commercial Code), naming the owner of such property as debtor, under the
Uniform Commercial Code or other comparable law of any jurisdiction.
"Loan" is defined in Section 2.01(a)(ii).
"Loan Account" is defined in Section 4.03(b).
"Loan Documents" means this Agreement, the Notes, Hedge
Agreements to which any Lender or any Affiliate of a Lender is a party, and all
other instruments, agreements and written Contractual Obligations between any
Guarantor, any Borrower or any Subsidiary of a Borrower, and any of the Agent,
any Lender or any Issuing Bank delivered to either the Agent, such Lender or
such Issuing Bank pursuant to or in connection with the transactions
contemplated hereby.
"Manufacturing" means Aviation Sales Manufacturing Company, a
Delaware corporation and wholly-owned Subsidiary of Parent.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Effect" means a material adverse effect upon
(i) the financial condition, operations, assets or prospects of the Borrowers or
the Borrowers and the Guarantors taken as a whole, (ii) the ability of the
Borrowers or any Guarantor to perform their respective obligations under the
Loan Documents, or (iii) the ability of the Lenders, the Issuing Banks or the
Agent to enforce any of the Loan Documents.
"Maximum Revolving Credit Amount" means, at any particular
time, the amount equal to the lesser of (i) the amount equal to the Revolving
Credit Commitments at such time minus the Texas Tax Reserve at such time, if
such Texas Tax Reserve exceeds $200,000, and (ii) the Borrowing Base at such
time minus the Texas Tax Reserve at such time, if such Texas Tax Reserve exceeds
$200,000.
"MIS" means computerized management information system for
recording and maintenance of information regarding purchases, sales, aging,
categorization, and locations of Inventory, creation and aging of Receivables,
and accounts payable (including agings thereof).
"MR&O" means Aviation Sales Maintenance, Repair & Overhaul
Company, a Delaware corporation and wholly-owned Subsidiary of Parent.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA (other than a Foreign Employee Benefit Plan)
which is, or within the immediately preceding six (6) years was, contributed to
by either a Borrower or any ERISA Affiliate or in respect of which a Borrower or
any ERISA Affiliate has assumed any liability.
"Net Cash Proceeds of Issuance of Equity Securities" means net
cash proceeds (including cash, equivalents readily convertible into cash, and
such proceeds of any notes
24
received as consideration or any other non-cash consideration) received by any
Borrower or Guarantor on account of the issuance of (i) equity Securities of the
Parent, (ii) equity Securities of a Borrower or Subsidiary of the Parent to any
Person other than the Parent, (iii) equity Securities of any Subsidiary of a
Borrower to any Person other than such Borrower.
"Net Cash Proceeds of Issuance of Indebtedness" means net cash
proceeds (including cash, equivalents readily convertible into cash, and such
proceeds of any notes received as consideration or any other non-cash
consideration) received by any Borrower or Guarantor on account of the issuance
of (i) Indebtedness (other than Indebtedness permitted under Section 10.01) of
any Borrower or any Subsidiary of a Borrower or (ii) Indebtedness (other than
Indebtedness of Parent described on Schedule 1.01.4 attached hereto and made a
part hereof) of the Parent, in each case net of all transaction costs and
underwriters' discounts with respect thereto.
"Net Cash Proceeds of Sale" means (i) proceeds received by any
Borrower or Guarantor in cash (including cash, equivalents readily convertible
into cash, and such proceeds of any notes received as consideration or any other
non-cash consideration) from the sale, assignment or other disposition of (but
not the lease or license of) any Property, other than sales permitted under
clauses (c), (d)(ii)(A), and (e) of Section 10.02, net of (a) the costs of sale,
assignment or other disposition, (b) any income, franchise, transfer or other
tax liability arising from such transaction and (c) amounts applied to the
repayment of Indebtedness (other than the Obligations) secured by a Lien
permitted by Section 10.03 on the asset disposed of, if such net proceeds arise
from any individual sale, assignment or other disposition or from any group of
related sales, assignments or other dispositions; and (ii) to the extent
provided in Section 9.08, proceeds of insurance on account of the loss of or
damage to any such Property or Properties, and payments of compensation for any
such Property or Properties taken by condemnation or eminent domain.
"Net Income" means, for any Person for any period, the net
earnings (or loss) after taxes of such Person and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP.
"Non Pro Rata Loan" is defined in Section 4.02(b)(v).
"Note" means a promissory note in the form attached hereto as
Exhibit E payable to a Lender, evidencing Loans made by such Lender and executed
by the Borrowers upon the request of a Lender as required by Section 4.03(a), as
the same may be amended, supplemented, modified or restated from time to time;
"Notes" means, collectively, all of such Notes outstanding at any given time.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit F attached hereto and made a part hereof.
"Notice of Conversion/Continuation" means a notice
substantially in the form of Exhibit G attached hereto and made a part hereof.
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrowers to the Agent, any
Lender, any Issuing Bank, any Affiliate of
25
the Agent, any Lender or any Issuing Bank, or any Person entitled to
indemnification pursuant to Section 15.03 of this Agreement, of any kind or
nature, present or future, arising under this Agreement, the Notes or any other
Loan Document, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether arising by reason
of an extension of credit, opening or amendment of a Letter of Credit or payment
of any draft drawn thereunder, loan, guaranty, indemnification, foreign exchange
contract, Hedge Agreement or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
includes, without limitation, all interest, charges, expenses, fees, attorneys'
fees and disbursements and any other sum chargeable to the Borrowers under this
Agreement or any other Loan Document and all "Obligations" outstanding as of the
Effective Date under the Predecessor Agreement.
"Officer's Certificate" means a certificate executed on behalf
of a Borrower by its president, chief financial officer, or treasurer or on
behalf of the Borrowers by the president, chief financial officer or treasurer
of any of them.
"Operating Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as lessee which
is not a Capital Lease.
"Organizational Documents" means, with respect to any
corporation, limited liability company, or partnership (i) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such corporation or limited liability company, (ii) the
partnership agreement executed by the partners in the partnership, (iii) the
by-laws (or the equivalent governing documents) of the corporation, limited
liability company or partnership, and (iv) any document setting forth the
designation, amount and/or relative rights, limitations and preferences of any
class or series of such corporation's Capital Stock or such limited liability
company's or partnership's equity or ownership interests.
"OSHA" means the Occupational Safety and Health Act of 1970,
29 U.S.C.ss.ss.651 et seq., any amendments thereto, any successor statutes and
any regulations or guidance promulgated thereunder.
"Overadvance Amount" means, as of any date of determination,
the sum of (i) the Interim Liquidity Amount as of such date plus the Excess
Borrowing Amount as of such date.
"Parent" means Aviation Sales Company, a Delaware corporation.
"Parent Board" means Board of Directors of the Parent
comprised of those Persons who are members of such Board of Directors on the
Effective Date and identified on Schedule 1.01.5 attached hereto and made a part
hereof and those members of such Board of Directors who are elected as
referenced in Section 12.01(o).
"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Performance Level 1" means that level of financial
performance of the Parent and its Subsidiaries, on a consolidated basis,
measured as of the end of a Fiscal quarter, at which
26
the ratio of Funded Debt of the Parent at such date to EBITDA of the Parent for
the then most recently ended four (4) Fiscal Quarter period is less than or
equal to 4.5 to 1.0.
"Performance Level 2" means that level of financial
performance of the Parent and its Subsidiaries, on a consolidated basis,
measured as of the end of a Fiscal Quarter, at which the ratio of Funded Debt of
the Parent at such date to EBITDA of the Parent for the then most recently ended
four (4) Fiscal Quarter period is greater than 4.5 to 1.0 and less than or equal
to 5.0 to 1.0.
"Performance Level 3" means that level of financial
performance of the Parent and its Subsidiaries, on a consolidated basis,
measured as of the end of a Fiscal Quarter, at which the ratio of Funded Debt of
the Parent at such date to EBITDA of the Parent for the then most recently ended
four (4) Fiscal Quarter period is greater than 5.0 to 1.0.
"Permits" means any permit, approval, authorization license,
variance, or permission required from a Governmental Authority or other Person
under an applicable Requirement of Law.
"Permitted Equity Securities Options" means the subscriptions,
options, warrants, rights, convertible securities and other agreements or
commitments relating to the issuance of equity Securities of the Parent
identified as such on Schedule 1.01.6.
"Permitted Existing Accommodation Obligations" means those
Accommodation Obligations identified as such on Schedule 1.01.7.
"Permitted Existing Indebtedness" means the Indebtedness of
the Parent and its Subsidiaries identified as such on Schedule 1.01.4.
"Permitted Existing Investments" means those Investments
identified as such on Schedule 1.01.8.
"Permitted Existing Liens" means the Liens on assets of the
Parent and its Subsidiaries identified as such on Schedule 1.01.9.
"Person" means any natural person, corporation, limited
liability company, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, any
other non-governmental entity, and any Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3)
of ERISA (other than a Foreign Employee Benefit Plan) in respect of which a
Borrower or any ERISA Affiliate is, or within the immediately preceding six (6)
years was, an "employer" as defined in Section 3(5) of ERISA or a Borrower or
any ERISA Affiliate has assumed any liability.
"Potential Event of Default" means an event which, with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.
"Predecessor Agreement" is defined in the preamble of this
Agreement.
27
"Process Agent" is defined in Section 15.17(a).
"Projections" means the respective consolidated and
consolidating financial projections of (i) the Parent and its Subsidiaries and
(ii) the Borrowers and their Subsidiaries (a) by business segment for each
calendar month during the period June - December 2000 and (b) for each of the
Fiscal Years ending in 2000, 2001 and 2002 (including, without limitation,
capital expenditure budget), in each instance, together with related
assumptions, prepared by Parent and dated as of the Effective Date.
"Property" means any Real Property or personal property,
plant, building, facility, structure, underground storage tank or unit,
Equipment, Inventory, General Intangible, Receivable, or other asset owned,
leased or operated by a Borrower or any Guarantor, as applicable, (including any
surface water thereon, and soil and groundwater thereunder).
"Pro Rata Share" means, with respect to any Lender, the
percentage obtained by dividing (i) such Lender's Revolving Credit Commitment
(in each case, as adjusted from time to time in accordance with the provisions
of this Agreement or any Assignment and Acceptance to which such Lender is a
party) by (ii) the aggregate amount of all of the Revolving Credit Commitments
(notwithstanding the termination of any Revolving Credit Commitments).
"Protective Advance" is defined in Section 13.09(a).
"Ratio of Senior Debt to EBITDA" means, for any period, the
ratio of (i) the amount equal to the Funded Debt of the Parent and its
Subsidiaries minus the principal amount outstanding under the Senior
Subordinated Notes calculated as of the last day of such period to (ii) EBITDA
of the Parent and its Subsidiaries for such period.
"RCRA" means the Resource Conservation and Recovery Act of
1976, 42 ▇.▇.▇.▇▇.▇▇. 6901 et seq., any amendments thereto, any successor
statutes, and any regulations promulgated thereunder.
"Real Property" means, with respect to any Person, all of such
Person's present and future right, title and interest (including, without
limitation, any leasehold estate) in (i) any plots, pieces or parcels of land,
(ii) any improvements, buildings, structures and fixtures now or hereafter
located or erected thereon or attached thereto of every nature whatsoever (the
rights and interests described in clauses (i) and (ii) above being the
"Premises"), (iii) all easements, rights of way, gores of land or any lands
occupied by streets, ways, alleys, passages, sewer rights, water courses, water
rights and powers, and public places adjoining such land, and any other
interests in property constituting appurtenances to the Premises, or which
hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all
hereditaments, gas, oil, minerals (with the right to extract, sever and remove
such gas, oil and minerals), and easements, of every nature whatsoever, located
in or on the Premises and (v) all other rights and privileges thereunto
belonging or appertaining and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to or of any of the rights
and interests described in clauses (iii) and (iv) above.
"Receivables" means, with respect to any Person, all of such
Person's present and future (i) accounts, (ii) contract rights, chattel paper,
instruments, documents, deposit accounts,
28
and other rights to payment of any kind, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of services, and
whether or not earned by performance, (iii) any of the foregoing which are not
evidenced by instruments or chattel paper, (iv) intercompany receivables, and
any security documents executed in connection therewith, (v) proceeds of any
letters of credit or insurance policies on which such Person is named as
beneficiary, (vi) claims against third parties for advances and other financial
accommodations and any other obligations whatsoever owing to such Person, (vii)
rights in and to all security agreements, leases, guarantees, instruments,
securities, documents of title and other contracts securing, evidencing,
supporting or otherwise relating to any of the foregoing, together with all
rights in any goods, merchandise or Inventory which any of the foregoing may
represent, and (viii) rights in returned and repossessed goods, merchandise and
Inventory which any of the same may represent, including, without limitation,
any right of stoppage in transit.
"Register" is defined in Section 15.01(c).
"Regulation A" means Regulation A of the Federal Reserve Board
as in effect from time to time.
"Regulation T" means Regulation T of the Federal Reserve Board
as in effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board
as in effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board
as in effect from time to time.
"Reimbursement Date" is defined in Section 3.01(d)(i)(A).
"Reimbursement Obligations" means the aggregate non-contingent
reimbursement or repayment obligations of the Borrowers with respect to amounts
drawn under Letters of Credit.
"Release" means any release, spill, emission, leaking,
pumping, pouring, dumping, injection, deposit, disposal, abandonment, or
discarding of barrels, containers or other receptacles, discharge, emptying,
escape, dispersal, leaching or migration into the indoor or outdoor environment
or into or out of any Property, including the movement of Contaminants through
or in the air, soil, surface water, groundwater or Property.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants; or (iii) investigate and determine if a
remedial response is needed and to design such a response and post-remedial
investigation, monitoring, operation and maintenance and care.
"Replacement Proceeds" means the amount of (i) proceeds of
insurance paid on account of the loss of or damage to any Property and awards of
compensation for Property taken by condemnation or eminent domain to the extent
actually used to replace, rebuild or restore the
29
Property so lost, damaged or taken, provided that (a) Distribution shall have
delivered written notice to the Agent that it, the other applicable Borrower, or
the applicable Guarantor intends to so replace, rebuild or restore such Property
and (b) the applicable Borrower or such applicable Guarantor replaces or
commences the restoration or rebuilding of such Property within 180 days after
the Agent's receipt of the proceeds of such insurance payment or condemnation
award and (ii) insurance paid on account of a business interruption occurrence
to the extent actually used in the restoration or conduct of the business
interrupted.
"Reportable Event" means any of the events described in
Section 4043(b) of ERISA and the regulations promulgated thereunder as in effect
from time to time other than an event for which the thirty (30) day notice
requirement has been waived by the PBGC.
"Requirements of Law" means, as to any Person, the charter and
by-laws or other organizational or governing documents of such Person, and any
law, rule or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or Permit or any Environmental, Health or
Safety Requirement of Law.
"Requisite Lenders" means Lenders whose Pro Rata Shares, in
the aggregate, are greater than fifty percent (50%); provided, however, that, in
the event any of the Lenders shall have failed to fund its Pro Rata Share of any
Loan requested by or on behalf of a Borrower which Lenders are obligated to fund
under the terms of this Agreement and any such failure has not been cured, then
for so long as such failure continues, "Requisite Lenders" means Lenders
(excluding all Lenders whose failure to fund their respective Pro Rata Shares of
such Loans have not been so cured) whose Pro Rata Shares represent more than
fifty percent (50%) of the aggregate Pro Rata Shares of such Lenders; provided,
further, however, that, in the event that the Revolving Credit Commitments have
been terminated pursuant to the terms of this Agreement, "Requisite Lenders"
means Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans are greater than
fifty percent (50%).
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any equity Securities of a
Borrower or any Guarantor which is a Subsidiary of Parent now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Securities
of a Borrower or any Guarantor which is a Subsidiary of Parent now or hereafter
outstanding, (iii) any payment or prepayment of principal of, premium, if any,
or interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Indebtedness owing at any time to any
Affiliate of a Borrower, (iv) any payment made to redeem, purchase, repurchase
or retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire equity Securities of a Borrower or any Guarantor which
is a Subsidiary of Parent now or hereafter
30
outstanding, and (v) any fees or other remuneration paid to Parent, Finance
Affiliate, Manufacturing, or any Subsidiary of a Borrower by a Borrower or any
Guarantor.
"Revolving Credit Availability" means, at any particular time,
the amount by which the Maximum Revolving Credit Amount at such time exceeds the
sum of (i) the Revolving Credit Obligations at such time plus (ii) the
outstanding balance of Protective Advances at such time.
"Revolving Credit Commitment" means, with respect to any
Lender, the obligation of such Lender to make Loans and to participate in
Letters of Credit pursuant to the terms and conditions of this Agreement, in an
aggregate amount at any time outstanding which shall not exceed the principal
amount set forth on Schedule 1.01.10 attached hereto and made a part hereof
under the heading "Revolving Credit Commitment" thereon or on the signature page
of the Assignment and Acceptance executed by it, as modified from time to time
pursuant to the terms of this Agreement, or to give effect to any applicable
Assignment and Acceptance, and "Revolving Credit Commitments" means the
aggregate principal amount of the Revolving Credit Commitments of all the
Lenders, the maximum amount of which shall be $285,000,000, as reduced from time
to time pursuant to Section 4.01.
"Revolving Credit Obligations" means, at any particular time,
the sum of (i) the outstanding principal amount of the Loans at such time, plus
(ii) the Letter of Credit Obligations at such time.
"Revolving Credit Termination Date" means the earlier to occur
of (i) July 31, 2002 (or, if not a Business Day, the next preceding Business
Day) and (ii) the date of termination of the Revolving Credit Commitments
pursuant to the terms of this Agreement.
"Securities" means any stock, shares, voting trust
certificates, limited partnership certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities",
including, without limitation, any "security" as such term is defined in Section
8-102 of the Uniform Commercial Code, or any certificates of interest, shares,
or participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include the Notes, any other evidence of the
Obligations, the Supplemental Term Note or the Supplemental Term Loan Warrant.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"Senior Subordinated Notes" means the 8-1/8% Senior
Subordinated Notes due 2008 in an aggregate principal amount of up to
$250,000,000 issued by the Parent under that certain Indenture dated as of
February 17, 1998, as the same may be amended or supplemented with respect to
the principal amount of Indebtedness issued thereunder, between the Parent and
SunTrust Bank, Central Florida, National Association, as trustee.
31
"Senior Subordinated Notes Guaranties" means, collectively,
the unsecured guaranties of payment of the Senior Subordinated Notes executed by
the Borrowers and Guarantors which are Subsidiaries of Parent.
"Solvent", when used with respect to any Person, means that at
the time of determination:
(i) the Fair Market Value of its assets is in excess of the
total amount of its liabilities (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"Standby Letter of Credit" means any letter of credit issued
by an Issuing Bank pursuant to Section 3.01 for the account of a Borrower, or
for the account of Leasing or any Subsidiary of a Borrower if the Borrowers are
jointly and severally liable for reimbursement of amounts drawn under such
letter of credit, which is not a Commercial Letter of Credit.
"Subsidiary" of a Person means any corporation, limited
liability company, general or limited partnership, trust, or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions with respect to such entity are at the time directly or indirectly
owned or controlled by such Person, one or more of the other subsidiaries of
such Person or any combination thereof, or in the case of an entity which is a
partnership, of which such Person is a general partner.
"Super-Majority Lenders" means Lenders whose Pro Rata Shares,
in the aggregate, are at least seventy-five percent (75%); provided, however,
that, in the event any of the Lenders shall have failed to fund its Pro Rata
Share of any Loan requested by the Borrowers which the Lenders are obligated to
fund under the terms of this Agreement and any such failure has not been cured,
then for so long as such failure continues, "Super-Majority Lenders" means
Lenders (excluding all Lenders whose failure to fund their respective Pro Rata
Shares of such Loans have not been so cured) whose Pro Rata Shares represent at
least seventy-five percent (75%) of the aggregate Pro Rata Shares of such
Lenders.
"Supplemental Term Loan" means that certain term loan made by
Citicorp USA, Inc., to the Borrowers pursuant to the Term Loan Note dated
February 18, 2000, as amended, a copy of which is attached as Exhibit H hereto
and herein referred to as the "Supplemental Term Loan Note".
32
"Supplemental Term Loan Warrant" means that certain Common
Stock Warrant Certificate issued by Parent to Citicorp USA, Inc. in connection
with the extension of credit evidenced by the Supplemental Term Loan Note.
"Tangible Net Worth" means the amount calculated as (i) the
consolidated net worth of the Parent and its Subsidiaries minus (ii) the
consolidated intangibles of the Parent and its Subsidiaries including, without
limitation, goodwill, trademarks, tradenames, copyrights, patents, patent
applications, licenses and rights in any thereof and other items treated as
intangibles in accordance with GAAP."
"Taxes" is defined in Section 14.01(a).
"Termination Event" means (i) a Reportable Event with respect
to any Benefit Plan; (ii) the withdrawal of any Borrower or any ERISA Affiliate
from a Benefit Plan during a plan year in which such Borrower or such ERISA
Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of ERISA
or the cessation of operations which results in the termination of employment of
20% of Benefit Plan participants who are employees of any Borrower or any ERISA
Affiliate; (iii) the imposition of an obligation on any Borrower or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written notice
of intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which could reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Benefit Plan; or (vi) the
partial or complete withdrawal of any Borrower or any ERISA Affiliate from a
Multiemployer Plan.
"Texas Tax Reserve" means, at any time, a reserve in an amount
equal to the taxes payable by the Borrowers and Guarantors under the statutes of
the State of Texas with respect to which a tax lien attaches to Property of the
Borrowers and Guarantors located in the State of Texas pursuant to ss.32.01 of
the Texas Tax Code, which amount shall be determined by Distribution as of the
date of each Borrowing Base Certificate and, if in excess of $200,000, disclosed
by Distribution thereon.
"TIMCO Engine" means TIMCO Engine Center, Inc., a Delaware
corporation and wholly-owned Subsidiary of MR&O.
"Transaction Costs" means the fees, costs and expenses payable
by the Borrowers and Guarantors, or any of them, in connection with the
execution and delivery of the Loan Documents.
"TROL Documents" means, collectively, the TROL Guaranties,
TROL Participation Agreement, TROL Lease, Agency Agreement between the Parent,
as construction agent and First Security Bank, National Association, as owner
trustee under the Aviation Sales Trust 1998-1, as lessor, and Credit Agreement
among First Security Bank, National Association, as owner trustee for the
Aviation Sales Trust 1998-1, as borrower, the lender parties thereto and
NationsBank, National Association as administrative agent for such lender
parties, in each instance dated as of December 16, 1998 and as amended through
the Effective Date.
33
"TROL Guaranties" means, collectively, (i) the unsecured
guaranties of payment of certain Indebtedness evidenced by Series A Notes issued
by First Security Bank, National Association, as trustee under Aviation Sales
Trust 1998-1, a trust formed under the laws of the State of Florida, executed
and delivered by Parent, Borrowers and all of the other Subsidiaries of the
Parent, with the exception of Aviation Sales Company FSC, Ltd., and (ii) the
unsecured guaranty of payment and performance of Parent's obligations under the
TROL Lease executed and delivered by the Borrowers and such other Subsidiaries
of the Parent, in each instance, in the form attached hereto as Exhibit I and
made a part hereof.
"TROL Lease" means that certain lease agreement, a copy of
which is attached hereto as Exhibit J and made a part hereof, entered into by
and between Parent, as lessee, and First Security Bank, National Association, as
trustee under Aviation Sales Trust 1998-1, a trust formed under the laws of the
State of Florida, as lessor.
"TROL Participation Agreement" means that certain
participation agreement, a copy of which is attached hereto as Exhibit K and
made a part hereof, executed and delivered by Parent.
"Uniform Commercial Code" means the Uniform Commercial Code as
enacted in the State of New York, as it may be amended from time to time.
"Unused Commitment Fee" is defined in Section 5.02(b)(i).
"Working Capital" means, as at any date of determination, the
excess, if any, of (i) the Parent and its Subsidiaries' consolidated current
assets, except cash and Cash Equivalents, over (ii) the Parent and its
Subsidiaries' consolidated current liabilities, except current maturities of
long-term debt, and current maturities of the Revolving Credit Obligations as of
such date.
1.02. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03. Accounting Terms. Subject to Section 15.04, for purposes
of this Agreement, all accounting terms not otherwise defined herein shall have
the meanings assigned to them in conformity with GAAP.
1.04. Financial Covenant Calculations. Notwithstanding any
requirements under GAAP, calculations made with respect to (a) the definitions
of "EBITDA", "Net Income", "Fixed Charge Coverage Ratio", and "Interest Coverage
Ratio" and (b) determination of compliance with the financial covenants set
forth in Article XI, unless otherwise agreed as described in Section 15.04,
34
each shall be made without regard to changes in requirements under GAAP which
become effective after the Effective Date.
1.05. Other Terms. All other terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings assigned to
such terms by the Uniform Commercial Code to the extent the same are defined
therein.
35
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. Revolving Credit Facility.
(a) Outstanding Balance on the Effective Date; Availability.
(i) The principal balance of the "Loans" made under the
Predecessor Agreement and outstanding on the Effective Date is
$245,000,000, all of which shall continue as Loans hereunder and shall
be subject to and governed by the terms and provisions of this
Agreement.
(ii) Subject to the terms and conditions set forth in this
Agreement, each Lender hereby severally and not jointly agrees to make
loans, in Dollars (each individually, a "Loan" and, collectively, the
"Loans") to the Borrowers from time to time during the period from the
Effective Date to the Business Day next preceding the Revolving Credit
Termination Date, in an amount not to exceed such Lender's Pro Rata
Share of the Revolving Credit Availability at such time. All Loans
comprising the same Borrowing under this Agreement shall be made by the
Lenders simultaneously and proportionately to their then respective Pro
Rata Shares, it being understood that no Lender shall be responsible
for any failure by any other Lender to perform its obligation to make a
Loan hereunder nor shall the Revolving Credit Commitment of any Lender
be increased or decreased as a result of any such failure. Subject to
the provisions of this Agreement, the Borrowers may repay any
outstanding Loan on any day which is a Business Day and any amounts so
repaid may be reborrowed, up to the amount available under this Section
2.01(a) at the time of such Borrowing, through the Business Day next
preceding the Revolving Credit Termination Date; provided, however, the
Borrowers shall, without notice or demand of any kind, immediately make
such repayments of the Loans to the extent necessary to reduce the
aggregate outstanding principal amount of the Loans to an amount less
than or equal to the difference between the then Maximum Revolving
Credit Amount and the Letter of Credit Obligations as of such time.
Each requested Borrowing of Loans funded on any Funding Date for Loans
shall be in a principal amount of at least $1,000,000 and in integral
multiples of $100,000 in excess of that amount.
(b) Notice of Borrowing. When the Borrowers desire to borrow
under this Section 2.01, Distribution, on behalf of the Borrowers, shall deliver
to the Agent a Notice of Borrowing, signed by Distribution, (i) no later than
11:00 a.m. (New York time) on the proposed Funding Date, in the case of a
Borrowing of Base Rate Loans, and (ii) no later than 11:00 a.m. (New York time)
at least three (3) Business Days in advance of the proposed Funding Date
therefor, in the case of a Borrowing of Eurodollar Rate Loans. Such Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount of the proposed Borrowing, (iii) the Revolving Credit
Availability as of the date of such Notice of Borrowing, and (iv) instructions
for the disbursement of the proceeds of the proposed Borrowing, and shall be
accompanied by the then most recently delivered Borrowing Base Certificate duly
completed and signed by Distribution's chief financial officer, chief executive
officer or controller in compliance with Section 8.03. In lieu of delivering
such a Notice of
36
Borrowing (except with respect to a Borrowing of Loans on the Effective Date),
Distribution may give the Agent telephonic notice of any proposed Borrowing by
the time required under this Section 2.01(b), if Distribution confirms such
notice by delivery of the required Notice of Borrowing to the Agent by facsimile
transmission promptly, but in no event later than 5:00 p.m. (New York time) on
the same day, the original of which facsimile copy shall be delivered to the
Agent within three (3) days after the date of such transmission. Any Notice of
Borrowing (or telephonic notice in lieu thereof) given pursuant to this Section
2.01(b) shall be irrevocable.
(c) Making of Loans.
(i) Promptly after receipt of a Notice of Borrowing under
Section 2.01(b) (or telephonic notice in lieu thereof), the Agent, at
its option and in its sole discretion, shall do either of the
following:
(A) The Agent shall notify each Lender by telecopy, or other
similar form of transmission, of the proposed Borrowing. Subject to the
fulfillment of the conditions precedent set forth in Section 6.01 or
Section 6.02, as applicable, each Lender shall deposit an amount equal
to its Pro Rata Share of the amount requested by Distribution to be
made as Loans with the Agent at its office in New York, New York, in
immediately available funds, (A) on the Effective Date with respect to
the Borrowing of Loans on such date specified in the initial Notice of
Borrowing and (B) not later than 1:00 p.m. (New York time) on any other
Funding Date for Loans and the Agent shall make the proceeds of such
amounts received by it available to the Borrowers at the Agent's office
in New York, New York on such Funding Date (or on the date received if
later than such Funding Date) and shall disburse such proceeds in
accordance with the disbursement instructions set forth in the
applicable Notice of Borrowing. The failure of any Lender to deposit
the amount described above with the Agent on the applicable Funding
Date shall not relieve any other Lender of its obligations hereunder to
make its Loan on such Funding Date. In the event the conditions
precedent set forth in Section 6.01 or 6.02, as applicable, are not
fulfilled as of the ------------ ---- proposed Funding Date for any
Borrowing, the Agent shall promptly return, by wire transfer of
immediately available funds, the amount deposited by each Lender to
such Lender.
or
(B) Subject to the fulfillment of the conditions precedent set
forth in Section 6.01 or Section 6.02, as applicable, the Agent shall,
provided that the requested Borrowing is of an amount which is less
than the amount of Citicorp's unused Commitment (after taking into
account all other then outstanding Agent Advances) as of the Funding
Date for such Borrowing, advance the amount of the proposed Borrowing
(an "Agent Advance") to the Borrowers out of the Agent's own funds. The
Lenders, upon notice (in the form provided for in clause (A) above)
from the Agent as to the amount required to do so, shall remit to the
Agent on a weekly or more frequent basis that amount which is necessary
to conform each Lender's Loans outstanding at such time to its Pro Rata
Share thereof. Each Lender shall make available the amount required
from it as aforesaid to the Agent in Dollars and in immediately
available funds not later than 1:00 p.m. (New York time) on the day
such notice is given by the Agent. In the event of the
37
making of any such Agent Advance, each Lender's share of the interest
allocable thereto shall be adjusted as necessary to account for the
period of time the same is outstanding from the Agent. Any payment by a
Lender to the Agent pursuant to this clause (B) shall constitute a Loan
to the Borrowers and an assignment by Citicorp of a portion of its
Loans to such Lender equal to the amount of the payment received by the
Agent from such Lender.
(ii) In connection with the funding of Loans pursuant to
Section 2.01(c)(i)(A), unless the Agent shall have been notified by any
Lender on the Business Day immediately preceding the applicable Funding
Date in respect of any Borrowing of Loans that such Lender does not
intend to fund its Loan requested to be made on such Funding Date, the
Agent may assume that such Lender has funded its Loan and is depositing
the proceeds thereof with the Agent on the Funding Date therefor, and
the Agent in its sole discretion may, but shall not be obligated to,
disburse a corresponding amount to the Borrowers on the applicable
Funding Date. If the Loan proceeds corresponding to that amount are
advanced to the Borrowers by the Agent but are not in fact deposited
with the Agent by such Lender on or prior to the applicable Funding
Date or a Lender's Pro Rata Share of an Agent Advance is not remitted
to the Agent as and when required pursuant to Section 2.01(c)(i)(B),
the Lender not making such deposit or remitting such amount agrees to
pay, and in addition the Borrowers agree to repay, to the Agent
forthwith on demand such corresponding amount, together with interest
thereon, for each day from the date such amount is disbursed to or for
the benefit of the Borrowers until the date such amount is paid or
repaid to the Agent, (A) in the case of the Borrowers, at the interest
rate applicable to such Borrowing and (B) in the case of such Lender,
at the Federal Funds Rate for the first three (3) Business Days, and
thereafter at the interest rate applicable to such Borrowing. If such
Lender shall pay to the Agent the corresponding amount, the amount so
paid shall constitute such Lender's Loan, and if both such Lender and
the Borrowers shall pay and repay such corresponding amount, the Agent
shall promptly pay to the Borrowers such corresponding amount. This
Section 2.01(c)(ii) does not relieve any Lender of its obligation to
make its Loan on any applicable Funding Date as and when required under
Section 2.01(c)(i)(A) or to remit its Pro Rata Share of any Agent
Advance as and when required under Section 2.01(c)(i)(B).
(d) Revolving Credit Termination Date. Unless earlier
terminated in accordance with the provisions of Section 4.01, the Revolving
Credit Commitments shall terminate on the Revolving Credit Termination Date.
Each Lender's obligation to make Loans shall terminate on the Business Day next
preceding the Revolving Credit Termination Date. All outstanding Revolving
Credit Obligations shall be paid in full (or, in the case of unmatured Letter of
Credit Obligations, provision for payment in cash shall be made to the
satisfaction of the Issuing Banks and the Requisite Lenders) (i) if the
Revolving Credit Commitments are terminated pursuant to Section 4.01, on the
Revolving Credit Termination Date, and (ii) otherwise, on the earlier to occur
of (A) July 31, 2002 or, if not a Business Day, the next preceding Business Day,
and (B) the date of acceleration of the Obligations pursuant to Section 12.02.
(e) Maximum Revolving Credit Facility. Notwithstanding
anything in this Agreement to the contrary, in no event shall the aggregate
principal Revolving Credit
38
Obligations exceed the lesser of (i) the Maximum Revolving Credit Amount and
(ii) $285,000,000, such amount in clause (ii) being reduced by the amount of
each permanent reduction of the Revolving Credit Commitments made pursuant to
Section 4.01(a) and Section 4.01(b).
2.02. Authorized Officers and Agents. On the Effective Date,
Distribution shall deliver, and from time to time thereafter Distribution may
deliver, to the Agent an Officer's Certificate setting forth the names of (a)
Distribution's officers, employees and agents authorized to request Loans and
Letters of Credit on behalf of the Borrowers and (b) the officers of each
respective Guarantor authorized to act for such Person in respect of all matters
relating to the Loan Documents, in each instance containing a specimen signature
of each such officer, employee or agent. The Chairman of the Board of Directors
of Distribution shall also be authorized to act for the Borrowers in respect of
all other matters relating to the Loan Documents. The Agent, Lenders and Issuing
Banks shall be entitled to rely conclusively on such officers', employees' or
agents' authority to request Loans and Letters of Credit and on such officers'
of Distribution and the Guarantors authority to execute and deliver all
instruments and agreements pertaining to the Loan Documents and taking other
actions attendant thereto until the Agent, Lenders and Issuing Banks receive
written notice to the contrary. None of the Agent, the Lenders, or the Issuing
Banks shall have any duty to verify the authenticity of the signature appearing
on any such Officer's Certificate, written Notice of Borrowing or any other
document, and, with respect to an oral request for such a Loan or Letter of
Credit, the Agent shall have no duty to verify the identity of any person
representing himself or herself as one of Distribution's officers, employees or
agents authorized to make such request or otherwise to act on behalf of the
Borrowers. None of the Agent, any Lender or any Issuing Bank shall incur any
liability to any Borrower or any other Person in acting upon any telephonic or
facsimile notice referred to above which the Agent, such Lender, or such Issuing
Bank believes to have been given by a duly authorized officer or other person
authorized to borrow on behalf of the Borrowers.
2.03. Use of Proceeds of Loans. The proceeds of the Loans
shall be used to pay the Transaction Costs, for working capital in the ordinary
course of business of the Borrowers and their Subsidiaries, and for other lawful
general corporate purposes of the Borrowers and their Subsidiaries not
prohibited by the terms of this Agreement. In no event shall proceeds of the
Loans be used, directly or indirectly, to provide a deposit in escrow or
otherwise or cash collateral for any obligation under the TROL Documents or any
letter of credit issued in support thereof which is not a Letter of Credit or to
make any payment of Indebtedness incurred under or in connection with the TROL
Documents other than obligations incurred under the TROL Lease in the ordinary
course of business of Parent.
2.04. Repayment of Excess Borrowing Amount. The Excess
Borrowing Amount shall be repayable in six (6) consecutive monthly installments
on the last day of each calendar month commencing on June 30, 2000 and ending on
November 30, 2000, the first five (5) of such installments being in the amount
of $5,900,833 and the last of such installments being in the amount of
$5,900,835, which payments shall be applied proportionately to each Lender's Pro
Rata Share of the Excess Borrowing Amount in accordance with its Pro Rata Share
of such installment.
39
ARTICLE III
LETTERS OF CREDIT
3.01. Letters of Credit. Subject to the terms and conditions
set forth in this Agreement, each Issuing Bank hereby severally agrees to issue
for the account of the Borrowers, or for the account of any Subsidiary of a
Borrower, if the Borrowers are jointly and severally liable for reimbursement of
amounts drawn under such Letter of Credit, one or more Letters of Credit,
subject to the following provisions:
(a) Types and Amounts. An Issuing Bank shall not have any
obligation to issue, amend or extend, and shall not issue, amend or extend, any
Letter of Credit at any time:
(i) if the aggregate Letter of Credit Obligations with respect
to such Issuing Bank, after giving effect to the issuance, amendment or
extension of the Letter of Credit requested hereunder, shall exceed any
limit imposed by law or regulation upon such Issuing Bank;
(ii) if the Issuing Bank receives written notice from the
Agent at or before 11:00 a.m. (New York time) on the date of the
proposed issuance, amendment or extension of such Letter of Credit that
(A) immediately after giving effect to the issuance, amendment or
extension of such Letter of Credit, (I) the Letter of Credit
Obligations at such time would exceed $30,000,000, or (II) the
Revolving Credit Obligations at such time would exceed the Maximum
Revolving Credit Amount at such time, or (B) one or more of the
conditions precedent contained in Sections 6.01 or 6.02, as applicable,
would not on such date be satisfied, unless such conditions are
thereafter satisfied and written notice of such satisfaction is given
to the Issuing Bank by the Agent (it being understood that an Issuing
Bank shall not otherwise be required to determine that, or take notice
whether, the conditions precedent set forth in Sections 6.01 or 6.02,
as applicable, have been satisfied);
(iii) if the expiration date therefor is later than the
earlier of (A) the date one (1) year after the date of issuance
(without regard to any automatic renewal provisions thereof) or (B) the
Business Day next preceding the scheduled Revolving Credit Termination
Date;
(iv) if the requested Letter of Credit is in a currency other
than Dollars and Borrowers have not obtained a Hedge Agreement with
respect thereto satisfactory to the Agent; or
(v) for the purpose of supporting, directly or indirectly,
Indebtedness under the TROL Documents or incurred in connection with
the development of and construction on the Property financed thereunder
other than the Letter of Credit outstanding with respect to such
Indebtedness as of the Effective Date;
(b) Conditions. In addition to being subject to the
satisfaction of the conditions precedent contained in Sections 6.01 and 6.02, as
applicable, the obligation of an Issuing Bank to issue, amend or extend any
Letter of Credit is subject to the satisfaction in full of the following
conditions:
40
(i) if the Issuing Bank so requests, the Borrowers or, in the
case of Letters of Credit issued for the account of any Subsidiary of a
Borrower, the Borrowers and such Subsidiary of a Borrower, as
applicable, shall have executed and delivered to such Issuing Bank and
the Agent a Letter of Credit Reimbursement Agreement and such other
documents and materials as may be required pursuant to the terms
thereof; and
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its sole discretion.
(c) Issuance of Letters of Credit.
(i) Distribution, on behalf of the Borrowers shall give an
Issuing Bank and the Agent written notice that it has selected such
Issuing Bank to issue a Letter of Credit not later than 11:00 a.m. (New
York time) on the third (3rd) Business Day preceding the requested date
for issuance thereof under this Agreement, or such shorter notice as
may be acceptable to such Issuing Bank and the Agent. Such notice shall
be irrevocable unless and until such request is denied by the
applicable Issuing Bank and shall specify (A) that the requested Letter
of Credit is either a Commercial Letter of Credit or a Standby Letter
of Credit, (B) that such Letter of Credit is solely for the account of
the Borrowers, jointly and severally, or that such Letter of Credit is
for the account of the Borrowers and a Subsidiary of a Borrower,
jointly and severally, providing the name of the Subsidiary of such
Borrower which is jointly and severally applying for such Letter of
Credit, (C) the stated amount of the Letter of Credit requested, (D)
the effective date (which shall be a Business Day) of issuance of such
Letter of Credit, (E) the date on which such Letter of Credit is to
expire (which shall be a Business Day and no later than the Business
Day immediately preceding the scheduled Revolving Credit Termination
Date), (F) the Person for whose benefit such Letter of Credit is to be
issued, (G) other relevant terms of such Letter of Credit, (H) the
Revolving Credit Availability at such time, and (I) the amount of the
then outstanding Letter of Credit Obligations. Such Issuing Bank shall
notify the Agent immediately upon receipt of a written notice from
Distribution requesting that a Letter of Credit be issued, or that an
existing Letter of Credit be extended or amended and, upon the Agent's
request therefor, send a copy of such notice to the Agent.
(ii) The Issuing Bank shall (A) give the Agent written notice,
or telephonic notice confirmed promptly thereafter in writing, of the
issuance, amendment or extension of a Letter of Credit and (B) promptly
after issuance thereof, provide the Agent with a copy of each Letter of
Credit issued and each amendment thereto.
(d) Reimbursement Obligations; Duties of Issuing Banks.
(i) Notwithstanding any provisions to the contrary in any
Letter of Credit Reimbursement Agreement:
(A) the Borrowers shall reimburse, or cause the applicable
Subsidiary of a Borrower, if applicable, for whose account a Letter of
Credit is issued to reimburse, the Issuing Bank for amounts drawn under
such Letter of Credit, in Dollars, no later than the
41
date (the "Reimbursement Date") which is the earlier of (I) the time
specified in the applicable Letter of Credit Reimbursement Agreement
and (II) one (1) Business Day after Distribution receives written
notice from the Issuing Bank that payment has been made under such
Letter of Credit by the Issuing Bank; and
(B) all Reimbursement Obligations with respect to any Letter
of Credit shall bear interest at the rate applicable in accordance with
Section 5.01(a) from the date of the relevant drawing under such Letter
of Credit until the Reimbursement Date and thereafter at the rate
applicable in accordance with Section 5.01(c).
(ii) The Issuing Bank shall give the Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of all
drawings under a Letter of Credit issued under this Agreement and the
payment (or the failure to pay when due) by the Borrowers or a
Subsidiary of a Borrower, as applicable, on account of a Reimbursement
Obligation.
(iii) No action taken or omitted in good faith by an Issuing
Bank under or in connection with any Letter of Credit issued under this
Agreement shall put such Issuing Bank under any resulting liability to
any Lender, any Borrower, any Subsidiary of a Borrower, or, so long as
it is not issued in violation of Section 3.01(a), relieve any Lender of
its obligations hereunder to such Issuing Bank. Solely as between the
Issuing Banks and the Lenders, in determining whether to pay under any
such Letter of Credit, the respective Issuing Bank shall have no
obligation to the Lenders other than to confirm that any documents
required to be delivered under a respective Letter of Credit appear to
have been delivered and that they appear on their face to comply with
the requirements of such Letter of Credit.
(e) Participations.
(i) Immediately upon issuance by an Issuing Bank of any Letter
of Credit in accordance with the procedures set forth in this Section
3.01, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from that Issuing Bank, without
recourse or warranty, an undivided interest and participation in such
Letter of Credit and the related Letter of Credit Reimbursement
Agreement to the extent of such Lender's Pro Rata Share, including,
without limitation, all rights of the Issuing Bank with respect to
obligations of the Borrowers with respect thereto (other than amounts
owing to the Issuing Bank under Section 3.01(g)) and any security
therefor and guaranty pertaining thereto.
(ii) If any Issuing Bank makes any payment under any Letter of
Credit issued under this Agreement and the Borrowers, the Subsidiary of
a Borrower for whose account such Letter of Credit was issued, as
applicable, does not repay such amount to the Issuing Bank on the
Reimbursement Date, the Issuing Bank shall promptly notify the Agent,
which shall promptly notify each Lender, and each Lender shall promptly
and unconditionally pay to the Agent for the account of such Issuing
Bank, in immediately available funds, the amount of such Lender's Pro
Rata Share of such payment (net of that portion of such payment, if
any, made by such Lender in its capacity as an Issuing Bank), and the
Agent shall promptly pay to the Issuing Bank such amounts received by
it, and
42
any other amounts received by the Agent for the Issuing Bank's account,
pursuant to this Section 3.01(e). If a Lender does not make its Pro
Rata Share of the amount of such payment available to the Agent, such
Lender agrees to pay to the Agent for the account of the Issuing Bank,
forthwith on demand, such amount together with interest thereon, for
the first three (3) Business Days after the date such payment was first
due at the Federal Funds Rate, and thereafter at the interest rate then
applicable in accordance with Section 5.01(a). The failure of any
Lender to make available to the Agent for the account of an Issuing
Bank its Pro Rata Share of any such payment shall neither relieve any
other Lender of its obligation hereunder to make available to the Agent
for the account of such Issuing Bank such other Lender's Pro Rata Share
of any payment on the date such payment is to be made nor increase the
obligation of any other Lender to make such payment to the Agent.
(iii) Whenever an Issuing Bank receives a payment on account
of a Reimbursement Obligation, including any interest thereon, as to
which the Agent has previously received payments from any Lender for
the account of such Issuing Bank pursuant to this Section 3.01(e), such
Issuing Bank shall promptly pay to the Agent and the Agent shall
promptly pay to such Lender an amount equal to such Lender's Pro Rata
Share thereof. Each such payment shall be made by such Issuing Bank or
the Agent, as the case may be, on the Business Day on which such Person
receives the funds paid to such Person pursuant to the preceding
sentence, if received prior to 11:00 a.m. (New York time) on such
Business Day, and otherwise on the next succeeding Business Day.
(iv) Upon the request of any Lender, an Issuing Bank shall
furnish such Lender copies of any Letter of Credit or Letter of Credit
Reimbursement Agreement to which such Issuing Bank is party and such
other documentation as reasonably may be requested by such Lender.
(v) The obligations of a Lender to make payments to the Agent
for the account of any Issuing Bank with respect to a Letter of Credit
issued under this Agreement shall be irrevocable, shall not be subject
to any qualification or exception whatsoever except willful misconduct
or gross negligence of such Issuing Bank, and shall be honored in
accordance with this Article III (irrespective of the satisfaction of
the conditions described in Sections 6.01 and 6.02, as applicable)
under all circumstances, including, without limitation, any of the
following circumstances:
(A) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or other right
which any Borrower may have at any time against a beneficiary named in
a Letter of Credit or any transferee of a beneficiary named in a Letter
of Credit (or any Person for whom any such transferee may be acting),
the Agent, the Issuing Bank, any Lender, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the account party and
beneficiary named in any Letter of Credit);
43
(C) any draft, certificate or any other document presented
under the Letter of Credit having been determined to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(E) any failure by that Issuing Bank to make any reports
required pursuant to Section 3.01(h) or the inaccuracy of any such
report; or
(F) the occurrence of any Event of Default or Potential Event
of Default.
(f) Payment of Reimbursement Obligations.
(i) The Borrowers, jointly and severally, unconditionally
agree to pay, or cause the Subsidiary of a Borrower for whose account a
Letter of Credit is issued, as applicable, to pay, to each Issuing
Bank, in Dollars, the amount of all Reimbursement Obligations, interest
and other amounts payable to such Issuing Bank under or in connection
with the Letters of Credit when such amounts are due and payable,
irrespective of any claim, setoff, defense or other right which any
Borrower or such Subsidiary of a Borrower may have at any time against
any Issuing Bank or any other Person.
(ii) In the event any payment by the Borrowers or such
Subsidiary received by an Issuing Bank with respect to a Letter of
Credit and distributed by the Agent to the Lenders on account of their
participations is thereafter set aside, avoided or recovered from such
Issuing Bank in connection with any receivership, liquidation or
bankruptcy proceeding, each Lender which received such distribution
shall, upon demand by such Issuing Bank, contribute such Lender's Pro
Rata Share of the amount set aside, avoided or recovered together with
interest at the rate required, if any, to be paid by such Issuing Bank
upon the amount required to be repaid by it.
(g) Issuing Bank Charges. The Borrowers shall pay, or cause a
Borrower's Subsidiary for whose account a Letter of Credit is issued,
as applicable, to pay, to each Issuing Bank, solely for its own
account, the standard charges assessed by such Issuing Bank in
connection with the issuance, administration, amendment and payment or
cancellation of Letters of Credit and such compensation in respect of
such Letters of Credit for the Borrower's or such Subsidiary's account,
as applicable, as may be agreed upon by Distribution and such Issuing
Bank from time to time.
(h) Issuing Bank Reporting Requirements. Each Issuing Bank
shall, no later than the tenth (10th) Business Day following the last
day of each calendar month, provide to the Agent, Distribution, and
each Lender separate schedules for Commercial Letters of Credit and
Standby Letters of Credit issued as Letters of Credit, in form and
substance reasonably satisfactory to the Agent, setting forth the
aggregate Letter of Credit Obligations outstanding to it at the end of
each month and, to the extent not otherwise provided in accordance with
the provisions of Section 3.01(c)(ii), any information requested by the
Agent or the Borrower
44
relating to the date of issue, account party, amount, expiration date
and reference number of each Letter of Credit issued by it.
(i) Indemnification; Exoneration.
(i) In addition to all other amounts payable to an Issuing
Bank, the Borrowers, jointly and severally, hereby agree to defend,
indemnify, and save the Agent, each Issuing Bank and each Lender
harmless from and against any and all claims, demands, liabilities,
penalties, damages, losses (other than loss of profits), costs, charges
and expenses (including reasonable attorneys' fees but excluding taxes)
which the Agent, such Issuing Bank or such Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit other than as a result of the gross negligence or
willful misconduct of the Issuing Bank, as determined by a court of
competent jurisdiction, or (B) the failure of the Issuing Bank issuing
a Letter of Credit to honor a drawing under such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental
Authority.
(ii) As between the Borrowers and any Subsidiary of any
Borrowers' for whose account a Letter of Credit is issued, as
applicable, on the one hand and the Agent, the Lenders and the Issuing
Banks on the other hand, the Borrowers, jointly and severally, assume
all risks of the acts and omissions of, or misuse of Letters of Credit
by, the respective beneficiaries of the Letters of Credit. In
furtherance and not in limitation of the foregoing, subject to the
provisions of the Letter of Credit Reimbursement Agreements, the
Issuing Banks and the Lenders shall not be responsible for: (A) the
form, validity, legality, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the
application for and issuance of the Letters of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity,
legality or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (C) failure of the
beneficiary of a Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (E) errors in interpretation of technical terms; (F)
any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (G) the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter of
Credit; and (H) any consequences arising from causes beyond the control
of the Agent, the Issuing Banks or the Lenders.
3.02. Obligations Several. The obligations of each Issuing Bank and
each Lender under this Article III are several and not joint, and no Issuing
Bank or Lender shall be responsible for the obligation to issue Letters of
Credit or participation obligation hereunder, respectively, of any other Issuing
Bank or Lender.
45
3.03. Transitional Provisions. Schedule 3.03 contains a schedule of
certain "Letters of Credit" outstanding under the Predecessor Agreement which
remain outstanding on the Effective Date. Such letters of credit shall
automatically and without further action of the parties hereto be continued as
Letters of Credit and be deemed issued pursuant to this Article III and subject
to the provisions of this Agreement; no additional Fronting Fee shall be
required under the provisions of Section 5.02(a) with respect thereto; the
undrawn face amount of such Letters of Credit shall be included in the
calculation of Letter of Credit Obligations; and all liabilities with respect
thereto shall constitute Obligations.
46
ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.01. Prepayments; Reductions in Revolving Credit Commitments.
(a) Voluntary Prepayments/Reductions.
(i) Notice. The Borrowers may repay Loans, without prior
written notice to the Agent or any Lender, at any time and from time to
time.
(ii) Voluntary Revolving Credit Commitment Reductions. The
Borrowers, upon at least three (3) Business Days' prior written notice
to the Agent (which the Agent shall promptly transmit to each Lender),
shall have the right, at any time and from time to time, to terminate
in whole or permanently reduce in part the Revolving Credit
Commitments; provided that the Borrowers shall have made whatever
payment may be required to reduce the Revolving Credit Obligations to
an amount less than or equal to the Revolving Credit Commitments as
reduced or terminated. Any partial reduction of the Revolving Credit
Commitments shall be in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount, and shall
reduce the Revolving Credit Commitment of each Lender proportionately
in accordance with its Pro Rata Share. Any notice of termination or
reduction given to the Agent under this Section 4.01(a)(ii) shall
specify the date (which shall be a Business Day) of such termination or
reduction and, with respect to a partial reduction, the aggregate
principal amount thereof. When notice of termination or reduction is
delivered as provided herein, the principal amount of the Loans
specified in the notice shall become due and payable on the date
specified in such notice.
(b) Mandatory Prepayments/Reductions.
(i) Net Cash Proceeds of Sale. Immediately upon the receipt by
any Borrower or Guarantor of any Net Cash Proceeds of Sale, the
Borrowers shall make or cause to be made a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of such
Net Cash Proceeds of Sale, subject to the reduction set forth in the
definition of "Designated Prepayment".
(ii) Net Cash Proceeds of Issuance of Equity Securities or
Indebtedness. Immediately upon the receipt by any Borrower or Guarantor
of any Net Cash Proceeds of Issuance of Equity Securities or Net Cash
Proceeds of Issuance of Indebtedness, the Borrowers shall make or cause
to be made a mandatory prepayment in an amount equal to one hundred
percent (100%) of such Net Cash Proceeds of Issuance of Equity
Securities or Indebtedness.
(iii) Insufficient Collateral. The Borrowers shall,
immediately and without notice or demand of any kind, make repayments
of the Loans to the extent necessary to reduce the outstanding
principal amount of the Revolving Credit Obligations to an amount not
to exceed the Borrowing Base.
47
(iv) No Waiver or Consent. Nothing in this Section 4.01(b)
shall be construed to constitute the Lenders' consent to any
transaction referenced in clauses (i) and (ii) above which is not
expressly permitted by Article X.
(v) Notice. Distribution shall give the Agent prior written
notice or telephonic notice promptly confirmed in writing (each of
which the Agent shall promptly transmit to each Lender), when a
Designated Prepayment will be made (which date of prepayment shall be
no later than the date on which such Designated Prepayment becomes due
and payable pursuant to this Section 4.01(b)).
(vi) Application of Prepayments.
(A) Designated Prepayments shall be allocated and applied
first to the outstanding Loans as more particularly described in
clauses (C), (D) and (E) below and, following the payment in full of
the Loans, the remaining balance of each Designated Prepayment shall be
applied to the Letter of Credit Obligations (or, to the extent such
Letter of Credit Obligations are contingent, deposited in the Cash
Collateral Account to provide Cash Collateral in respect of such Letter
of Credit Obligations).
(B) Prepayments required by Section 4.01(b)(iii) shall be
allocated and applied to the Loans ratably based on the then
outstanding principal balance thereof until paid in full.
(C) Designated Prepayments made with respect to Net Cash
Proceeds of Sale shall be allocated (1) first to reduce outstanding
Loans by the amount thereof attributable to the Property giving rise to
such Net Cash Proceeds of Sale or a portion thereof, (2) second to the
Overadvance Amount (in the inverse order of maturity with respect to
the Excess Borrowing Amount and in the inverse order of reduction with
respect to the Interim Liquidity Amount) until reduced to zero, (3)
third to reduce outstanding Revolving Credit Obligations by an amount
equal to the amount by which Revolving Credit Commitments are required
to be reduced pursuant to Section 4.01(b)(vii)(B), and (4) last to
reduce the remaining outstanding balance of the Revolving Credit
Obligations.
(D) Designated Prepayments made with respect to Net Cash
Proceeds of Issuance of Equity Securities shall be allocated first to
the Overadvance Amount (in the inverse order of maturity with respect
to the Excess Borrowing Amount and in the inverse order of reduction
with respect to the Interim Liquidity Amount) until paid in full and
then to reduce the remaining outstanding balance of the Revolving
Credit Obligations.
(E) Designated Prepayments made with respect to Net Cash
Proceeds of Issuance of Indebtedness shall be allocated first to the
Overadvance Amount (in the inverse order of maturity with respect to
the Excess Borrowing Amount and in the inverse order of reduction with
respect to the Interim Liquidity Amount) until paid in full and then to
reduce the remaining outstanding balance of the Revolving Credit
Obligations.
(vii) Reduction of Revolving Credit Commitments.
48
(A) Until such time as the Overadvance Amount is reduced to
zero, the Revolving Credit Commitments will be permanently reduced by
an amount equal to the amount of Net Cash Proceeds of Sale, Net Cash
Proceeds of Issuance of Equity and Net Cash Proceeds of Issuance of
Indebtedness, as applicable, received by any Borrower or Guarantor, and
the Revolving Credit Commitment of each Lender shall thereupon be
reduced proportionately in accordance with its Pro Rata Share thereof.
(B) From and after the time of reduction of the Overadvance
Amount to zero, the Revolving Credit Commitments will be permanently
reduced by an amount equal to (1) one hundred percent (100%) of the
amount of Net Cash Proceeds of Sale, Net Cash Proceeds of Issuance of
Equity (subject to the provisions of clause (C) below) and Net Cash
Proceeds of Issuance of Indebtedness, as applicable, received by any
Borrower or Guarantor, until such time as the Revolving Credit
Commitments do not exceed $250,000,000, and (2) fifty percent (50%) of
the amount of Net Cash Proceeds of Sale, Net Cash Proceeds of Issuance
of Equity (subject to the provisions of clause (C) below) and Net Cash
Proceeds of Issuance of Indebtedness, as applicable, received by any
Borrower or Guarantor thereafter, and, in each instance, the Revolving
Credit Commitment of each Lender shall thereupon be reduced
proportionately in accordance with its Pro Rata Share thereof.
(C) Notwithstanding the foregoing, from and after the time the
Revolving Credit Commitments are reduced to $150,000,000, the Revolving
Credit Commitments shall not be reduced upon Parent's receipt of Net
Cash Proceeds of Issuance of Equity.
(D) Notwithstanding the foregoing, from and after (1) January
1, 2001, the Revolving Credit Commitments shall not exceed $250,000,000
and (2) July 1, 2001, the Revolving Credit Commitments shall not exceed
$200,000,000 and, in each instance, the Borrowers shall immediately and
without notice or demand of any kind make repayments of the Loans to
the extent necessary to reduce the outstanding principal amount of the
Revolving Credit Obligations to an amount not to exceed the amount of
the Revolving Credit Commitments as of such date.
4.02. Payments.
(a) Manner and Time of Payment. All payments of principal of
and interest on the Loans and Reimbursement Obligations and other Obligations
(including, without limitation, fees and expenses) which are payable to the
Agent, the Lenders or any Issuing Bank shall be made without condition or
reservation of right, and, with respect to payments made other than from
application of deposits in the Concentration Account, in immediately available
funds, delivered to the Agent (or, in the case of Reimbursement Obligations, to
the pertinent Issuing Bank) not later than 1:00 p.m. (New York time) on the date
and at the place due, to such account of the Agent (or such Issuing Bank) as it
may designate, for the account of the Agent, the Lenders or such Issuing Bank,
as the case may be; and funds received by the Agent, including, without
limitation, funds in respect of any Loans to be made on that date, not later
than 1:00 p.m. (New York time) on any given Business Day shall be credited
against payment to be made that day and funds received by the Agent after that
time shall be deemed to have been paid on the next succeeding Business Day.
Payments actually received by the Agent for the account of the
49
Lenders or the Issuing Banks, or any of them, shall be paid to them by the Agent
promptly after receipt thereof.
(b) Apportionment of Payments.
(i) Subject to the provisions of Section 4.01 and Section
4.02(b)(v), all payments of principal and interest in respect of
outstanding Loans, all payments in respect of Reimbursement
Obligations, all payments of fees and all other payments in respect of
any other Obligations, shall be allocated among such of the Lenders and
Issuing Banks as are entitled thereto, in proportion to their
respective Pro Rata Shares, or otherwise as provided herein. Except as
provided in Section 4.02(b)(ii) with respect to payments and proceeds
of Collateral received after the occurrence of an Event of Default, all
such payments and any other amounts received by the Agent from or for
the benefit of the Borrowers shall be applied:
(A) first, to pay principal of and interest on any portion of
the Loans which the Agent may have advanced on behalf of any Lender
other than Citicorp for which the Agent has not then been reimbursed by
such Lender or the Borrowers,
(B) second, to pay principal of and interest on any Protective
Advance for which the Agent or Lenders have not then been reimbursed by
the Borrowers,
(C) third, to pay the principal of the Loans then due and
payable and interest on such Loans then due and payable, ratably, based
on the then outstanding balances of such Loans and the Lenders'
respective Pro Rata Shares,
(D) fourth, to pay all other Obligations then due and payable,
ratably, and
(E) fifth, as Distribution, on behalf of the Borrowers, so
designates.
(ii) After the occurrence of an Event of Default and while the
same is continuing, the Agent shall apply all payments in respect of
any Obligations and all proceeds of Collateral in the following order:
(A) first, to pay principal of and interest on any portion of
the Loans which the Agent may have advanced on behalf of any Lender
other than Citicorp for which the Agent has not then been reimbursed by
such Lender or the Borrowers;
(B) second, to pay principal of and interest on any Protective
Advance for which the Agent or Lenders have not then been reimbursed by
the Borrowers;
(C) third, to pay Obligations in respect of any fees then due
to the Agent, Lenders and Issuing Banks and any expense reimbursements
or indemnities then due to the Agent;
(D) fourth, to pay principal of and interest on Letter of
Credit Obligations (or, to the extent such Obligations are contingent,
deposited in the Cash Collateral Account to provide Cash Collateral in
respect of such Obligations);
50
(E) fifth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(F) sixth, to pay interest due in respect of the Loans,
ratably, in accordance with the Lenders' respective Pro Rata Shares;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on all Loans;
(H) eighth, to the ratable payment of Hedge Agreements to
which any of the Lenders or any Affiliate of any of the Lenders is a
party; and
(I) ninth, to the ratable payment of all other Obligations.
The order of priority set forth in this Section 4.02(b) and the related
provisions of this Agreement are set forth solely to determine the rights and
priorities of the Agent, the Lenders, the Issuing Banks and other Holders as
among themselves.
(iii) The Agent, in its sole discretion subject only to the
terms of this Section 4.02(b)(iii), may pay from the proceeds of Loans
made to the Borrowers hereunder, whether made following a request by
Distribution pursuant to Section 2.02 or this Section 4.02(b)(iii), all
amounts payable by the Borrowers hereunder when due, including, without
limitation, amounts payable with respect to payments of principal,
interest, Reimbursement Obligations and fees and all reimbursements for
expenses pursuant to Section 15.02. The Borrowers hereby irrevocably
authorize the Lenders to make Loans, in each case, upon notice from the
Agent as described in the following sentence for the purpose of paying
principal, interest, Reimbursement Obligations and fees due from the
Borrowers, reimbursing expenses pursuant to Section 15.02 and paying
any and all other amounts due and payable by the Borrowers hereunder or
under the Notes, and agrees that all such Loans so made shall be deemed
to have been requested by Distribution on behalf of the Borrowers
pursuant to Section 2.02 as of the date of the aforementioned notice.
The Agent shall request Loans on behalf of the Borrowers as described
in the preceding sentence by notifying the Lenders by telecopy,
telegram or other similar form of transmission (which notice the Agent
shall thereafter promptly transmit to Distribution), of the amount and
Funding Date of the proposed Borrowing and that such Borrowing is being
requested on the Borrowers' behalf pursuant to this Section
4.02(b)(iii). On the proposed Funding Date for such Loan, the Lenders
shall make the requested Loans in accordance with the procedures and
subject to the conditions specified in Section 2.02.
(iv) Subject to Section 4.02(b)(v), the Agent shall promptly
distribute to each Lender and Issuing Bank at its primary address set
forth on the appropriate signature page hereof or the signature page to
the Assignment and Acceptance by which it became a Lender or Issuing
Bank, or at such other address as a Lender, an Issuing Bank or other
Holder may request in writing, such funds as such Person may be
entitled to receive hereunder; provided that the Agent shall under no
circumstances be bound to inquire into or determine the validity, scope
or priority of any interest or entitlement of any Holder
51
and may suspend all payments or seek appropriate relief (including,
without limitation, instructions from the Requisite Lenders or an
action in the nature of interpleader) in the event of any doubt or
dispute as to any apportionment or distribution contemplated hereby.
(v) In the event that any Lender fails to fund its Pro Rata
Share of any Loan requested by Distribution on behalf of the Borrowers
which such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Loan being hereinafter referred
to as a "Non Pro Rata Loan"), until the earlier of such Lender's cure
of such failure and the termination of the Revolving Credit
Commitments, the proceeds of all amounts thereafter repaid to the Agent
by the Borrowers and otherwise required to be applied to such Lender's
share of all other Obligations pursuant to the terms of this Agreement
shall be advanced to the Borrowers by the Agent on behalf of such
Lender to cure, in full or in part, such failure by such Lender, but
shall nevertheless be deemed to have been paid to such Lender in
satisfaction of such other Obligations. Notwithstanding anything in
this Agreement to the contrary:
(A) the foregoing provisions of this Section 4.02(b)(v) shall
apply only with respect to the proceeds of payments of Obligations;
(B) a Lender shall be deemed to have cured its failure to fund
its Pro Rata Share of any Loan at such time as an amount equal to such
Lender's original Pro Rata Share of the requested principal portion of
such Loan is fully funded to the Borrowers, whether made by such Lender
itself or by operation of the terms of this Section 4.02(b)(v), and
whether or not the Non Pro Rata Loan with respect thereto has been
repaid;
(C) amounts advanced to the Borrowers to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any Loan
("Cure Loans") shall bear interest at the rate in effect from time to
time pursuant to the terms of Section 5.01; and
(D) regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the instructions of
Distribution as to its desired application, all repayments of principal
which, in accordance with the other terms of this Section 4.02, would
be applied to the outstanding Loans shall be applied first, ratably to
all such Loans constituting Non Pro Rata Loans, second, ratably to such
Loans other than those constituting Non Pro Rata Loans or Cure Loans
and, third, ratably to such Loans constituting Cure Loans.
(c) Payments on Non-Business Days. Whenever any payment to be
made by the Borrowers hereunder or under the Notes is stated to be due
on a day which is not a Business Day, the payment shall instead be due
on the next succeeding Business Day, and any such extension of time
shall be included in the computation of the payment of interest and
fees hereunder.
4.03. Promise to Repay; Evidence of Indebtedness.
52
(a) Promise to Repay. The Borrowers, jointly and severally,
hereby agree to pay when due the principal amount of each Loan which is made to
them, and further agree to pay all unpaid interest accrued thereon, in
accordance with the terms of this Agreement and the Notes. If requested in
writing by any Lender, the Borrowers shall execute and deliver to such Lender
promptly following such request, a promissory note evidencing the Loans made by
such Lender, in form and substance acceptable to the Agent and in substantially
the form attached hereto as Exhibit E. On the Effective Date, the "Revolving
Notes" executed and delivered under the terms of the Predecessor Agreement shall
be delivered to the Agent for return to Distribution, subject to issuance of
substitute Notes in accordance with the foregoing.
(b) Loan Account. Each Lender shall maintain in accordance
with its usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of the Borrowers to such Lender resulting from each Loan owing to
such Lender from time to time, including the amount of principal and interest
payable and paid to such Lender from time to time hereunder and under the Notes.
(c) Control Account. The Register maintained by the Agent
pursuant to Section 15.01(c) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Borrowing made hereunder, the type of Loan
comprising such Borrowing, (ii) the effective date and amount of each Assignment
and Acceptance delivered to and accepted by it and the parties thereto, (iii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder or under the Notes, and (iv)
the amount of any sum received by the Agent from the Borrowers hereunder and
each Lender's share thereof. All entries in the Register shall be made in
accordance with the Agent's customary accounting practices as in effect from
time to time.
(d) Entries Binding. The entries made in the Register and each
Loan Account shall be conclusive and binding for all purposes, absent manifest
error; in the event there are discrepancies between the Register and any
individual Loan Account, entries in the Register shall govern.
4.04. Proceeds of Collateral; Concentration Account
Arrangements.
(a) Establishment. The Borrowers and Parent shall establish
and maintain depository accounts and Parent shall cause the other Guarantors to
establish and maintain depository accounts subject to Collection Account
Agreements into which all collections of Receivables shall be deposited and
promptly transferred directly (or, so long as such account remains active,
through Bank of America account no. 003661094818 without delay) to the
Concentration Account. The Borrowers and Parent shall cause all proceeds of
Collateral to be deposited in the Concentration Account or pursuant to other
similar arrangements for the collection of such amounts established by the
Borrowers, Guarantors, and the Agent. All collections of Receivables and
proceeds of Collateral which are received directly by any Borrower or any
Guarantor shall be deemed to have been received by such Borrower or such
Guarantor as the Agent's trustee and, upon such Borrower's or such Guarantor's
receipt thereof, such Borrower or Guarantor shall immediately transfer or cause
to be transferred, all such amounts into the Concentration Account in their
original form. All collections of Receivables
53
and proceeds of other Collateral deposited in the Concentration Account as
described above shall be deemed to have been received by the Agent and will be
held by the Agent, for the benefit of the Holders, as Cash Collateral for the
Obligations, subject to the rights of the Borrower set forth in Section 4.04(b)
and the rights of the Agent set forth in Section 12.03.
(b) Pre-Default Withdrawals from Concentration Account. The
Agent shall, so long as no Event of Default shall have occurred and be
continuing or unwaived, from time to time, (i) apply funds in the Concentration
Account (A) promptly after deposit therein to payment of the outstanding Loans,
(B) to payment of other Obligations as they become due and payable, (ii) invest
funds on deposit in the Concentration Account and accrued interest thereon,
after giving effect to the aforesaid payments, reinvest proceeds of any such
investments which may mature or be sold, and invest interest or other income
received from such investments, in such Cash Equivalents as Distribution may
select, and (iii) upon Distribution's request therefor on behalf of the
Borrowers, transfer funds on deposit in the Concentration Account after giving
effect to the payments described in clause (i) above to a Borrower's or
Guarantor's designated accounts. Such funds, interest, proceeds, or income which
are not so disbursed, invested or reinvested shall be deposited and held in the
Concentration Account for the benefit of the Holders as provided in Section
4.04(a). None of the Agent, any Lender or any Issuing Bank shall be liable to
any Borrower or Guarantor for, or with respect to, any decline in value of
amounts on deposit in the Concentration Account which shall have been invested
pursuant to this Section 4.04(b). Cash Equivalents from time to time purchased
and held pursuant to this Section 4.04(b) shall constitute Cash Collateral and
shall, for purposes of this Agreement, be deemed to be part of the funds held in
the Concentration Account in amounts equal to their respective outstanding
principal amounts.
(c) Reasonable Care. The Agent shall exercise reasonable care
in the custody and preservation of any funds held in the Concentration Account
and shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Agent accords its own like
property, it being understood that the Agent shall not have any responsibility
for taking any steps necessary to preserve rights against any parties with
respect to any such funds but may do so at its option. In the event the Agent
takes any such steps, it shall provide Distribution with prompt written notice
thereof. All reasonable expenses incurred in connection therewith shall be for
the sole account of the Borrowers and shall constitute Obligations hereunder.
4.05. Cash Collateral Account.
(a) Investments. If requested by Distribution, the Agent
shall, so long as no Event of Default shall have occurred and be continuing,
from time to time invest funds on deposit in the Cash Collateral Account and
accrued interest thereon, reinvest proceeds of any such investments which may
mature or be sold, and invest interest or other income received from any such
Investments, in each case in such Cash Equivalents as Distribution may select.
Such funds, interest, proceeds or income which are not so invested or reinvested
in Cash Equivalents shall, except as otherwise provided in Section 4.05(b) and
Section 12.03, be deposited and held by the Agent in the Cash Collateral
Account. None of the Agent, any Lender or any Issuing Bank shall be liable to
any Borrower for, or with respect to, any decline in value of amounts on deposit
in the Cash Collateral Account which shall have been invested pursuant to this
Section
54
4.05(a) at the direction of Distribution. Cash Equivalents from time to time
purchased and held pursuant to this Section 4.05(a) shall constitute Cash
Collateral and shall, for purposes of this Agreement, be deemed to be part of
the funds held in the Cash Collateral Account in amounts equal to their
respective outstanding principal amounts.
(b) Withdrawal Rights. No Borrower and no Person or entity
claiming on behalf of or through a Borrower shall have any right to withdraw any
of the funds held in the Cash Collateral Account, except that, upon the later to
occur of (i) the expiration or termination of all of the Letters of Credit in
accordance with their respective terms and (ii) the payment in full in cash of
the Obligations, any funds remaining in the Cash Collateral Account shall be
returned by the Agent to the Borrowers or paid to whomever may be legally
entitled thereto.
(c) Additional Deposits. If at any time the Agent determines
that any funds held in the Cash Collateral Account are subject to any interest,
right, claim or Lien of any Person other than the Agent, the Borrowers will,
forthwith upon demand by the Agent, pay to the Agent, as additional funds to be
deposited and held in the Cash Collateral Account, an amount equal to the amount
of funds subject to such interest, right, claim or Lien.
(d) Reasonable Care. The Agent shall exercise reasonable care
in the custody and preservation of any funds held in the Cash Collateral Account
and shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Agent accords its own like
property, it being understood that the Agent shall not have any responsibility
for taking any necessary steps to preserve rights against any parties with
respect to any such funds but may do so at its option. In the event the Agent
takes any such steps, it shall provide Distribution with prompt written notice
thereof. All reasonable expenses incurred in connection therewith shall be for
the sole account of the Borrowers and shall constitute Obligations hereunder.
55
ARTICLE V
INTEREST AND FEES
5.01. Interest on the Loans and Other Obligations.
(a) Rate of Interest. All Loans and the outstanding principal
balance of all other Obligations shall bear interest on the unpaid principal
amount thereof from the date such Loans are made and such other Obligations are
incurred until paid in full, except as otherwise provided in Section 5.01(c) or
Section 14.06, as follows:
(i) If a Base Rate Loan, at a rate per annum equal to the sum
of (A) the Base Rate, as in effect from time to time as interest
accrues plus (B) the applicable Base Rate Margin; and
(ii) If a Eurodollar Rate Loan, at a rate per annum equal to
the sum of (A) the Eurodollar Rate determined for the applicable
Eurodollar Interest Period plus (B) the applicable Eurodollar Rate
Margin.
The applicable basis for determining the rate of interest on the Loans
shall be selected by Distribution at the time a Notice of Borrowing or a Notice
of Conversion/Continuation is delivered by Distribution to the Agent; provided,
however, that Distribution may not select the Eurodollar Rate as the applicable
basis for determining the rate of interest on such Loan if at the time of such
selection an Event of Default or a Potential Event of Default would occur or has
occurred and is continuing. If on any day any Loan is outstanding with respect
to which notice has not been timely delivered to the Agent in accordance with
the terms of this Agreement specifying the basis for determining the rate of
interest on that day, then for that day interest on that Loan shall be
determined by reference to the Base Rate.
(b) Interest Payments.
(i) Interest accrued on each Base Rate Loan shall be payable
in arrears (A) on the first day of each calendar month (for the
immediately preceding calendar month), commencing on the first such day
following the making of such Loan, (B) upon conversion thereof to a
Eurodollar Rate Loan, and (C) if not theretofore paid in full, at
maturity (whether by acceleration or otherwise) of such Loan.
(ii) Interest accrued on each Eurodollar Rate Loan shall be
payable in arrears (A) on each Eurodollar Interest Payment Date
applicable to such Loan and (B) if not theretofore paid in full, at
maturity (whether by acceleration or otherwise) of such Loan.
(iii) Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on the first day of each
calendar month, commencing on the first such day following the
incurrence of such Obligation, (B) upon repayment thereof in full or in
part, and (C) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or
otherwise).
56
(c) Default Interest. Notwithstanding the rates of interest
specified in Section 5.01(a), effective immediately upon the occurrence of an
Event of Default, and for as long thereafter as such Event of Default shall be
continuing unwaived, the principal balance of all Loans and of all other
Obligations, shall bear interest at a rate which is two percent (2.0%) per annum
in excess of the rate of interest specified in Section 5.01(a)(i).
(d) Computation of Interest. Interest on all Obligations shall
be computed on the basis of the actual number of days elapsed in the period
during which interest accrues and a year of 360 days. In computing interest on
any Loan, the date of the making of the Loan shall be included and the date of
payment shall be excluded; provided, however, if a Loan is repaid on the same
day on which it is made, one (1) day's interest shall be paid on such Loan.
(e) Conversion or Continuation.
(i) The Borrowers shall have the option (A) to convert at any
time all or any part of outstanding Base Rate Loans to Eurodollar Rate Loans;
(B) to convert all or any part of outstanding Eurodollar Rate Loans having
Eurodollar Interest Periods which expire on the same date to Base Rate Loans on
such expiration date; or (C) to continue all or any part of an outstanding
Eurodollar Rate Loan at the expiry of the applicable Eurodollar Interest Period,
and the succeeding Eurodollar Interest Period of such continued Loans shall
commence on such expiration date; provided, however, no such outstanding Loan
may be continued as, or be converted into, a Eurodollar Rate Loan (1) if the
continuation of, or the conversion into, would violate any of the provisions of
Section 5.03 or (2) if an Event of Default or a Potential Event of Default would
occur or has occurred and is continuing unwaived. Any conversion into or
continuation of Eurodollar Rate Loans under this Section 5.01(e) shall be in a
minimum amount of $1,000,000 and in integral multiples of $100,000 in excess of
that amount except in the case of a conversion into or a continuation of an
entire Borrowing or Non-Pro Rata Loans.
(ii) To convert or continue a Loan under Section 5.01(e)(i),
Distribution shall deliver a Notice of Conversion/Continuation to the Agent no
later than 11:00 a.m. (New York time) at least three (3) Business Days in
advance of the proposed conversion/continuation date. A Notice of
Conversion/Continuation shall specify (A) the proposed conversion/continuation
date (which shall be a Business Day), (B) the principal amount of the Loan to be
converted/continued, (C) whether such Loan shall be converted and/or continued,
and (D) in the case of a conversion to, or continuation of, a Eurodollar Rate
Loan, the requested Eurodollar Interest Period. In lieu of delivering a Notice
of Conversion/Continuation, Distribution may give the Agent telephonic notice of
any proposed conversion/continuation by the time required under this Section
5.01(e)(ii), and such notice shall be confirmed in writing delivered to the
Agent by facsimile transmission promptly (but in no event later than 5:00 p.m.
(New York time) on the same day), the original of which facsimile copy shall be
delivered to the Agent within three (3) days after the date of such
transmission. Promptly after receipt of a Notice of Conversion/Continuation
under this Section 5.01(e)(ii) (or telephonic notice in lieu thereof), the Agent
shall notify each Lender by telecopy, or other similar form of transmission, of
the proposed conversion/continuation. Any Notice of
57
Conversion/Continuation for conversion to, or continuation of, a Loan
(or telephonic notice in lieu thereof) shall be irrevocable, and the
Borrowers shall be bound to convert or continue in accordance
therewith.
5.02. Fees.
(a) Letter of Credit Fee. In addition to any charges paid
pursuant to Section 3.01(g), the Borrowers shall pay (i) to the Issuing
Bank, a fee (the "Fronting Fee") accruing at a rate equal to
one-quarter of one percent (0.25%) per annum on the undrawn face amount
of each outstanding Letter of Credit issued by such Issuing Bank,
payable quarterly, in arrears, on the first day of each calendar
quarter (for the immediately preceding calendar quarter) and (ii) to
the Agent, for the account of the Lenders based on their respective Pro
Rata Shares, a fee (the "Letter of Credit Fee") accruing at a rate
equal to the Eurodollar Rate Margin applicable from time to time on the
undrawn face amount of each outstanding Letter of Credit, payable
quarterly, in arrears, on the first day of each calendar quarter (for
the immediately preceding calendar quarter); provided, however, upon
the occurrence of an Event of Default, and for so long thereafter as
such Event of Default shall be continuing, the rate at which the (A)
Fronting Fee shall accrue and be payable shall be equal to two and
one-quarter percent (2.25%) per annum and (B) Letter of Credit Fee
shall accrue and be payable at a rate equal to the Eurodollar Rate
Margin applicable at the time of such occurrence plus two percent
(2.00%) per annum.
(b) Unused Commitment Fee.
(i) The Borrowers shall pay to the Agent, for the account of
the Lenders in accordance with their respective Pro Rata Shares, a fee
(the "Unused Commitment Fee"), accruing at the rate of one-half of one
percent (0.50%) per annum on the average daily amount by which the
Revolving Credit Commitments exceed the sum of (A) the outstanding
principal amount of the Loans, plus (B) the outstanding Reimbursement
Obligations, plus (C) the aggregate undrawn face amount of all
outstanding Letters of Credit, for the period commencing on the
Effective Date and ending on the Revolving Credit Termination Date,
such Unused Commitment Fee being payable (I) monthly, in arrears,
commencing on the first day of the calendar month next succeeding the
Effective Date and (II) on the Revolving Credit Termination Date.
(ii) Notwithstanding the foregoing, in the event that any
Lender fails to fund its Pro Rata Share of any Loan requested by the
Borrowers which such Revolving Lender is obligated to fund under the
terms of this Agreement, (A) such Lender shall not be entitled to any
Unused Commitment Fees with respect to its Revolving Credit Commitment
until such failure has been cured in accordance with Section
4.02(b)(v)(B) and (B) until such time, the Unused Commitment Fee shall
accrue in favor of the Lenders which have funded their respective Pro
Rata Shares of such requested Loan, shall be allocated among such
performing Lenders ratably based upon their relative Revolving Credit
Commitments, and shall be calculated based upon the average amount by
which the aggregate Revolving Credit Commitments of such performing
Lenders exceeds the sum of (1) the outstanding principal amount of the
Loans owing to such performing Lenders, plus (2) the outstanding
Reimbursement Obligations owing to such performing Lenders, plus (3)
the aggregate participation interests of such performing
58
Lenders arising pursuant to Section 3.01(e) with respect to undrawn and
outstanding Letters of Credit.
(c) Amendment Fee. The Borrowers shall pay to the Agent, for
the account of the Lenders in accordance with their respective Pro Rata Shares,
a fee in the amount of $3,000,000, which fee shall be earned and payable as
follows: (i) $1,000,000 shall be fully earned and payable of the Effective Date;
(ii) $1,000,000 shall be fully earned and payable on December 31, 2000; and
(iii) $1,000,000 shall be fully earned and payable on June 30, 2001.
(d) Other Fees. The Borrowers shall pay to the Agent in
addition to any other fee referenced in this Agreement those certain fees
described in the Fee Letter.
(e) Calculation and Payment of Fees. All of the above fees
which accrue from time to time shall be calculated on the basis of the actual
number of days elapsed in a 360 day year. All of the above fees shall be payable
in addition to, and not in lieu of, interest, compensation, expense
reimbursements, indemnification and other Obligations. Fees shall be payable to
the Agent at its office in New York, New York in immediately available funds.
All fees shall be fully earned and nonrefundable when paid. All fees specified
or referred to (directly or by reference to an agreement pursuant to which such
fees are payable) in this Agreement due to the Agent, any Issuing Bank or any
Lender shall bear interest, if not paid when due, at the interest rate described
in Section 5.01(c), shall constitute Obligations and shall be secured by all of
the Collateral.
5.03. Special Provisions Governing Eurodollar Rate Loans. With
respect to Eurodollar Rate Loans:
(a) Amount of Eurodollar Rate Loans. Each Eurodollar Rate Loan
shall be for a minimum amount of $1,000,000 and in integral multiples of
$100,000 in excess of that amount.
(b) Determination of Eurodollar Interest Period. By giving
notice as set forth in Section 2.01(b) (with respect to a Borrowing of
Eurodollar Rate Loans) or Section 5.01(e) (with respect to a conversion into or
continuation of Eurodollar Rate Loans), the Borrowers shall have the option,
subject to the provisions of this Section 5.03, to select an interest period
(each a "Eurodollar Interest Period") to apply to the Loans described in such
notice, subject to the following provisions:
(i) The Borrowers may only select, as to a particular
Borrowing of Eurodollar Rate Loans, a Eurodollar Interest Period of one
(1), three (3), six (6), or, if available to all Lenders, nine (9) or
twelve (12) months in duration;
(ii) In the case of immediately successive Eurodollar Interest
Periods applicable to a Borrowing of Eurodollar Rate Loans, each
successive Eurodollar Interest Period shall commence on the day on
which the next preceding Eurodollar Interest Period expires;
(iii) If any Eurodollar Interest Period would otherwise expire
on a day which is not a Business Day, such Eurodollar Interest Period
shall be extended to expire on the
59
next succeeding Business Day if the next succeeding Business Day occurs
in the same calendar month, and if there will be no succeeding Business
Day in such calendar month, the Eurodollar Interest Period shall expire
on the immediately preceding Business Day;
(iv) The Borrowers may not select a Eurodollar Interest Period
as to any Loan if such Eurodollar Interest Period terminates later than
the scheduled Revolving Credit Termination Date;
(v) The Borrowers may not select a Eurodollar Interest Period
with respect to any portion of principal of a Loan which extends beyond
a date on which the Borrowers are required to make a scheduled payment
of such portion of principal; and
(vi) There shall be no more than eight (8) Eurodollar Interest
Periods in effect at any one time.
(c) Determination of Interest Rate. As soon as practicable on
the second Business Day prior to the first day of each Eurodollar Interest
Period (the "Eurodollar Interest Rate Determination Date"), the Agent shall
determine (pursuant to the procedures set forth in the definition of "Eurodollar
Rate") the interest rate which shall apply to the Eurodollar Rate Loans for
which an interest rate is then being determined for the applicable Eurodollar
Interest Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to Distribution and to each Lender. The Agent's
determination shall be presumed to be correct, absent manifest error, and shall
be binding upon the Borrowers.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In
the event that at least one (1) Business Day before the Eurodollar Interest Rate
Determination Date:
(i) the Agent is advised by Citibank that deposits in Dollars
(in the applicable amounts) are not being offered by Citibank in the
London interbank market for such Eurodollar Interest Period; or
(ii) the Agent determines that adequate and fair means do not
exist for ascertaining the applicable interest rates by reference to
which the Eurodollar Rate then being determined is to be fixed; or
(iii) the Requisite Lenders advise the Agent that the
Eurodollar Rate for Eurodollar Rate Loans comprising such Borrowing
will not adequately reflect the cost to such Requisite Lenders of
obtaining funds in Dollars in the London interbank market in the amount
substantially equal to such Lenders' Eurodollar Rate Loans in Dollars
and for a period equal to such Eurodollar Interest Period;
then the Agent shall forthwith give notice thereof to Distribution, whereupon
(until the Agent notifies Distribution that the circumstances giving rise to
such suspension no longer exist) the right of the Borrowers to elect to have
Loans bear interest based upon the Eurodollar Rate shall be suspended and each
outstanding Eurodollar Rate Loan shall be converted into a Base Rate Loan on the
last day of the then current Eurodollar Interest Period therefor,
notwithstanding any prior election by the Borrowers to the contrary.
60
(e) Booking of Eurodollar Rate Loans. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of, its
Eurodollar Lending Office or Eurodollar Affiliate or its other offices or
Affiliates. No Lender shall be entitled, however, to receive any greater amount
under Article XIV as a result of the transfer of any such Eurodollar Rate Loan
to any office (other than such Eurodollar Lending Office) or any Affiliate
(other than such Eurodollar Affiliate) than such Lender would have been entitled
to receive immediately prior thereto, unless (i) the transfer occurred at a time
when circumstances giving rise to the claim for such greater amount did not
exist and (ii) such claim would have arisen even if such transfer had not
occurred.
(f) Affiliates Not Obligated. No Eurodollar Affiliate or other
Affiliate of any Lender shall be deemed a party to this Agreement or shall have
any liability or obligation under this Agreement.
5.04. Determination of Applicable Base Rate Margin and
Eurodollar Rate Margin.
(a) The Base Rate Margin and Eurodollar Rate Margin applicable
from time to time during the period commencing on May 31, 2000 and ending on the
date on which the Borrowers deliver to the Agent and Lenders a Compliance
Certificate, as and when required by Section 8.01(d), with respect to the Fiscal
Quarter ending December 31, 2000 (the "Fixed Pricing Termination Date") shall be
determined as set forth in the definitions of "Base Rate Margin" and "Eurodollar
Rate Margin", respectively.
(b) The Base Rate Margin and Eurodollar Rate Margin applicable
from time to time during the period commencing on the day immediately succeeding
the Fixed Pricing Termination Date and ending on the last day of the first
fiscal month of the fiscal quarter next succeeding the fiscal quarter in which
the Fixed Pricing Termination Date occurs shall be determined by reference to
Borrowers' compliance with Performance Levels 1 through 3 as of the end of the
fiscal quarter most recently ended prior to the Fixed Pricing Termination Date.
(c) The Base Rate Margin and Eurodollar Rate Margin applicable
from time to time thereafter shall be determined by reference to Borrowers'
compliance with Performance Levels 1 through 3 as of the date the Financial
Statements and related Compliance Certificate for each fiscal quarter of the
Borrowers are due pursuant to Section 8.01(b) and Section 8.01(d), commencing
with the Financial Statements for the fiscal quarter then most recently ended,
and be effective during the period commencing on the first day of the month in
which such Financial Statements for the preceding fiscal quarter are due and
ending on the last day of the first month of the next fiscal quarter for which
such determination is made.
61
ARTICLE VI
CONDITIONS TO LOANS AND LETTERS OF CREDIT
6.01. Conditions Precedent to the Effectiveness of Agreement.
This Agreement shall become effective upon and be isubject to the satisfaction
on the Effective Date of all of the following conditions precedent:
(a) Documents. The Agent shall have received on or before the
Effective Date all of the following:
(i) this Agreement and all other agreements, documents and
instruments relating to the loan and other credit transactions
contemplated by this Agreement and described in the List of Closing
Documents attached hereto as Exhibit L and made a part hereof, each
duly executed where appropriate and in form and substance satisfactory
to the Agent; without limiting the foregoing, Parent and the Borrowers
hereby direct their counsel, Akerman, Senterfitt & ▇▇▇▇▇▇, P.A., and
their special New York counsel, Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,to
prepare and deliver to the Agent, the Lenders and the Issuing Banks,
the legal opinions referred to in such List of Closing Documents;
(ii) audited Financial Statements of Parent and its
Subsidiaries for the Fiscal Year ended December 31, 1999 in form and
substance satisfactory to the Agent and Lenders and the report on the
Financial Statements of Parent and its Subsidiaries for the Fiscal Year
ended December 31, 1998 and related management letter of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP;
(iii) unaudited Financial Statements of Parent and its
Subsidiaries on a consolidated and consolidating basis for the Fiscal
Quarter ending March 31, 2000 and Compliance Certificates for the
Fiscal Year ending December 31, 1999 and March 31, 2000;
(iv) the Projections;
(v) an Officer's Certificate executed and delivered on behalf
of Parent and Distribution (on behalf of the Borrowers) certifying that
all conditions precedent set forth herein have been met and no
Potential Event of Default or Event of Default has occurred or is
continuing after giving effect to this Agreement;
(vi) a Borrowing Base Certificate dated May 24, 2000;
(vii) the Appraisals, with results and in form and substance
satisfactory to the Agent and Lenders;
(viii) such additional documentation as the Agent may
reasonably request based on its and its counsel's review of
documentation executed and delivered in connection with the Predecessor
Agreement;
(ix) executed amendments to the TROL Documents (as in effect
prior to the Effective Date) in form and substance satisfactory to the
Agent and Lenders; and
62
(x) a release agreement in form and substance satisfactory to
the Agent with respect to any and all claims against the Agent, Issuing
Bank and Lenders executed by the Borrowers and their Affiliates.
(b) No Legal Impediments. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and the Agent shall not have
received any notice that litigation is pending or threatened which is likely to,
(i) enjoin, prohibit or restrain this Agreement becoming effective as of the
Effective Date or the making of the Loans and/or the issuance of Letters of
Credit requested to be made or issued, as applicable, on the Effective Date or
(ii) result in a Material Adverse Effect.
(c) No Change in Condition. No material adverse change shall
have occurred (as certified to the Agent and the Lenders by the respective chief
financial officers) in the business, assets, management, operations, financial
condition or prospects of Parent or any Borrower since December 31, 1999.
(d) Interim Liabilities and Equity. Since December 31, 1999,
no Borrower and no Guarantor shall have (i) entered into any material (as
determined in good faith by the Agent) commitment or transaction, including,
without limitation, transactions for borrowings and capital expenditures, which
are not in the ordinary course of such Person's business, except with respect to
the consummation of the transactions contemplated hereby, (ii) declared or paid
any distribution or dividend, (iii) established or assumed any obligations with
respect to compensation or employee benefit plans other than plans with respect
to the Permitted Equity Securities Options, or (iv) redeemed, repurchased, or
issued any equity Securities.
(e) No Loss of Material Agreements and Licenses. Since
December 31, 1999, no Permit, agreement, lease, or license which, in the
judgment of the Agent, is material to the business, operations or employee
relations of any Borrower or any Guarantor, including without limitation, any
TROL Document and any agreement relating to the Senior Subordinated Notes, shall
have been terminated, modified, revoked, breached, or declared to be in default,
or if breached or declared to be in default during such period, such breach or
default shall have been cured or waived on terms satisfactory to the Agent and
Lenders.
(f) No Default. No Event of Default or Potential Event of
Default under the terms of the Predecessor Agreement shall have occurred after
March 31, 2000 other than as identified in Schedule 7.01-L. No obligee under the
TROL Documents, Senior Subordinated Notes, or any other material Contractual
Obligation of the Borrowers or Guarantors shall have exercised any right or
remedy thereunder and the obligees under the TROL Documents shall have waived
all defaults thereunder existing as of the Effective Date and their rights and
remedies with respect thereto.
(g) TROL Documents Amendment. The amendment of the TROL
Documents referenced in Section 6.01(a)(ix) shall have become effective, as
certified to the Agent and Lenders, in writing, by the Parent.
(h) No Litigation. The Super-Majority Lenders shall have
reviewed all litigation pending or threatened against any Borrower and/or any
Guarantor and determined to
63
their satisfaction that no Material Adverse Effect will, or is reasonably likely
to, result from the existence thereof.
(i) Capital Structure, Officers and Senior Management of
Parent and Its Subsidiaries. The corporate and capital structure, officers and
senior management of the Parent and its Subsidiaries shall be satisfactory to
the Lenders. None of the members of Parent's Board of Directors as of March 31,
2000 shall have ceased acting as members of such Board of Directors.
(j) Engagement of PricewaterhouseCoopers LLP. Parent and
Borrowers shall have engaged PricewaterhouseCoopers LLP to provide services to
Parent and its Subsidiaries of a scope and nature satisfactory to the Agent and
Requisite Lenders and PricewaterhouseCoopers LLP shall have provided to the
Agent and Lenders its related reports to Parent and its Subsidiaries concurrent
with delivery thereof to Parent and its Subsidiaries.
(k) Representations and Warranties. All of the representations
and warranties contained in Section 7.01 and in any of the other Loan Documents
shall be true and correct in all material respects on and as of the Effective
Date.
(l) Fees and Expenses Paid. There shall have been paid to the
Agent, for the accounts of (i) the lenders and issuing bank under the
Predecessor Agreement, as applicable, all fees and expenses accrued and payable
through the Effective Date under or in connection with the Predecessor Agreement
and (ii) the Lenders, Issuing Banks, and the Agent, as applicable, all fees and
expenses due and payable on or before the Effective Date in connection with the
execution and delivery of this Agreement, including, without limitation, fees
payable in accordance with the terms of the Fee Letter.
6.02. Conditions Precedent to All Subsequent Loans and Letters
of Credit. The obligation of each Lender to make any Loan requested to be made
by it on any Funding Date and the agreement of each Issuing Bank to issue any
Letter of Credit on any date is subject to the following conditions precedent as
of each such date, both before and after giving effect to the Loans to be made
and/or the Letter of Credit to be issued on such date:
(a) Representations and Warranties. All of the representations
and warranties of the Borrowers contained in Section 7.01 and in any other Loan
Document (other than representations and warranties which expressly speak as of
a different date) shall be true and correct in all material respects.
(b) No Defaults. No Event of Default or Potential Event of
Default shall have occurred and be continuing or would result from the making of
the requested Loan or issuance of the requested Letter of Credit.
(c) No Legal Impediments. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and the Agent shall not have
received from any Lender or Issuing Bank notice that, in the judgment of such
Lender or Issuing Bank, litigation is pending or threatened which is likely to,
enjoin, prohibit or restrain, or impose or result in the imposition of any
material adverse condition upon, (i) such Lender's making of the requested Loan
or
64
participation in the requested Letter of Credit or (ii) such Issuing Bank's
issuance of the requested Letter of Credit.
(d) No Material Adverse Effect. No event shall have occurred
since the date of this Agreement which has resulted, or is reasonably likely to
result, in a Material Adverse Effect.
Each submission by Distribution to the Agent of a Notice of Borrowing with
respect to any Loan, each acceptance by the Borrowers of the proceeds of each
Loan made hereunder, each submission by Distribution to an Issuing Bank of a
request for issuance of a Letter of Credit and the issuance of such Letter of
Credit, shall constitute a representation and warranty by the Borrowers as of
the Funding Date in respect of such Loan and the date of issuance of such Letter
of Credit, that all the conditions contained in this Section 6.02 have been
satisfied or waived in accordance with Section 15.07.
65
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01. Representations and Warranties of Parent and the
Borrowers. In order to induce the Lenders and the Issuing Banks to enter into
this Agreement and to make the Loans and the other financial accommodations to
the Borrowers and to issue the Letters of Credit described herein, the Parent
and each Borrower hereby represents and warrants to each Lender, each Issuing
Bank and the Agent that the following statements are true, correct and complete:
(a) Organization; Powers.
(i) Each of Distribution ▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇, Whitehall
Corporation, MR&O, Manufacturing, Finance Affiliate, Bearings, Leasing,
Aviation Sales SPS I, Inc., Aero Hushkit Corporation, Aviation Sales
Property Management Corp., TIMCO Engineered Systems, Inc., and Parent
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Aerocell is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Arkansas. Apex is a corporation duly organized, validly
existing and in good standing under the laws of the State of Arizona
and of each other jurisdiction in which failure to be so qualified and
in good standing will result, or is reasonably likely to result, in a
Material Adverse Effect. Caribe and Aircraft Interior Design, Inc. are
corporations duly organized, validly existing and in good standing
under the laws of the State of Florida and of each other jurisdiction
in which failure to be so qualified and in good standing will result,
or is reasonably likely to result, in a Material Adverse Effect.
Hydroscience, Inc. is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas and of each
other jurisdiction in which failure to be so qualified and in good
standing will result, or is reasonably likely to result, in a Material
Adverse Effect. AVSRE, L.P. is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of
Delaware and is in good standing under the laws of the State of Texas.
Distribution is duly qualified to do business and is in good standing
under the laws of the states of Texas, Florida, California, Oklahoma,
and Washington, and of each other jurisdiction in which failure to be
so qualified and in good standing will result, or is reasonably likely
to result, in a Material Adverse Effect. Aerocell is duly qualified to
do business and is in good standing under the laws of the state of
Arkansas and of each other jurisdiction in which failure to be so
qualified and in good standing will result, or is reasonably likely to
result, in a Material Adverse Effect. ▇▇▇▇▇-▇▇▇▇▇ is duly qualified to
do business and is in good standing under the laws of the states of
Kentucky and Ohio and of each other jurisdiction in which failure to be
so qualified and in good standing will result, or is reasonably likely
to result, in a Material Adverse Effect. Leasing is duly qualified to
do business and is in good standing under the laws of the state of
Florida and of each other jurisdiction in which failure to be so
qualified and in good standing will result, or is reasonably likely to
result, in a Material Adverse Effect. TIMCO and TIMCO Engineered
Systems, Inc. are each duly qualified to do business and in good
standing under the laws of the state of North Carolina and of each
other jurisdiction in which failure to be so qualified and in good
standing will result, or is reasonably likely to result, in a Material
Adverse Effect. Parent and Whitehall are duly qualified to do business
and are in good standing under the laws of the state of Florida
66
and of each other jurisdiction in which failure to be so qualified and
in good standing will result, or is reasonably likely to result, in a
Material Adverse Effect. Bearings is duly qualified to do business and
is in good standing under the laws of the states of Florida and Georgia
and of each other jurisdiction in which failure to be so qualified and
in good standing will result, or is reasonably likely to result, in a
Material Adverse Effect. Finance Affiliate and each Guarantor not
specifically referenced hereinabove is duly qualified to do business
and is in good standing under the laws of each jurisdiction in which
failure to be so qualified and in good standing will result, or is
reasonably likely to result, in a Material Adverse Effect. Each
Borrower and Guarantor (A) has filed and maintained effective (unless
exempt from the requirements for filing) a current Business Activity
Report with the appropriate Governmental Authority in the states of
Minnesota and New Jersey, (B) is a corporation for federal income tax
purposes, and (C) has all requisite corporate power and authority to
own, operate and encumber its Property and to conduct its business as
presently conducted and as proposed to be conducted in connection with
and following the consummation of the transactions contemplated by this
Agreement.
(ii) True, correct and complete copies of the Organizational
Documents identified on Schedule 7.01-A attached hereto have been
delivered to the Agent, each of which is in full force and effect, has
not been modified or amended except to the extent indicated therein or
as may be permitted pursuant to Section 10.14 and, to the best of each
Borrower's knowledge, there are no defaults under such Organizational
Documents and no events which, with the passage of time or giving of
notice or both, would constitute a default under such Organizational
Documents.
(b) Authority.
(i) Each Borrower and Guarantor has the requisite power and
authority (A) to execute, deliver and perform each of the Loan
Documents which are required to be executed on behalf of such Person as
required by this Agreement on or prior to the Effective Date and (B) to
file or record the Loan Documents which have been filed or recorded by
it as required by this Agreement on or prior to the Effective Date,
with any Governmental Authority.
(ii) The execution, delivery, performance and filing or
recording, as the case may be, of each of the agreements or documents
which are required to be executed, filed or recorded by or on behalf of
the Borrowers and the Guarantors in connection with or as required by
this Agreement on or prior to the Effective Date and to which any
Borrower or any Guarantor is party and the consummation of the
transactions contemplated thereby are within such Person's, as
applicable, corporate powers, have been duly authorized by all
necessary corporate action and such authorization has not been
rescinded. No other corporate action or proceedings on the part of any
Borrower or any Guarantor are necessary to consummate such
transactions.
(iii) Each of the Loan Documents to which any Borrower or any
Guarantor is a party (A) has been duly executed, delivered, filed or
recorded, as the case may be, on behalf of such Person, as applicable,
(B) where applicable, creates valid and perfected
67
first Liens in the Collateral covered thereby (except for Customary
Permitted Liens which might be senior to the Liens granted under the
Loan Documents) securing the payment of all of the obligations
purported to be secured thereby, (C) constitutes such Person's, as
applicable, legal, valid and binding obligation, enforceable against
such Person, as applicable, in accordance with its terms, and (D) is in
full force and effect and no material term or condition thereof has
been amended, modified or waived from the terms and conditions
contained therein as delivered to the Agent without the prior written
consent of the Lenders required to consent to such amendment,
modification or waiver. All parties to the Loan Documents have
performed and complied with all the terms, provisions, agreements and
conditions set forth therein and required to be performed or complied
with by such parties on or before the Effective Date, all filings and
recordings and other actions which are necessary or desirable to
perfect and protect the Liens granted pursuant to the Loan Documents
and preserve their required priority have been duly taken, and no
Potential Event of Default, Event of Default or breach of any covenant
by any such party exists thereunder.
(c) Corporate Affiliates; Ownership of Equity Securities.
Schedule 7.01-C attached hereto (i) contains a diagram indicating the corporate
structure of the Parent and each Person in which the Parent holds a direct or
indirect partnership, joint venture, or other equity interest and indicates the
nature of such interest with respect to each Person included in such diagram;
and (ii) accurately sets forth (A) the correct legal name of such Person, the
jurisdiction of its incorporation or organization and the jurisdictions in which
it is qualified to transact business as a foreign corporation or otherwise, and
(B) the authorized, issued and outstanding shares or interests of each class of
equity Securities of the Parent and each such Person, and, with respect to
Subsidiaries of the Parent, the owners of such shares or interests. None of such
issued and outstanding Securities is subject to any vesting, redemption, or
repurchase agreement, and there are no warrants or options (other than Permitted
Equity Securities Options) outstanding with respect to such Securities. The
outstanding Capital Stock of each Borrower and each Guarantor is duly
authorized, validly issued, fully paid and nonassessable and (except for the
Capital Stock of the Parent) is not Margin Stock, are free and clear of all
Liens, except for Liens granted pursuant to the Loan Documents, are not subject
to any option or purchase rights, conversion or exchange rights, call,
commitment or claim of any right, title or interest therein or thereto, and have
been issued in compliance with all applicable Requirements of Law.
(d) No Conflict. The execution, delivery and performance of
each of the Loan Documents to which any Borrower or any Guarantor is a party do
not and will not (i) conflict with the Organizational Documents of such Person a
party thereto, (ii) to the best of each Borrower's and each Guarantor's
knowledge, constitute a tortious interference with any Contractual Obligation of
any Person or conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of Law
or Contractual Obligation (including without limitation, the TROL Documents and
agreements relating to the Senior Subordinated Notes) of any Borrower or any
Guarantor or require termination of any Contractual Obligation, the consequences
of which violation, breach, default or termination, singly or in the aggregate,
will result, or is reasonably likely to result, in a Material Adverse Effect or
may subject the Agent, any of the Lenders or any of the Issuing Banks to any
liability, (iii) result in or require the creation or imposition of any Lien
whatsoever upon any of the
68
Property or assets of a Borrower or such Guarantor, other than Liens
contemplated by the Loan Documents, or (iv) require any approval of the
shareholders of such Person.
(e) Governmental Consents. The execution, delivery and
performance of each of the Loan Documents to which any Borrower or any Guarantor
is a party do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by any Governmental
Authority, except (i) filings, consents or notices which have been made,
obtained or given and (ii) filings necessary to create or perfect security
interests in the Collateral.
(f) Governmental Regulation. No Borrower or Guarantor is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, or the Investment Company Act of
1940, or any other federal or state statute or regulation which limits its
ability to incur indebtedness or its ability to consummate the transactions
contemplated by the Loan Documents.
(g) Restricted Junior Payments. During the period commencing
on their respective dates of incorporation and ending on the Effective Date, no
Borrower or Guarantor directly or indirectly declared, ordered, paid or made, or
set apart any sum or Property for, any payment or distribution which would
constitute a Restricted Junior Payment under this Agreement, or agreed to do so.
(h) Financial Position. Complete and accurate copies of the
following Financial Statements, materials and other information have been
delivered to the Agent: (i) the Projections and (ii) the audited financial
statements of the Parent for the Fiscal Year ended on December 31, 1999. All
financial statements included in such materials were prepared in all material
respects in conformity with GAAP, except as otherwise noted therein, and fairly
present in all material respects the respective financial positions, and the
results of operations and cash flows for each of the periods covered thereby of
the applicable Person as at the respective dates thereof. No Borrower or
Guarantor has, as of the Effective Date, any Accommodation Obligation,
contingent liability or liability for any taxes, long-term leases or
commitments, not disclosed in writing to the Agent and the Lenders prior to the
Effective Date.
(i) Projections. The Projections are reasonable based on the
information available to Parent at the time so furnished.
(j) Indebtedness. Schedule 1.01.4 sets forth all Indebtedness
for borrowed money of each Borrower and Guarantor as of the Effective Date;
there are no defaults in the payment of principal or interest on any
Indebtedness of any Borrower or Guarantor and no payments under such
Indebtedness have been deferred or extended beyond their stated maturity (except
as disclosed on such Schedule).
(k) Litigation; Adverse Effects. There is no action, suit,
proceeding, Claim, investigation or arbitration before or by any Governmental
Authority or private arbitrator pending or, to the knowledge of any Borrower,
threatened against any Borrower or any Guarantor or any of their respective
Property (i) challenging the validity or the enforceability of any of the Loan
Documents, (ii) which will, or is reasonably likely to, result in any Material
Adverse Effect, or (iii) under the Racketeering Influenced and Corrupt
Organizations Act or any
69
similar federal or state statute or law under any jurisdiction outside of the
United States where such Person is a defendant in a criminal indictment that
provides for the forfeiture of assets to any Governmental Authority as a
criminal penalty. There is no material loss contingency within the meaning of
GAAP which has not been reflected in the Financial Statements of the Parent and
its Subsidiaries. No Borrower or Guarantor is subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority
which will, or is reasonably likely to, result in a Material Adverse Effect. All
pending litigation to which any Borrower or Guarantor is a party as of the
Effective Date is disclosed on Schedule 7.01-K attached hereto and made a part
hereof.
(l) Predecessor Agreement Events of Default; No Material
Adverse Effect. All Events of Default existing on the Effective Date (prior to
giving effect to this Agreement) under the terms of the Predecessor Agreement
are disclosed on Schedule 7.01-L attached hereto and made a part hereof. Since
April 15, 2000, there has occurred no event with respect to any Borrower or any
Guarantor which has resulted, or is reasonably likely to result, in a Material
Adverse Effect.
(m) Payment of Taxes. Except as disclosed on Schedule 7.01-M
attached hereto and made a part hereof, all tax returns and reports of each
Borrower and Guarantor required to be filed have been timely filed or the filing
date therefor has been properly extended, and all taxes, assessments, fees and
other charges of Governmental Authorities thereupon and upon or relating to
their respective Properties, assets, income and franchises which are shown in
such returns or reports to be due and payable have been paid, except to the
extent (i) such taxes, assessments, fees and other charges are being contested
in good faith by an appropriate proceeding diligently pursued as permitted by
the terms of Section 9.04 and (ii) non-payment of the amounts thereof would not,
individually or in the aggregate, result in a Material Adverse Effect. None of
the Parent or Borrowers has any knowledge of any proposed tax assessment against
any Borrower or any Guarantor, or any Property of any of them, that will, or is
reasonably likely to, result in a Material Adverse Effect.
(n) Performance. No Borrower or Guarantor has received any
notice, citation, or allegation, or has actual knowledge, that (i) any of them
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to any of them, (ii) any of the Property of any such Person is in
violation of any Requirement of Law, or (iii) any condition exists which, with
the giving of notice or the lapse of time or both, would constitute a default
with respect to any such Contractual Obligation, in each case, except where such
default or defaults, if any, will not, or is not reasonably likely to, result in
a Material Adverse Effect.
(o) Disclosure. The representations and warranties of Parent,
each Borrower, and each Guarantor contained in the Loan Documents, and all
certificates and other documents delivered to the Agent pursuant to the terms
thereof, do not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. None of the Parent, Borrowers or Guarantors has intentionally
withheld any fact from the Agent, the Issuing Banks or the Lenders in regard to
any matter which will, or is reasonably likely to, result in a Material Adverse
Effect.
70
(p) Requirements of Law. Each of the Borrowers and Guarantors
is in compliance with all Requirements of Law applicable to it and its
respective business, in each case where the failure to so comply individually or
in the aggregate will, or is reasonably likely to, result in a Material Adverse
Effect.
(q) Environmental Matters.
(i) Except as disclosed on Schedule 7.01-Q attached hereto:
(A) the operations of each Borrower and each Guarantor and
their respective Properties comply in all material respects with all
applicable Environmental, Health or Safety Requirements of Law;
(B) each Borrower and each Guarantor has obtained all
environmental, health and safety Permits necessary for its respective
operations and Properties, and all such Permits are in good standing
and each Borrower and each Guarantor is currently in material
compliance with all terms and conditions of such Permits;
(C) no Borrower or Guarantor, or any of their present or past
Property or operations, is subject to or the subject of any judicial or
administrative proceeding, order, judgment, decree, dispute,
negotiations, agreement, or settlement respecting (I) any
Environmental, Health or Safety Requirements of Law, (II) any Remedial
Action, (III) any Claims or Liabilities and Costs arising from the
Release or threatened Release of a Contaminant into the environment, or
(IV) any violation of or liability under any Environmental, Health or
Safety Requirement of Law that a Borrower or such Guarantor reasonably
believes will result in an expenditure over $250,000;
(D) no Borrower or Guarantor has filed any notice under any
applicable Requirement of Law (I) reporting a Release of a Contaminant,
(II) under Section 103(c) of CERCLA, indicating past or present
treatment, storage or disposal of a hazardous waste, as that term is
defined under 40 C.F.R. Part 261 or any state equivalent; or (III)
reporting a violation of any applicable Environmental, Health or Safety
Requirement of Law;
(E) none of the present or past Property of any Borrower or
any Guarantor is listed or proposed for listing on the National
Priorities List ("NPL") pursuant to CERCLA or on the Comprehensive
Environmental Response Compensation Liability Information System List
("CERCLIS") or any similar state list of sites requiring Remedial
Action;
(F) no Borrower or Guarantor has sent or directly arranged for
the transport of any waste to any current or proposed NPL site, CERCLIS
or any similar state list of sites requiring Remedial Action;
(G) there is not now in connection with or resulting from any
Borrower's or any Guarantor's operations, nor, to any Borrower's
knowledge, has there ever been on or in any of the Property (I) any
treatment, recycling, storage or disposal of any hazardous waste
requiring a Permit under 40 C.F.R. Parts 264 and 265 or any state
equivalent,(II)
71
any landfill, waste pile, underground storage tank or surface
impoundment, (III) any asbestos-containing material; or (IV) a Release
of any polychlorinated biphenyls (PCB) used in hydraulic oils,
electrical transformers or other Equipment;
(H) no Borrower or Guarantor has received any notice or Claim
to the effect that it is or may be liable to any Person as a result of
the Release or threatened Release of a Contaminant into the
environment;
(I) to no Borrower's or Guarantor's knowledge, have there been
any Releases of any Contaminants to the environment from any Property
except in compliance with Environmental, Health or Safety Requirements
of Law, or which have not been corrected to the satisfaction of the
appropriate Governmental Authorities;
(J) to no Borrower's or Guarantor's knowledge, has any
Borrower or any Guarantor any contingent liability in connection with
any Release or threatened Release of any Contaminants into the
environment;
(K) no Environmental Lien has attached to any Property; and
(L) none of the Property is subject to any Environmental
Property Transfer Act, or to the extent such acts are applicable to any
such Property, the Borrower or Guarantor owning, leasing or operating
such Property has fully complied with the requirements of such acts.
(ii) each Borrower and each Guarantor is conducting and will
continue to conduct its respective business and operations in an
environmentally responsible manner in material compliance with
Environmental, Health or Safety Requirements of Law and no Borrower or
Guarantor has been, nor has any reason to believe that it will be,
subject to Liabilities and Costs arising out of or relating to
environmental, health or safety matters that have or will result in
cash expenditures by a Borrower or Guarantor in excess of $250,000 in
the aggregate for any calendar year ending after the Effective Date.
(r) ERISA. No Borrower, Guarantor, or ERISA Affiliate
maintains or contributes to any Benefit Plan or Multiemployer Plan other than
those listed on Schedule 7.01-R attached hereto. Each Plan which is intended to
be qualified under Section 401(a) of the Internal Revenue Code as currently in
effect either (i) has received a favorable determination letter from the IRS
that the Plan is so qualified or (ii) an application for determination of such
tax-qualified status will be made to the IRS prior to the end of the applicable
remedial amendment period under Section 401(a) of the Internal Revenue Code as
currently in effect, and each Borrower, Guarantor, and ERISA Affiliate shall
diligently seek to obtain a determination letter with respect to such
application. Except as identified on Schedule 7.01-R, no Borrower or Guarantor
maintains or contributes to any employee welfare benefit plan within the meaning
of Section 3(1) of ERISA which provides benefits to employees after termination
of employment other than as required by Section 601 of ERISA. Each Borrower and
each of the Guarantors are in compliance in all material respects with the
responsibilities, obligations and duties imposed on it by ERISA and the Internal
Revenue Code with respect to all Plans. No Benefit Plan has incurred any
accumulated funding deficiency (as defined in Sections 302(a)(2) of ERISA and
72
412(a) of the Internal Revenue Code) whether or not waived. No Borrower, ERISA
Affiliate, or any fiduciary of any Plan which is not a Multiemployer Plan (i)
has engaged in a nonexempt prohibited transaction described in Sections 406 of
ERISA or 4975 of the Internal Revenue Code or (ii) has taken or failed to take
any action which would constitute or result in a Termination Event. No Borrower
or ERISA Affiliate has any potential liability under Sections 4063, 4064, 4069,
4204 or 4212(c) of ERISA. No Borrower or ERISA Affiliate has incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. Schedule B to the most recent annual report filed with the IRS with
respect to each Benefit Plan and furnished to the Agent is complete and accurate
in all material respects. Since the date of each such Schedule B, there has been
no material adverse change in the funding status or financial condition of the
Benefit Plan relating to such Schedule B. No Borrower or ERISA Affiliate has (i)
failed to make a required contribution or payment to a Multiemployer Plan or
(ii) made a complete or partial withdrawal under Sections 4203 or 4205 of ERISA
from a Multiemployer Plan. No Borrower or ERISA Affiliate has failed to make a
required installment or any other required payment under Section 412 of the
Internal Revenue Code on or before the due date for such installment or other
payment. No Borrower or ERISA Affiliate is required to provide security to a
Benefit Plan under Section 401(a)(29) of the Internal Revenue Code due to a
Benefit Plan amendment that results in an increase in current liability for the
plan year. Except as disclosed on Schedule 7.01-R, no Borrower or Guarantor, by
reason of the transactions contemplated hereby has any obligation to make any
payment to any employee pursuant to any Plan or existing contract or
arrangement. Each Borrower has given to the Agent copies of all of the
following: each Benefit Plan and related trust agreement (including all
amendments to such Plan and trust) in existence or committed to as of the
Effective Date and in respect of which such Borrower or any ERISA Affiliate is
currently an "employer" as defined in section 3(5) of ERISA, and the most recent
summary plan description, actuarial report, determination letter issued by the
IRS and Form 5500 filed in respect of each such Benefit Plan in existence; a
listing of all of the Multiemployer Plans with the aggregate amount of the most
recent annual contributions required to be made by such Borrower and all ERISA
Affiliates to each such Multiemployer Plan, any information which has been
provided to such Borrower or an ERISA Affiliate regarding withdrawal liability
under any Multiemployer Plan and the collective bargaining agreement pursuant to
which such contribution is required to be made.
(s) Labor Matters. No Borrower or Guarantor is a party to any
collective bargaining agreement.
(t) Securities Activities. No Borrower or Guarantor is engaged
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock.
(u) Solvency. After giving effect to this Agreement the Loans
to be made and the Letters of Credit to be issued on the Effective Date or such
other date as Loans requested hereunder are made or Letters of Credit requested
hereunder are issued, and the disbursement of the proceeds of such Loans
pursuant to Distribution's instructions, each Borrower and each Guarantor is
Solvent.
(v) Patents, Trademarks, Permits, Etc.; Government Approvals.
73
(i) Each Borrower and Guarantor, as applicable, owns, is
licensed or otherwise has the lawful right to use, or has all Permits,
patents, trademarks, trade names, copyrights, technology, know-how,
permits and processes used in or necessary for the conduct of its
respective business as currently conducted which are material to its
condition (financial or otherwise), operations, performance and
prospects. No claims are pending or, to the best of each Borrower's
knowledge following diligent inquiry, threatened that any Borrower or
Guarantor is infringing or otherwise adversely affecting the rights of
any Person with respect to such Permits and other governmental
approvals, patents, trademarks, trade names, copyrights, technology,
know-how, permits and processes, except for such claims and
infringements as do not, in the aggregate, give rise to any liability
on the part of any Borrower or Guarantor which will, or is reasonably
likely to, result in a Material Adverse Effect.
(ii) The consummation of the transactions contemplated by the
Loan Documents will not impair the ownership of or rights under (or the
license or other right to use, as the case may be) any Permits and
governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how, permits or processes by any Borrower or any
Guarantor in any manner which will, or is reasonably likely to, result
in a Material Adverse Effect.
(w) Assets and Properties. Each Borrower and Guarantor has
good and marketable title to all of the assets and Property (tangible and
intangible) owned by it (except insofar as marketability may be limited by any
laws or regulations of any Governmental Authority affecting such assets), and
all such assets and Property are free and clear of all Liens, except Liens
securing the Obligations and Liens permitted under Section 10.03. Substantially
all of the assets and Property owned by, leased to, or used by any Borrower
and/or Guarantor is in adequate operating condition and repair, ordinary wear
and tear excepted (other than Inventory classified as "AR", "R", and "BER"), is
free and clear of any known defects except such defects as do not substantially
interfere with the continued use thereof in the conduct of normal operations,
and is able to serve the function for which they are currently being used,
except in each case where the failure of such asset to meet such requirements
would not, or is not reasonably likely to, result in a Material Adverse Effect.
Neither this Agreement nor any other Loan Document, nor any transaction
contemplated under any such agreement, will affect any right, title or interest
of any Borrower or any Guarantor in and to any of such assets in a manner that
would, or is reasonably likely to, result in a Material Adverse Effect.
(x) Insurance. Schedule 7.01-X attached hereto accurately sets
forth as of the Effective Date all insurance policies and programs currently in
effect with respect to the respective Property and assets and business of each
Borrower and Guarantor, specifying for each such policy and program, (i) the
amount thereof, (ii) the risks insured against thereby, (iii) the name of the
insurer and each insured party thereunder, (iv) the policy or other
identification number thereof, (v) the expiration date thereof, (vi) the annual
premium with respect thereto, and (vii) a list of claims and awards made
thereunder during the immediately preceding three (3) calendar years.
Distribution has delivered to the Agent copies of all such insurance policies.
Such insurance policies and programs are currently in full force and effect, in
compliance with the requirements of Section 9.05 and are in amounts sufficient
to cover the replacement value of the respective Property and assets of the
Borrowers and Guarantors.
74
(y) Pledge of Securities. The grant and perfection of the
security interest in the equity Securities of Borrowers, each Borrower's
Subsidiaries, and each Guarantor other than the Parent as contemplated by the
Loan Documents is not made in violation of any Requirement of Law.
75
ARTICLE VIII
REPORTING COVENANTS
Each Borrower, and to the extent specifically stated herein
below the Parent, covenants and agrees that so long as any Revolving Credit
Commitments are outstanding and thereafter until payment in full of all of the
Obligations (other than indemnities not yet due), unless the Requisite Lenders
shall otherwise give their prior written consent thereto:
8.01. Financial Statements. The Parent and each Borrower shall
maintain, and cause each of the other Guarantors to maintain, a system of
accounting established and administered in accordance with sound business
practices to permit preparation of consolidated and consolidating Financial
Statements in conformity with GAAP and each of the Financial Statements
described below shall be prepared from such system and records. Parent and the
Borrowers shall deliver or cause to be delivered to the Agent and the Lenders:
(a) Monthly Reports. As soon as practicable, and in any event
within (i) thirty (30) days after the end of each calendar month which is not
the last month of a Fiscal Quarter and (ii) forty-five (45) days after the end
of each calendar month which is the last month of a Fiscal Quarter, (A) the
consolidated and consolidating balance sheets of the Parent and its Subsidiaries
as at the end of such period and (B) the related consolidated and consolidating
statement of income of the Parent and its Subsidiaries and consolidated
statements of shareholders' equity and cash flow of the Parent and its
Subsidiaries, in each instance, for such calendar month, setting forth in each
case in comparative form the corresponding figures with respect to consolidated
statements for the corresponding calendar month referenced in the business plan
pertaining to such period certified by the chief financial officer of Parent as
fairly presenting the consolidated and consolidating financial position of the
Parent and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the calendar months indicated in accordance with
GAAP, subject to normal year end adjustments.
(b) Quarterly Reports. As soon as practicable, and in any
event within forty-five (45) days after the end of each Fiscal Quarter in each
Fiscal Year, the consolidated and consolidating balance sheets of the Parent and
its Subsidiaries as at the end of such period and the related consolidated and
consolidating statement of income of the Parent and its Subsidiaries and
consolidated statements of shareholders' equity and cash flow of the Parent and
its Subsidiaries, in each instance, for such Fiscal Quarter, setting forth in
comparative form the corresponding figures with respect to consolidated
statements for the corresponding period referenced in the business plan
pertaining to such period and the corresponding figures from the financial
forecast for the current Fiscal Year delivered on the Effective Date or pursuant
to Section 8.01(f), as applicable, certified by the chief financial officer of
Parent as fairly presenting the respective consolidated and consolidating
financial positions of the Parent and its Subsidiaries as at the dates indicated
and the results of their operations and cash flow for the periods indicated in
accordance with GAAP, subject to normal year end adjustments and excluding
footnotes. Notwithstanding the foregoing, in the event (i) the filing of the
Parent's Form 10-Q with the Commission with respect to any Fiscal Quarter is
delayed for any reason and Parent has provided Agent with written notice of such
delay by the due date for the reports required for such Fiscal Quarter under
this clause (b) and (ii) the Borrowers shall deliver either the required reports
or interim good faith estimates of the information required to be reported
76
under this clause (b) within fifty-five (55) days after the end of such Fiscal
Quarter, upon delivery of such required reports or interim estimates within such
period the Borrowers shall be deemed to have complied with the requirements of
this clause (b) with respect to such Fiscal Quarter; provided that Borrowers
deliver the required reporting substantially concurrently with Parent's filing
of its Form 10-Q with the Commission.
(c) Annual Reports. As soon as practicable, and in any event
within ninety (90) days after the end of each Fiscal Year, (i) the consolidated
and consolidating balance sheets of (A) the Parent and its Subsidiaries as at
the end of such Fiscal Year and (B) to the extent the same are routinely and
regularly prepared, each Borrower and its Subsidiaries as at the end of such
Fiscal Year and (ii) the related consolidated and consolidating statements of
income, shareholders' equity and cash flow of (A) the Parent and its
Subsidiaries and (B) to the extent the same are routinely and regularly
prepared, Leasing and its Subsidiaries and each Borrower and its Subsidiaries
for such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding figures
from the financial forecast for the current Fiscal Year delivered on the
Effective Date or pursuant to Section 8.01(f), as applicable, and (ii) a report
on such consolidated Financial Statements of the Parent and its Subsidiaries of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent certified public accountants acceptable
to the Agent, which report shall be unqualified as to the scope of the audit
performed and as to the "going concern" status of the Parent and its
Subsidiaries, shall not contain any other Impermissible Qualification, and shall
state that such Financial Statements fairly present the consolidated financial
position of the Parent and its Subsidiaries and, to the extent included in the
Parent's annual Financial Statements, Leasing and its Subsidiaries and each
Borrower and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for changes with which
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or any such other independent certified public accountants,
if applicable, shall concur and which shall have been disclosed in the notes to
the Financial Statements) and that the examination by such accountants in
connection with such Financial Statements has been made in accordance with
generally accepted auditing standards. Notwithstanding the foregoing, in the
event (A) the filing of the Parent's annual report with the Commission with
respect to any Fiscal Year is delayed for any reason and Parent has provided
Agent with written notice of such delay by the due date for the reports required
for such Fiscal Year under this clause (c) and (B) the Borrowers shall deliver
either the required reports or interim good faith estimates of the information
required to be reported under this clause (c) within one hundred five (105) days
after the end of such Fiscal Year, upon delivery of such required reports or
interim estimates within such period the Borrowers shall be deemed to have
complied with the requirements of this clause (c) with respect to such Fiscal
Year; provided that Borrowers deliver the required reporting substantially
concurrently with Parent's filing of its annual report with the Commission.
(d) Officer's Certificate. Together with each delivery of any
Financial Statement pursuant to this Section 8.01, (i) an Officer's Certificate
on behalf of Parent and the Borrowers substantially in the form of Exhibit M
attached hereto and made a part hereof, stating that the Person signatory
thereto has reviewed the terms of the Loan Documents, and has made, or caused to
be made under his/her supervision, a review in reasonable detail of the
transactions and financial condition Parent, of the Borrowers and their
Subsidiaries during the accounting period covered by such Financial Statements,
that such review has not disclosed the existence
77
during or at the end of such accounting period, and that such Person does not
have knowledge of the existence as at the date of such Officer's Certificate, of
any condition or event which constitutes an Event of Default or Potential Event
of Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action any Borrower, any
Guarantor, or any Subsidiary of a Borrower has taken, is taking and proposes to
take with respect thereto; and (ii) a certificate (the "Compliance
Certificate"), signed by Parent's and Distribution's chief financial officer,
setting forth calculations (with such specificity as the Agent may reasonably
request) for the period then ended which demonstrate compliance, when
applicable, with the provisions of Section 9.17 and Article XI.
(e) Accountant's Statement and Privity Letter. Together with
each delivery of the Financial Statements referred to in Section 8.01(c), a
written statement, in form and substance satisfactory to the Agent, of the firm
of independent certified public accountants giving the report thereon (i)
stating that their audit examination has included a review of the terms of this
Agreement as it relates to accounting matters, (ii) stating whether, in
connection with their audit examination, any condition or event which
constitutes an Event of Default or Potential Event of Default has come to their
attention, and if such condition or event has come to their attention,
specifying the nature and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to obtain knowledge of
any such condition or event that would not be disclosed in the course of their
audit examination, and (iii) stating that based on their audit examination
nothing has come to their attention which causes them to believe that the
information contained in either or both of the certificates delivered therewith
pursuant to Section 8.01(d) (as the information contained in such certificates
relates to the covenants set forth in Article XI) is not correct or that the
matters set forth in the Compliance Certificate delivered therewith pursuant to
Section 8.01(d)(ii) for the applicable Fiscal Year are not stated in accordance
with the terms of this Agreement. The statement referred to above shall be
accompanied by (x) a copy of the management letter or any similar report
delivered to any Borrower or Guarantor or to any officer or employee thereof by
such accountants in connection with such Financial Statements, to the extent
then available, and (y) a letter in substantially the form of Exhibit N attached
hereto and made a part hereof from the Parent to such accountants informing such
accountants that the Lenders are relying upon the Financial Statements audited
by such accountants and delivered to the Agent and the Lenders pursuant to
Section 8.01(c) and that a primary intent of the Parent in having such Financial
Statements audited is to induce the Lenders to continue to make Loans to the
Borrowers under this Agreement. The Agent and each Lender may, with the written
consent of Distribution (which consent shall not be unreasonably withheld or
delayed), communicate directly with such accountants. Parent shall deliver to
the Agent and Lenders, as soon as the same is available to it and in any event
no later than September 30, 2000, the management letter or any similar report
delivered to any Borrower or Guarantor or to any officer or employee thereof by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP with the Financial Statements of Parent for the Fiscal Year
ending December 31, 1999. To the extent a management letter or any similar
report referenced in clause (x) is not delivered concurrently with the aforesaid
accountants' written statement, such letter or report shall be delivered to the
Agent and Lenders no later than June 30 of the calendar year immediately
succeeding the Fiscal Year for which such written statement is delivered,
commencing with the Fiscal Year ending in 2000.
(f) Budgets; Business Plans; Financial Projections.
78
(i) General. As soon as practicable and in any event not later
than (A) January 31, 2001 for the Fiscal Year ending in 2001, (1) a
monthly budget for each Borrower and its Subsidiaries for such Fiscal
Year; (2) an annual business plan for each Borrower and its
Subsidiaries for such Fiscal Year, substantially in the form of the
business plans heretofore delivered to the Agent and the Lenders,
accompanied by a report reconciling all changes and departures from the
business plans delivered to the Agent and the Lenders for the preceding
Fiscal Year; and (3) a plan and financial forecast, prepared in
accordance with the Parent's and Distribution's normal accounting
procedures applied on a consistent basis, and (B) January 31, 2002 for
the Fiscal Year ending in 2002, (1) an annual business plan for each
Borrower and its Subsidiaries for such Fiscal Year, substantially in
the form of the business plans heretofore delivered to the Agent and
the Lenders, accompanied by a report reconciling all changes and
departures from the business plans delivered to the Agent and the
Lenders for the preceding Fiscal Year; and (2) a plan and financial
forecast, prepared in accordance with the Parent's and Distribution's
normal accounting procedures applied on a consistent basis, including,
without limitation, (I) forecasted consolidated and consolidating
balance sheets and statements of cash flow of the Parent and its
Subsidiaries and each Borrower and its Subsidiaries for each Fiscal
Year, (II) forecasted consolidated and consolidating balance sheets,
statements of earnings and retained earnings, and cash flow of the
Parent and its Subsidiaries, Leasing and its Subsidiaries, and each
Borrower and its Subsidiaries for and as of the end of each fiscal
quarter of the immediately succeeding Fiscal Year and for and as of the
end of each Fiscal Year thereafter, (III) the amount of forecasted
Capital Expenditures for such Fiscal Year, and (IV) forecasted
compliance with the provisions of Article XI.
(ii) Quarterly Projections. Quarterly, on the date Financial
Statements are required to be delivered pursuant to Section 8.01(b) for
the first three Fiscal Quarters of a Fiscal Year and on the date the
plan and financial forecast is required to be delivered pursuant to
Section 8.01(f)(i) for the last Fiscal Quarter of a Fiscal Year,
commencing with the due date for Financial Statements for the Fiscal
Quarter ending June 30, 2000, a monthly financial forecast for the four
Fiscal Quarters next succeeding such Fiscal Quarter then most recently
ended, prepared in accordance with the Parent's and Distribution's
normal accounting procedures applied on a consistent basis, including,
without limitation, (i) forecasted consolidated and consolidating
balance sheets and statements of cash flow of the Parent and its
Subsidiaries and each Borrower and its Subsidiaries for each month of
such four Fiscal Quarters, (ii) forecasted consolidated and
consolidating balance sheets, statements of earnings and retained
earnings, and cash flow of the Parent and its Subsidiaries, Leasing and
its Subsidiaries, and each Borrower and its Subsidiaries for and as of
the end of each month of such four Fiscal Quarters, (iii) the amount of
forecasted Capital Expenditures for each month of such four Fiscal
Quarters, and (iv) forecasted compliance with the provisions of Article
XI for each of such four Fiscal Quarters.
(iii) Cash Flow Projections. On Friday of each week,
eight-week projected cash flow statements of Parent and its
Subsidiaries, by week, in form and substance satisfactory to the Agent
and Requisite Lenders.
79
8.02. Off-Site Inventory Reports. On the Effective Date,
Distribution shall deliver to the Agent and the Lenders a report detailing
information regarding bailed, consigned and field warehoused Inventory of each
Borrower and its respective Subsidiaries in the form of Exhibit O attached
hereto and made a part hereof, and, promptly after the addition or termination
of any bailment, consignment or field warehousing arrangements, Distribution
shall deliver to the Agent and the Lenders an update of such report.
8.03. Borrowing Base Certificate; Appraisals.
(a) Borrowing Base Certificate. Distribution shall provide the
Agent and the Revolving Lenders (i) on Wednesday of each calendar week, or if a
Wednesday is not a Business Day, the immediately succeeding Business Day, with a
Borrowing Base Certificate for Eligible Receivables as of the immediately
preceding Friday, (ii) on a bi-weekly basis, on Wednesday of the applicable
week, or if a Wednesday is not a Business Day, the immediately succeeding
Business Day, with a Borrowing Base Certificate for Eligible Inventory of
Distribution as of the immediately preceding Friday, and (iii) on a monthly
basis, on the second Wednesday of each month, or if a Wednesday is not a
Business Day, the immediately succeeding Business Day, with a Borrowing Base
Certificate for Eligible Inventory of Persons other than Distribution as of the
immediately preceding month end, in each instance, together with a calculation
of the Texas Tax Reserve as of the date thereof if such Texas Tax Reserve
exceeds $200,000 and such supporting documents as the Agent deems desirable, all
certified as being true and correct by the chief financial officer, chief
executive officer, or controller of Distribution. The Borrowing Base
Certificates shall be accompanied by such supporting information as the Agent
and Requisite Lenders shall from time to time request and include, without
limitation, monthly agings of all unbilled Receivables and all Receivables owing
by account debtors located outside of the United States of America.
(b) Appraisals. Semi-annually, commencing on November 15,
2000, Distribution shall provide the Agent and the Lenders with appraisals of
(i) Distribution's Inventory and (ii) if requested by the Agent and Requisite
Lenders, each other Borrower's and Guarantor's Inventory, in each case, prepared
by an independent appraiser satisfactory to the Agent and on the same basis as
the Appraisals.
8.04. Events of Default. Promptly upon any of the chairman of
the board of directors, president, chief executive officer, chief operating
officer, chief financial officer, treasurer or controller of Parent or
Distribution obtaining knowledge (a) of any condition or event which constitutes
an Event of Default or Potential Event of Default, or becoming aware that any
Lender or the Agent has given any notice with respect to a claimed Event of
Default or Potential Event of Default under this Agreement, (b) that any Person
has given any notice to any Borrower or Guarantor or taken any other action with
respect to a claimed default or event or condition of the type referred to in
Section 12.01(e), or (c) of any condition or event which has resulted, or is
reasonably likely to result, in a Material Adverse Effect or affect the value
of, or the Agent's interest in, the Collateral in any material respect, such
Borrower shall deliver to the Agent and the Lenders an Officer's Certificate
specifying (i) the nature and period of existence of any such claimed default,
Event of Default, Potential Event of Default, condition or event, (ii) the
notice given or action taken by such Person in connection therewith, and (iii)
what action the applicable Borrower has taken, is taking and proposes to take
with respect thereto.
80
8.05. Lawsuits.
(a) Institution of Proceedings. Promptly upon Parent or any
Borrower obtaining knowledge of the institution of, or written threat of, any
action, suit, proceeding, governmental investigation or arbitration against or
affecting any Borrower, any Guarantor, or any Property not previously disclosed
pursuant to Section 7.01(k), which action, suit, proceeding, governmental
investigation or arbitration exposes, or in the case of multiple actions, suits,
proceedings, governmental investigations or arbitrations arising out of the same
general allegations or circumstances which expose, in such Borrower's reasonable
judgment, the Borrowers and/or any Guarantor to liability in an amount
aggregating $1,000,000 or more (exclusive of claims covered by insurance
policies of the Borrowers and Guarantors unless the insurers of such claims have
disclaimed coverage or reserved the right to disclaim coverage on such claims),
such Borrower shall give written notice thereof to the Agent and the Lenders and
provide such other information as may be reasonably available to enable each
Lender and the Agent and its counsel to evaluate such matters.
(b) Quarterly Reports. As soon as practicable and in any event
within forty-five (45) days after the end of each fiscal quarter of Parent,
Distribution shall provide a written quarterly report to the Agent and the
Lenders covering the institution of, or written threat of, any action, suit,
proceeding, governmental investigation or arbitration (not previously reported)
against or affecting any Borrower, any Guarantor, or any Property not previously
disclosed by Parent or the Borrowers to the Agent and the Lenders, and shall
provide such other information at such time as may be reasonably available to
enable each Lender and the Agent and its counsel to evaluate such matters.
(c) Additional Reports Upon Request. In addition to the
requirements set forth in clauses (a) and (b) of this Section 8.05, Parent and
Distribution, upon the request of the Agent or the Requisite Lenders, shall
promptly give written notice of the status of any action, suit, proceeding,
governmental investigation or arbitration covered by a report delivered pursuant
to either of such clauses (a) or (b) and provide such other information as may
be reasonably available to it to enable each Lender and the Agent and its
counsel to evaluate such matters.
8.06. Insurance. As soon as practicable and in any event by
the last day of February in each calendar year, Distribution shall deliver to
the Agent and the Lenders (a) a report in form and substance reasonably
satisfactory to the Agent and the Lenders outlining (i) all material insurance
coverage maintained as of the date of such report by the Borrowers and
Guarantors and the duration of such coverage and (ii) the claims and awards, if
any, made under such insurance for the twelve (12) calendar month period then
ending and (b) evidence that all premiums with respect to such coverage have
been paid when due.
8.07. ERISA Notices. Parent and Distribution shall deliver or
cause to be delivered to the Agent and the Lenders, at the Borrowers' expense,
the following information and notices as soon as reasonably possible, and in any
event:
(a) within ten (10) Business Days after any Borrower or any
ERISA Affiliate knows or has reason to know that a Termination Event has
occurred, a written statement of the chief financial officer of Distribution
describing such Termination Event and the action, if any,
81
which such Borrower or any ERISA Affiliate has taken, is taking or proposes to
take with respect thereto, and when known, any action taken or threatened by the
IRS, DOL or PBGC with respect thereto;
(b) within ten (10) Business Days after any Borrower knows or
has reason to know that an assessment of a prohibited transaction excise tax
under Section 4975 of the Internal Revenue Code has occurred, a statement of the
chief financial officer of Distribution describing such transaction and the
action which such Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto;
(c) within three (3) Business Days after the filing of the
same with the DOL, IRS or PBGC, copies of each annual report (form 5500 series),
including Schedule B thereto, filed with respect to each Benefit Plan;
(d) within three (3) Business Days after receipt by any
Borrower or any ERISA Affiliate of each actuarial report for any Benefit Plan or
Multiemployer Plan and each annual report for any Multiemployer Plan, copies of
each such report;
(e) within three (3) Business Days after the filing of the
same with the IRS, a copy of each funding waiver request filed with respect to
any Benefit Plan and all communications received by any Borrower or any ERISA
Affiliate with respect to such request;
(f) within three (3) Business Days after the occurrence any
material increase in the benefits of any existing Benefit Plan or the
establishment of any new Benefit Plan or the commencement of contributions to
any Benefit Plan to which any Borrower or any ERISA Affiliate was not previously
contributing, notification of such increase, establishment or commencement;
(g) within three (3) Business Days after any Borrower or any
ERISA Affiliate receives notice of the PBGC's intention to terminate a Benefit
Plan or to have a trustee appointed to administer a Benefit Plan, copies of each
such notice;
(h) within three (3) Business Days after any Borrower or any
Guarantor receives notice of any unfavorable determination letter from the IRS
regarding the qualification of a Plan under Section 401(a) of the Internal
Revenue Code, copies of each such notice and letter;
(i) within three (3) Business Days after any Borrower or any
ERISA Affiliate receives notice from a Multiemployer Plan regarding the
imposition of withdrawal liability, copies of each such notice;
(j) within three (3) Business Days after any Borrower or any
ERISA Affiliate fails to make a required installment or any other required
payment under Section 412 of the Internal Revenue Code on or before the due date
for such installment or payment, a notification of such failure; and
(k) within three (3) Business Days after any Borrower or any
ERISA Affiliate knows (A) a Multiemployer Plan has been terminated, (B) the
administrator or plan sponsor of a
82
Multiemployer Plan intends to terminate a Multiemployer Plan, or (C) the PBGC
has instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.
For purposes of this Section 8.07, Parent, each Borrower and each ERISA
Affiliate shall be deemed to know all facts known by the Administrator of any
Plan of which Parent, such Borrower or any ERISA Affiliate is the plan sponsor.
8.08. Environmental Notices.
(a) Parent and Distribution shall notify the Agent and the
Lenders in writing, promptly upon Parent's or any Borrower's learning thereof,
of any:
(i) notice or claim to the effect that any Borrower or any
Guarantor is or may be liable to any Person as a result of the Release
or threatened Release of any Contaminant into the environment which
could reasonably result in an expenditure by the Borrowers and/or any
Guarantor over $500,000;
(ii) notice that any Borrower or any Guarantor is subject to
investigation by any Governmental Authority evaluating whether any
Remedial Action is needed to respond to the Release or threatened
Release of any Contaminant into the environment which could reasonably
result in an expenditure by the Borrowers and/or any Guarantor over
$500,000;
(iii) notice that any Property is subject to an Environmental
Lien;
(iv) notice to any Borrower or any Guarantor of any material
violation of any Environmental, Health or Safety Requirement of Law;
(v) condition which might reasonably result in a material
violation of any Environmental, Health or Safety Requirement of Law;
(vi) commencement or threat of any judicial or administrative
proceeding alleging a material violation by any Borrower or any
Guarantor (or any predecessor in interest thereof) of any
Environmental, Health or Safety Requirement of Law;
(vii) new or proposed changes to any existing Environmental,
Health or Safety Requirement of Law that could result in a Material
Adverse Effect;
(viii) any proposed acquisition of stock, assets, real estate,
or leasing of property, or any other action by any Borrower or any
Guarantor that could subject such Borrower or any Guarantor to
environmental, health or safety Liabilities and Costs which could
reasonably result in an expenditure by the Borrowers and/or any
Guarantor over $500,000; or
(ix) any filing or report made by any Borrower or any
Guarantor with any Governmental Authority with respect to any
unpermitted Release or threatened Release of a Contaminant which could
reasonably result in an expenditure by the Borrowers and/or any
Guarantor over $500,000.
83
(b) Within sixty (60) days after the end of each Fiscal Year,
Distribution shall submit to the Agent and the Lenders a report summarizing the
status of environmental, health or safety compliance, hazard or liability issues
identified in notices required pursuant to Section 8.08(a), disclosed on
Schedule 7.01-Q, or identified in any notice or report required herein, which
report shall include, with respect to any Real Property leased or acquired
during the period covered by such report, the results of an annual inspection of
the Property with respect to whether it contains any asbestos-containing
material and, in the event any Property does contain any asbestos-containing
material, what actions will be taken to eliminate or remediate the same.
8.09. Labor Matters. Parent and Distribution shall notify the
Agent and the Lenders in writing, promptly upon Parent's or any Borrower's
learning thereof, of (i) any material labor dispute to which any Borrower or any
Guarantor may become a party, including, without limitation, any strikes,
lockouts or other grievances relating to any Borrower's or any Guarantor's
plants and other facilities and (ii) any liability relating to its employees
incurred with respect to the closing of any plant or other facility of any
Borrower or any Guarantor.
8.10. SEC Reporting. Promptly after the same are available,
Parent and Distribution shall deliver to the Agent and the Lenders copies of all
Financial Statements, reports and notices, registration statements and proxy
statements or other filings, if any, sent or made available generally by any
Borrower, Parent and/or any other Guarantor to its respective Securities holders
or filed with the Commission or other securities exchange.
8.11. Hedge Agreements. Distribution shall provide to the
Agent, promptly upon the execution by any Borrower or any Subsidiary of a
Borrower of any Hedge Agreement, written notice of the notional amount thereof.
8.12. Other Reports. Distribution shall deliver or cause to be
delivered to the Agent and the Lenders (a) all written notices and statements of
collateral described in or required by the terms of any other Loan Document as
and when described therein, (b) copies of all press releases made available
generally by the Parent or any of its Subsidiaries to the public concerning
material developments in the business of such Person(s), and (c) reports, if
any, submitted to the Parent or any of its Subsidiaries or their respective
boards of directors by such Person's independent public accountants, including,
without limitation, any management report prepared in connection with the annual
audit.
8.13. Notice of Default; TROL Document Amendments. Parent
shall deliver or cause to be delivered to the Agent and Lenders written notice
of the occurrence of any breach or default under the terms of the TROL
Documents, Senior Subordinated Notes, Supplemental Term Loan Note, or other
material Contractual Obligation of any Borrower or Guarantor promptly upon the
occurrence thereof and, in any event, concurrent with any notice thereof to the
obligees thereunder or within two (2) Business Day after any Borrower or
Guarantor receives notice thereof. Immediately upon execution thereof, Parent
shall deliver to the Agent and each Lender a copy of each amendment to any TROL
Document.
8.14. Other Information. Promptly upon receiving a request
therefor from the Agent or the Requisite Lenders, Parent and the Borrowers shall
prepare and deliver to the Agent and the Lenders such other information with
respect to the Borrowers, the Guarantors, or the Collateral,
84
including, without limitation, schedules identifying and describing the
Collateral and any dispositions thereof, as from time to time may be reasonably
requested by the Agent or the Requisite Lenders.
85
ARTICLE IX
AFFIRMATIVE COVENANTS
Each Borrower, and to the extent specifically stated
hereinbelow the Parent, covenants and agrees that so long as any Revolving
Credit Commitments are outstanding and thereafter until payment in full of all
of the Obligations (other than indemnities not yet due), unless the Requisite
Lenders shall otherwise give prior written consent:
9.01. Existence, Etc. Each Borrower and the Parent shall at
all times maintain, and cause each of its Subsidiaries to maintain, its
corporate existence and preserve and keep, or cause to be preserved and kept, in
full force and effect their respective rights and franchises material to their
respective businesses.
9.02. Corporate Powers; Conduct of Business. Each Borrower and
the Parent shall, and shall cause each of its Subsidiaries to, qualify and
remain qualified to do business and maintain its good standing in each
jurisdiction in which the nature of its business and the ownership of its
Property requires it to be so qualified and in good standing.
9.03. Compliance with Laws, Etc. Each Borrower and the Parent
shall, and shall cause each of its Subsidiaries to, (a) comply with all
Requirements of Law and all restrictive covenants affecting it or its business,
Property, assets or operations, and (b) obtain as needed all Permits necessary
for its operations and maintain such Permits in good standing, except in the
case where noncompliance with either clause (a) or (b) above is not reasonably
likely to result in a Material Adverse Effect.
9.04. Payment of Taxes and Claims. Each Borrower and the
Parent shall, and shall cause each of its Subsidiaries to, file all tax returns
and reports as and when required by the related Governmental Authority and pay
(a) all taxes, assessments and other governmental charges imposed upon it or on
any of its Property or assets or in respect of any of its franchises, business,
income or Property before any penalty or interest accrues thereon and (b) all
Claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by Section 10.03) upon any of the
Property or assets of the Parent, any Borrower or any other Subsidiary of
Parent, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided, however, that no such taxes, assessments and
governmental charges referred to in clause (a) above or Claims referred to in
clause (b) above need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
9.05. Insurance. Each Borrower or Parent shall maintain in
full force and effect the insurance policies and programs listed on Schedule
7.01-X or substantially similar policies and programs or other policies and
programs as are acceptable to the Agent. All such policies and programs shall be
maintained with insurers acceptable to the Agent. Each certificate and policy
relating to Property damage, boiler and machinery and/or business interruption
coverage shall contain an endorsement, in form and substance acceptable to the
Agent, showing loss payable to the Agent, for the benefit of the Holders, and,
if required by the Agent, naming the Agent as an additional insured under such
policy. Each certificate and policy relating to coverage other than the
foregoing
86
shall, if required by the Agent, contain an endorsement naming the Agent as an
additional insured under such policy. Such endorsement or an independent
instrument furnished to the Agent shall provide that the insurance companies
will give the Agent at least thirty (30) days' written notice before any such
policy or policies of insurance shall be altered adversely to the interests of
the Holders or cancelled and that no act, whether willful or negligent, or
default of any Borrower or any other Person shall affect the right of the Agent
to recover under such policy or policies of insurance in case of loss or damage.
In the event any Borrower or Parent at any time or times hereafter shall fail to
obtain or maintain any of the policies or insurance required herein or to pay
any premium in whole or in part relating thereto, then the Agent, without
waiving or releasing any obligations or resulting Event of Default hereunder,
may at any time or times thereafter (but shall be under no obligation to do so)
obtain and maintain such policies of insurance and pay such premiums and take
any other action with respect thereto which the Agent deems advisable. All sums
so disbursed by the Agent shall constitute Protective Advances hereunder and be
part of the Obligations, payable as provided in this Agreement.
9.06. Inspection of Property; Books and Records; Discussions.
Each Borrower and Parent shall permit, and shall cause each of their respective
Subsidiaries to permit, any authorized representative(s) designated by either
the Agent or any Lender to visit and inspect, whether by access to any
Borrower's, the Parent's or their respective Subsidiaries' MIS or otherwise, any
of the Property, to examine, audit, check and make copies of any Borrower's, the
Parent's and their respective Subsidiaries' financial and accounting records,
books, journals, orders, receipts and any correspondence (other than privileged
correspondence with legal counsel) and other data relating to their respective
businesses or the transactions contemplated hereby or referenced herein
(including, without limitation, in connection with environmental compliance,
hazard or liability, and quarterly (or more often) examinations of the
Collateral and compliance with Borrowing Base requirements by such
representatives designated by the Agent), and to discuss their affairs, finances
and accounts with their management personnel and independent certified public
accountants, all upon reasonable written notice and at such reasonable times
during normal business hours, as often as may be reasonably requested. Each such
visitation and inspection (i) by or on behalf of any Lender shall be at such
Lender's expense and (ii) by or on behalf of the Agent shall be at the
Borrowers' expense. Each Borrower and the Parent shall keep and maintain, and
cause each of their respective Subsidiaries to keep and maintain, in all
material respects on its MIS and otherwise proper books of record and account in
which entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its respective businesses and activities, including,
without limitation, transactions and other dealings with respect to the
Collateral. If an Event of Default has occurred and is continuing and the
Obligations have been accelerated pursuant to Section 12.02(a), the Borrowers
and Parent, upon the Agent's request in connection with efforts to enforce the
rights and remedies of the Agent, the Lenders and the Issuing Banks under the
Loan Documents, shall turn over, and cause each of their respective Subsidiaries
to turn over, any such records requested by the Agent to the Agent or its
representatives; provided, however, that the Borrowers and Parent may, in their
discretion, retain copies of such records. Without limiting the foregoing,
Parent and the Borrowers acknowledge and agree that the Agent and Lenders will
engage an independent consultant to act as their representative to undertake
certain of the aforesaid actions on behalf of the Agent and Lenders and covenant
that Parent and the Borrowers will, and will cause their Subsidiaries to,
cooperate fully with such consultant in the conduct of its activities and make
available such personnel, information, data and documents as are requested by
such consultant in the conduct of such activities, all at the expense of the
Borrowers.
87
9.07. Required Hedge Agreements. The Parent and Borrowers
shall enter into Hedge Agreements within sixty (60) calendar days after the
Effective Date containing terms by which the Borrowers are protected against
fluctuations in interest rates as to an aggregate notional amount of not less
than the amount equal to fifty percent (50%) of the then outstanding aggregate
principal balance of their Indebtedness for borrowed money and Indebtedness
incurred under the TROL Documents, which Hedge Agreements shall otherwise be
reasonably acceptable to the Agent and purchased from a Lender, an Affiliate of
a Lender or such other Person reasonably acceptable as a credit matter to the
Agent. The Parent and Borrowers shall determine to their own satisfaction
whether such Hedge Agreements are sufficient to provide protection and to meet
the needs of the Parent and Borrowers and such other obligors and none of the
Agent, the Issuing Banks or the Lenders shall have any obligation or
accountability with respect thereto or any obligation to propose, quote or enter
into any Hedge Agreement.
9.08. Insurance and Condemnation Proceeds. The Borrowers or
the Parent, as applicable, having directed, or having caused Subsidiaries of the
Parent whose property or interests in property comprise part of the Collateral,
if applicable, to direct all insurers under policies of Property damage, boiler
and machinery and business interruption insurance and payors of any condemnation
claim or award relating to the Property to pay all proceeds payable under such
policies or with respect to such claim or award directly to the Agent, for the
benefit of the Holders, the Borrowers and Parent hereby agree that, in no case
shall such proceeds be payable to any Borrower(s) and the Agent or to any
Guarantor and the Agent. The Agent shall, upon receipt of such proceeds, apply
all of the proceeds so received in repayment of the Obligations in the manner
set forth in Section 4.01(b)(vi)(B). Notwithstanding the foregoing, in the event
proceeds of insurance or condemnation claims or awards received by the Agent
under property damage, boiler and machinery policies or business interruption
insurance policies (i) is less than $500,000, Agent shall, upon receipt of such
proceeds and provided that no Event of Default or Potential Event of Default
shall have occurred and continue unwaived, remit the amount so received to a
Borrower or a Guarantor, as applicable or (ii) constitutes Replacement Proceeds,
Agent shall, upon receipt of such proceeds and provided that no Event of Default
or Potential Event of Default shall have occurred and continue unwaived, hold
the amount so received as Cash Collateral for the Obligations, subject to a
Borrower's or a Guarantor's, as applicable, right to withdraw amounts from such
Cash Collateral upon its request therefor to restore, rebuild or replace the
Property subject to such insurance payment or condemnation award.
Notwithstanding the foregoing, in the case of an insurance payment or
condemnation award in an amount greater than $1,000,000, if (i) the Agent
receives notice from a Borrower that it or a Guarantor, as applicable, does not
intend to restore, rebuild or replace the Property subject to such insurance
payment or condemnation award, (ii) the applicable Borrower or Guarantor fails
to replace or commence the restoration or rebuilding of such Property within six
(6) months after the Agent's receipt of the proceeds of such insurance payment
or condemnation award, or (iii) upon completion of the restoration, rebuilding
or replacement of such Property, the unused proceeds from such insurance payment
or condemnation award exceed $500,000, then (x) upon the occurrence of either of
the events described in clauses (i) or (ii) above, all such proceeds, and (y)
upon the occurrence of either of the events described in clause (iii) above,
such excess, shall constitute Net Cash Proceeds of Sale received by a Borrower
or a Guarantor and shall be applied to the Obligations pursuant to the terms of
Section 4.01(b).
9.09. ERISA Compliance. The Borrowers shall, and shall cause
each of the Guarantors and its/their ERISA Affiliates to, establish, maintain
and operate all Plans to comply in all
88
material respects with the provisions of ERISA, the Internal Revenue Code, all
other applicable laws, and the regulations and interpretations thereunder and
the respective requirements of the governing documents for such Plans.
9.10. Deposit Accounts; Collection Account Agreements. The
Borrowers shall, and shall cause each of the Guarantors to, maintain in full
force and effect Collection Account Agreements with respect to each of their
respective depository accounts into which collections of Receivables and other
proceeds of Collateral are deposited. Parent and Borrowers shall, or shall cause
the Guarantors to, close each deposit account identified by an asterisk on
Schedule 10.15 within sixty (60) days after the Effective Date and open
replacement deposit accounts therefor at one or more of the Lenders, subject to
Collection Account Agreements.
9.11. Maintenance of Property. The Borrowers shall, and shall
cause each of the Guarantors to, maintain in all material respects all of its
owned and leased Property in good, safe and insurable condition and repair, and
not permit, commit or suffer any waste or abandonment of any such Property and
from time to time shall make or cause to be made all material repairs, renewal
and replacements thereof, including, without limitation, any capital
improvements which may be required; provided, however, that such Property may be
altered or renovated in the ordinary course of a Borrower's or a Guarantor's
business.
9.12. Condemnation. Immediately upon any Borrower's learning
of the institution of any proceeding for the condemnation or other taking of any
of the owned or leased Real Property of any Borrower or Guarantor, Distribution
shall notify the Agent of the pendency of such proceeding, and permit the Agent
to participate in any such proceeding, and from time to time will deliver to the
Agent all instruments reasonably requested by the Agent to permit such
participation.
9.13. Future Liens on Real Property. Upon the request of the
Agent or Requisite Lenders, the Borrowers and Parent shall, and shall cause the
other Guarantors to, execute and deliver to the Agent, for the benefit of the
Holders, immediately upon the acquisition or leasing by a Borrower, Parent or
any other Guarantor of any Real Property on which any Inventory of a Borrower or
any Guarantor is located, a mortgage, deed of trust, assignment or other
appropriate instrument evidencing a Lien upon such Real Property, lease or
interest, together with such title insurance policies (mortgagee's form),
certified surveys, appraisals, and local counsel opinions with respect thereto
and such other agreements, documents and instruments which the Agent deems
reasonably necessary or desirable, the same to be in form and substance
acceptable to the Agent and to be subject only to (a) Liens permitted under
Section 10.03 and (b) such other Liens as the Agent and Lenders may reasonably
approve, it being understood that the granting of such additional security for
the Obligations is a material inducement to the execution and delivery of this
Agreement by each Lender and the Issuing Bank.
9.14. Consignee/Bailee Letters; Landlord Waivers; Filings. The
Borrowers and Parent shall, and shall cause each of the other Guarantors to,
obtain consignee or bailee letters or landlord waivers (as applicable)
substantially in the form attached hereto as Exhibit D from each consignee or
bailee of Inventory of a Borrower and/or a Guarantor (separately or in the
aggregate) having a minimum value (at the lower of cost or market) of $500,000
and each landlord for premises on which Inventory of the Borrowers and/or
Guarantors (separately or in the aggregate) having a minimum value (at the lower
of cost or market) of $500,000, promptly upon delivery of such
89
Inventory to such consignee, bailee or premises, and (ii) cause to be executed
and delivered to the Agent concurrently with execution and delivery of such
consignee or bailee letter, UCC financing statements in form and substance
satisfactory to the Agent, naming the Agent as secured party, with respect to
such Inventory located on the premises of such consignee or bailee.
9.15. Future Pledges of Equity Securities; Other Collateral
Documents.
(a) Each Borrower and Parent shall, and shall cause each of
its respective Subsidiaries (other than Subsidiaries of Leasing) to, execute and
deliver to the Agent for the benefit of the Holders, concurrently with the
issuance of any equity Securities to any Borrower, the Parent, or such
Subsidiary of any Borrower or Parent in connection with any Investment made by
such Person, or formation or acquisition of a Subsidiary, a pledge of (i) all of
the equity Securities issued to or acquired by such Person, if the Person
formed, acquired or in which an Investment is made is not a Foreign Subsidiary,
and (ii) 65% of the equity Securities of any Foreign Subsidiary.
(b) Each Borrower and Parent shall, and shall cause its
respective Subsidiaries to, execute and deliver to the Agent, for the benefit of
the Holders, an aircraft mortgage and security agreement, naming the Agent as
secured party, concurrently with such Borrower's, Parent's, or such
Subsidiaries', as applicable, acquisition of any aircraft or aircraft engines
registered with the Federal Aviation Administration; and each Borrower and
Parent shall cause all direct Subsidiaries of a Borrower or Parent, as
applicable, to execute and deliver to the Agent guarantees, security agreements
and other Loan Documents related to Collateral owned by such Subsidiaries
concurrently with such Persons' becoming Subsidiaries of a Borrower,
Manufacturing, or Parent, in each instance consistent with the Loan Documents
executed and delivered on or before the Effective Date.
(c) Notwithstanding the foregoing, nothing in this Section
9.15 shall permit any Borrower or Parent or any Subsidiary of a Borrower to make
any Investment, directly or indirectly, not otherwise permitted by Section (A)
10.04 or Section (B) 10.17.
9.16. Additional Parent Covenant. The Parent shall within
three (3) days after its receipt of any distribution, dividend or payment from
any Subsidiary of Parent, make a capital contribution in the amount thereof (net
of taxes allocable to transfers under Requirements of Law and amounts used to
discharge its obligations as permitted under Section 10.06(d)) to Distribution.
9.17. Joint Venture. TIMCO shall cause ▇▇▇▇▇▇▇▇/▇▇▇▇▇ Cargo
Conversions, LLC, a North Carolina limited liability company in which TIMCO owns
a fifty percent (50%) equity interest, to distribute fifty percent (50%) of its
net income to TIMCO at least quarterly and confirm its receipt of such
distribution to the Agent concurrently with delivery by Parent of the financial
reporting required by Section 8.01(b).
9.18. Computer System. Parent and Borrowers shall, by no later
than September 15, 2000, have in operation a computer system adequate to provide
the financial and Borrowing Base reporting required under the terms of this
Agreement.
90
ARTICLE X
NEGATIVE COVENANTS
Parent and each Borrower covenants and agrees that it shall
comply with the following covenants so long as any Revolving Credit Commitments
are outstanding and thereafter until payment in full of all of the Obligations
(other than indemnities not yet due), unless the Requisite Lenders shall
otherwise give prior written consent:
10.01. Indebtedness. Neither the Parent nor any Borrower
shall, nor shall the Parent permit any of its Subsidiaries to, directly or
indirectly create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any Indebtedness, except:
(a) the Obligations, whether directly or by Accommodation
Obligation;
(b) Indebtedness for trade payables, wages and other accrued
expenses incurred in the ordinary course of business, whether or not evidenced
by notes;
(c) Indebtedness incurred with respect to the Supplemental
Term Loan and Supplemental Term Loan Warrant, whether directly or by
Accommodation Obligation;
(d) Permitted Existing Indebtedness and any extensions,
renewals, refundings or replacements of Permitted Existing Indebtedness,
provided that any such extension, renewal, refunding or replacement is in an
aggregate principal amount not greater than the principal amount of, and is on
terms no less favorable to Parent, such Borrower or the applicable Subsidiary
than the terms of, the Permitted Existing Indebtedness so extended, renewed,
refunded or replaced;
(e) to the extent permitted by Article XI and in any event in
an aggregate amount not to exceed $5,000,000 at any time for all Borrowers and
other Subsidiaries of Parent, Indebtedness of the Borrowers and its Subsidiaries
with respect to Capital Leases and purchase money Indebtedness incurred to
finance the acquisition of fixed assets, and Indebtedness incurred to refinance
such Capital Leases and purchase money Indebtedness; provided, however, prior to
incurring Capital Lease obligations owing to any one lessor or group of
affiliated or related lessors or purchase money Indebtedness owing to any one
holder or group of affiliated or related holders thereof, which in either case
aggregate(s) more than $500,000, the applicable Borrower or other Subsidiary of
Parent shall obtain from such lessor(s) or holder(s) a duly executed
intercreditor agreement in form and substance satisfactory to the Agent;
(f) Indebtedness in respect of taxes, assessments,
governmental charges and Claims for labor, materials or supplies, to the extent
that payment thereof is not required pursuant to Section 9.04;
(g) Indebtedness constituting Accommodation Obligations
permitted by Section 10.05;
(h) Indebtedness in respect of profit sharing plans to the
extent permitted under Section 10.04;
91
(i) Indebtedness in respect of the Hedge Agreements (i)
required under Section 9.07 and (ii) in respect of foreign exchange contracts
containing terms reasonably acceptable to the Agent and purchased from a Lender,
an Affiliate of a Lender or such other Person as is reasonably acceptable as a
credit matter to the Agent; provided, however, that the aggregate notional
amount (as advised to the Agent by the counterparty(ies) to Hedge Agreements and
confirmed by Parent) of all Hedge Agreements in respect of foreign exchange
contracts at any given time shall not exceed $10,000,000;
(j) Indebtedness with respect to reasonable warranties and
indemnities made under any agreements for asset sales permitted under Section
10.02 and Contractual Obligations of the Borrowers or their Subsidiaries entered
into in the ordinary course of their respective businesses;
(k) Indebtedness under appeal bonds in connection with
judgments which do not result in an Event of Default or a Potential Event of
Default or any other breach hereunder, provided that the aggregate amount of all
such Indebtedness does not exceed $2,000,000;
(l) Indebtedness arising from intercompany loans from a
Borrower to any Subsidiary of such Borrower which is a Guarantor or from a
Borrower to any other Borrower provided that such Indebtedness is subordinated
to the Obligations on terms and subject to agreements satisfactory to the Agent;
and
(m) in addition to the Indebtedness permitted by clauses (a)
through (l) above, other unsecured Indebtedness incurred by the Borrowers and
other Subsidiaries of Parent in an aggregate amount not to exceed $2,000,000 at
any time outstanding.
10.02. Sales of Assets. No Borrower or Guarantor which is a
Subsidiary of Parent shall sell, assign, transfer, lease, convey or otherwise
dispose of any of its Property, whether now owned or hereafter acquired, or any
income or profits therefrom, or enter into any agreement to do so, except:
(a) the sale of Property (other than Property subject to
clause (b) below) outside of the ordinary course of such Person's business for
consideration not less than the Fair Market Value thereof so long as (i) the
Fair Market Value thereof does not exceed $5,000,000 in the aggregate, (ii) any
non-cash consideration resulting from such sale shall be pledged or assigned to
the Agent, for the benefit of the Holders, pursuant to an instrument in form and
substance acceptable to the Agent, and (iii) such Borrower complies with the
mandatory prepayment provisions set forth in Section 4.01(b) and the conditions
to the release of Collateral described in Section 13.09(c);
(b) in addition to sales of Property described in clause (a)
above, the sale of the Property identified on Schedule 1.01.1 subject to the
terms set forth on such Schedule;
(c) the sale or lease of Inventory in the ordinary course of
business of a Borrower or such Guarantors to Persons who are not Affiliates of
such Persons;
(d) the disposition of Equipment if (i) such Equipment is
obsolete or no longer useful in the ordinary course of business of such Borrower
or the applicable Guarantor, provided
92
that the aggregate Fair Market Value of all such Equipment disposed of in any
Fiscal Year by the Borrowers and Guarantors shall not exceed $500,000, or (ii)
within six (6) months after such disposition, an amount equal to the proceeds
therefrom is either (A) used to finance the purchase of replacement Equipment
and the seller thereof delivers to the Agent evidence of such use and that the
replacement Equipment is free and clear of all Liens except those created under
the Loan Documents or (B) delivered to the Agent for application to the
repayment of the Obligations pursuant to the mandatory prepayment provisions set
forth in Section 4.01(b);
(e) the sale to General Electric Capital Corporation by Apex
and Bearings of their Receivables owing by AlliedSignal Inc. in accordance with
the practices of Apex and Bearings and the terms applicable to such sales
immediately preceding the Effective Date; and
(f) the sale of Investments in Cash Equivalents permitted
pursuant to Section 10.04(a).
Notwithstanding the foregoing, Parent, Borrowers and Guarantors may enter into
agreements for the sale of Property outside of the ordinary course of its
business; provided that (i) written notice of such Person's intention to enter
into such agreement is delivered to the Agent no less than ten (10) Business
Days prior to entering into such agreement and (ii) the agreement expressly
provides that such sale is subject to the approval of Requisite Lenders to the
extent not otherwise permitted by the terms of this Section 10.02.
10.03. Liens. No Borrower or Guarantor shall directly or
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any of their respective Property or assets except:
(a) Liens created pursuant to the Loan Documents;
(b) Permitted Existing Liens;
(c) Customary Permitted Liens;
(d) purchase money Liens (including the interest of a lessor
under a Capital Lease or an Operating Lease having substantially the same
economic effect and Liens to which any Property is subject at the time of such
Person's purchase thereof) with respect to purchases of fixed assets, securing
an amount not to exceed $1,000,000 in the aggregate at any time or from time to
time for all Borrowers and Guarantors which are Subsidiaries of Parent; provided
that (A) such Liens shall not apply to any Property other than that purchased or
subject to such Capital Lease and (B) with respect to Liens securing Capital
Lease obligations owing to any one lessor or group of affiliated or related
lessors or purchase money Indebtedness owing to any one holder or group of
affiliated or related holders thereof, which in either case aggregate(s) more
than $500,000, the Borrowers shall obtain from such lessor or holder a duly
executed intercreditor agreement in form and substance satisfactory to the Agent
prior to the granting any such Lien;
(e) Liens securing the Indebtedness permitted under Section
10.01(c) pursuant to the Collateral Documents Amendment;
93
(f) federal tax Liens not resulting in an Event of Default
under Section 12.01(j)(ii); and
(g) extensions, renewals, refundings and replacements of Liens
referred to in clauses (a), (b), and (e) of this Section 10.03; provided that
any such extension, renewal, refunding or replacement of a Lien referred to in
clause (b) or (e) shall be limited to the Property covered by the Lien extended,
renewed, refunded or replaced and that the obligations secured by any such
extension, renewal, refunding or replacement Lien shall be in an amount not
greater than the amount of the obligations then secured by the Lien extended,
renewed, refunded or replaced.
10.04. Investments. No Borrower or Guarantor shall directly or
indirectly make or own any Investment except:
(a) Investments in Cash Equivalents;
(b) Permitted Existing Investments;
(c) Investments in the form of advances by a Borrower to
employees in the ordinary course of business for moving, relocation and travel
expenses; and other loans to employees for any lawful purpose, provided that (i)
each loan permitted under this clause (c) shall be evidenced by a promissory
note, (ii) the aggregate principal amount of all such advances and loans at any
time outstanding from the Borrowers shall not exceed $500,000, and (iii) no such
advances or loans outstanding at any time to any one Person shall exceed
$100,000;
(d) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(e) Investments by a Borrower in Foreign Subsidiaries formed
for the sole purpose of distribution of Inventory of such Borrower outside of
the United States and which Foreign Subsidiaries own no Inventory and retain
cash and cash equivalents only to the extent required to pay expenses associated
with maintenance of an office and related personnel engaged to conduct its
business in the jurisdiction in which it is domiciled; and
(f) to the extent they constitute Investments, contributions
to and payments of benefits under any Plan in existence as of the Effective Date
as required by the benefit commitments in such Plan as of the Effective Date.
No Borrower shall form any direct Subsidiary after the Effective Date or permit
any of its Subsidiaries or Guarantor to form any Subsidiary except to the extent
Investments therein are permitted hereinabove. No Borrower or Guarantor which is
a Subsidiary of Parent may make any Investment in any Subsidiary of Leasing
which is not a Guarantor.
10.05. Accommodation Obligations. No Borrower or Guarantor
shall directly or indirectly create or become or be liable with respect to any
Accommodation Obligation, except:
94
(a) recourse obligations resulting from endorsement of
negotiable instruments for collection in the ordinary course of its business;
(b) Permitted Existing Accommodation Obligations and any
extensions, renewals or replacements thereof, provided that the aggregate
Indebtedness under any such extension, renewal or replacement is not greater
than the Indebtedness under, and shall be on terms no less favorable to such
Borrower or Guarantor than the terms of, the Permitted Existing Accommodation
Obligation so extended, renewed or replaced;
(c) Accommodation Obligations (i) arising under the Loan
Documents or (ii) included in the Indebtedness permitted under Section 10.01(c);
(d) Accommodation Obligations evidenced by the Senior
Subordinated Notes Guaranties and the TROL Guaranties; and
(e) unsecured Accommodation Obligations incurred by Parent
with respect to Indebtedness of the Borrowers and Parent's other Subsidiaries
permitted under the provisions of Section 10.01 (i) for borrowed money, (ii)
under Capital Leases or (iii) under Operating Leases;
(f) in addition to the Accommodation Obligations permitted by
clauses (a) through (e) above, other unsecured Accommodation Obligations of the
Borrowers and Guarantors which are Subsidiaries of Parent in an aggregate amount
not to exceed $1,000,000 at any time outstanding.
No Borrower or Guarantor shall incur any Accommodation Obligation with respect
to Indebtedness of any Subsidiary of Leasing.
10.06. Restricted Junior Payments. No Borrower shall, nor
shall any Borrower permit any of the Guarantors which is a Subsidiary of Parent
to, declare or make any Restricted Junior Payment, except:
(a) dividends and other distributions by Bearings to
Distribution;
(b) dividends or other distributions (directly or indirectly)
from Subsidiaries of the Parent to the Parent in such amounts and at such times
as are required to enable the Parent to meet (i) its obligations under the
Senior Subordinated Notes, (ii) its scheduled pre-default obligations for "Basic
Rent" and "Supplemental Rent" (each as defined in the TROL Documents), exclusive
of the "Purchase Option Price" (as defined in the TROL Documents), and (iii) its
obligations under the Supplemental Term Loan Warrant (subject to the first
proviso set forth below); and
(c) fees and other remuneration paid to Finance Affiliate by
Distribution, or to Parent by a Borrower or any Guarantor in the ordinary course
of such Borrower's or such Guarantor's business and otherwise permitted under
this Agreement
provided, however, (i) such dividends or other distributions shall not be
permitted to me made to enable the Parent to meet its obligations under the
Supplemental Term Loan Warrant at any time prior to May 31, 2001, except to the
extent that the Revolving Credit Availability shall be greater
95
than the greater of (a) $10,000,000 or (b) five percent (5.0%) of the Revolving
Credit Commitments as then in effect, in each instance, on a pro forma basis
after giving effect to such dividend or distribution and (ii) the Restricted
Junior Payments described above shall not be permitted after the occurrence and
during the continuance of an Event of Default or a Potential Event of Default or
if an Event of Default or a Potential Event of Default would result therefrom.
10.07. Conduct of Business. No Borrower or any Guarantor shall
engage in any business other than (a) the businesses engaged in by such Person
on the Effective Date and (b) any business or activities which are substantially
similar, related, incidental or complimentary thereto.
10.08. Transactions with Affiliates. No Borrower or Guarantor
shall directly or indirectly enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate of a Borrower, on
terms that are less favorable to such Borrower or such Guarantor than those that
might be obtained in an arm's length transaction at the time from Persons who
are not such an Affiliate. Nothing contained in this Section 10.08 shall
prohibit (a) any transaction expressly permitted by Section 10.06; (b) increases
in compensation and benefits for officers and employees of the Parent or its
Subsidiaries which are customary in the industry; provided that no Event of
Default or Potential Event of Default has occurred and is continuing; or (c)
payment of customary officers' and directors' indemnities.
10.09. Restriction on Fundamental Changes. No Borrower or
Guarantor which is a Subsidiary of Parent shall (a) enter into any merger or
consolidation, (b) permit any Foreign Subsidiary to enter into any merger or
consolidation, or (c) permit any of its Subsidiaries to enter into any merger or
consolidation. No Borrower or Guarantor which is a Subsidiary of Parent shall
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or substantially all of its business or Property,
whether now or hereafter acquired, except in connection with transactions
permitted under Section 10.02 or permit any of its Subsidiaries to (a)
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution) or (b)
convey, lease, sell, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or substantially all of their respective businesses
or Property, whether now or hereafter acquired, except in connection with
transactions permitted under Section 10.02.
10.10. Sales and Leasebacks. No Borrower or Guarantor shall
become liable, directly, by assumption or by Accommodation Obligation, with
respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real or personal or mixed) which it (a) sold or transferred or
is to sell or transfer to any other Person, or (b) intends to use for
substantially the same purposes as any other Property which has been or is to be
sold or transferred by it to any other Person, in either instance, in connection
with such lease.
10.11. Margin Regulations; Securities Laws. No Borrower or
Guarantor shall, nor shall any Borrower or Guarantor permit any of its
Subsidiaries to, use all or any portion of the proceeds of any credit extended
under this Agreement to purchase or carry Margin Stock.
10.12. ERISA. No Borrower or Guarantor shall:
96
(a) engage in any prohibited transaction described in Sections
406 of ERISA or 4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not been previously
obtained from the DOL;
(b) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue Code), with
respect to any Benefit Plan, whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any waived
funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan which would result in any liability of any Borrower or any ERISA
Affiliate under Title IV of ERISA;
(e) fail to make any contribution or payment to any
Multiemployer Plan which any Borrower, Guarantor or ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer Plan, or any
law pertaining thereto;
(f) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or other
payment; or
(g) amend, or permit any ERISA Affiliate to amend, a Benefit
Plan resulting in an increase in current liability for the plan year such that
any Borrower, Guarantor or ERISA Affiliate is required to provide security to
such Plan under Section 401(a)(29) of the Internal Revenue Code;
if such event results, either singly or in the aggregate, after taking into
account all other such events and any liabilities associated therewith, in an
aggregate liability of Parent and its Subsidiaries in excess of $500,000.
10.13. Issuance of Equity Securities. No Borrower or Guarantor
which is a Subsidiary of Parent shall, nor shall any Borrower or Guarantor
permit any of its Subsidiaries to, issue any equity Securities.
10.14. Organizational Documents. No Borrower or Guarantor
shall, nor shall any Borrower or Guarantor permit any of its Subsidiaries to,
amend, modify or otherwise change any of the terms or provisions in any of (a)
its Organizational Documents as in effect on the Effective Date, except
amendments (i) to effect a change of name of such Person, written notice of
which change of name such Person shall have provided the Agent within sixty (60)
days prior to the effective date of any such name change or (ii) otherwise
consented to by the Agent in writing, (b) the agreements and instruments
evidencing loans and advances comprising intercompany loans without the prior
written consent of the Agent, or (c) the TROL Documents or agreements and
instruments executed in connection with the Senior Subordinated Notes.
97
10.15. Bank Accounts. No Borrower or Guarantor shall establish
or maintain any deposit account into which collections of Receivables and
proceeds of other Collateral are deposited other than those identified as
existing on the Effective Date and disclosed on Schedule 10.15 attached hereto
(subject to the requirement of Section 9.10), unless Distribution gives the
Agent prior written notice of such establishment and delivers to the Agent an
executed Collection Account Agreement concurrently with such deposit account
being established.
10.16. Fiscal Year. Parent shall not, and shall not permit any
of its Subsidiaries to, change its fiscal year from the Fiscal Year.
10.17. Parent Covenants. The Parent shall not:
(a) merge or liquidate with or into any other Person and, if
as a result thereof and after giving effect thereto, the Parent is not the
surviving Person;
(b) repurchase or redeem any of its Capital Stock other than
as required with respect to the Permitted Equity Securities Options; or
(c) engage in any business other than that of acting as a
holding company for Distribution, Leasing, Finance Affiliate, MR&O,
Manufacturing, Aviation Sales Property Management Corp., and Aviation Sales
Company FSC, Ltd., a Barbados corporation.
10.18. Supplemental Term Loan Mandatory Prepayment. The
Borrowers shall not make the mandatory prepayment required to be made with
respect to the Supplemental Term Loan, except to the extent permitted under the
terms thereof, to wit, only if and to the extent that the Revolving Credit
Availability shall be greater than the greater of (a) $10,000,000 or (b) five
percent (5.0%) of the Revolving Credit Commitments as then in effect, in each
instance, on a pro forma basis after giving effect to such mandatory prepayment.
98
ARTICLE XI
FINANCIAL COVENANTS
The Parent covenants and agrees that so long as any Revolving
Credit Commitments are outstanding and thereafter until payment in full of all
of the Obligations (other than indemnities not yet due):
11.01. Minimum EBITDA. The Parent shall maintain EBITDA,
determined as of the last day of each Fiscal Quarter set forth below for the
period then ending described below, of at least the amount set forth below
opposite such date of determination:
Determination Date Applicable Period Minimum EBITDA
------------------ ----------------- --------------
June 30, 2000 January 1, 2000 -- June 30, 2000 $27,000,000
September 30, 2000 January 1, 2000 -- September 30, 2000 $43,000,000
December 31, 2000 January 1, 2000 -- December 31, 2000 $60,000,000
11.02. Capital Expenditures. The Parent and its Subsidiaries
shall not make Capital Expenditures in the aggregate during any period set forth
below in excess of the amount set forth below opposite such period; (in each
instance, the "Maximum Amount"):
Determination Date Applicable Period Maximum Amount
------------------ ----------------- --------------
June 30, 2000 January 1, 2000 -- June 30, 2000 $13,000,000
September 30, 2000 January 1, 2000 -- September 30, 2000 $16,500,000
December 31, 2000 January 1, 2000 -- December 31, 2000 $19,000,000
March 31, 2001 Four Fiscal Quarter period then ending $12,500,000
June 30, 2001 Four Fiscal Quarter period then ending $12,500,000
September 30, 2001 Four Fiscal Quarter period then ending $12,500,000
December 31, 2001 Four Fiscal Quarter period then ending $12,500,000
March 31, 2002 Four Fiscal Quarter period then ending $12,500,000
June 30, 2002 Four Fiscal Quarter period then ending $12,500,000
provided, however, to the extent the Parent and its Subsidiaries have not made
Capital Expenditures in the amount permitted above for any given period set
forth above, Capital Expenditures in an amount equal to 100% of the Maximum
Amount of such Capital Expenditures permitted but not made in such period may be
made in the immediately next succeeding period in addition to any amounts
permitted above for such succeeding period; provided that to the extent amounts
carried forward from one period to the next succeeding period are not expended
in such period, such surplus may not be carried forward to any other succeeding
period.
11.03. Fixed Charge Coverage Ratio. The Parent shall maintain
a Fixed Charge Coverage Ratio for the Parent and its Subsidiaries, as determined
as of the last day of each Fiscal Quarter set forth below for the period then
ending described below, of at least the level set forth below opposite such
determination date:
99
Determination Date Applicable Period Minimum Ratio
------------------ ----------------- -------------
June 30, 2000 January 1, 2000 -- June 30, 2000 1.25 to 1.00
September 30, 2000 January 1, 2000 -- September 30, 2000 1.25 to 1.00
December 31, 2000 January 1, 2000 -- December 31, 2000 1.50 to 1.00
March 31, 2001 Four Fiscal Quarter period then ending 1.75 to 1.00
June 30, 2001 Four Fiscal Quarter period then ending 1.75 to 1.00
September 30, 2001 Four Fiscal Quarter period then ending 1.75 to 1.00
December 31, 2001 Four Fiscal Quarter period then ending 1.75 to 1.00
March 31, 2002 Four Fiscal Quarter period then ending 2.00 to 1.00
June 30, 2002 Four Fiscal Quarter period then ending 2.00 to 1.00
11.04. Working Capital. Working Capital shall be $325,000,000
at June 30, 2000 and thereafter maintained, at all times during the term of this
Agreement, determined at the end of each Fiscal Quarter commencing with the
Fiscal Quarter ending June 30, 2000, in a minimum amount of $300,000,000.
11.05. Minimum Tangible Net Worth. The Parent shall maintain a
Tangible Net Worth of at least the amount set forth below for the Fiscal Quarter
ending during the period set forth below opposite such amount.
Fiscal Quarter Ending Minimum Tangible Net Worth
--------------------- --------------------------
June 30, 2000 $142,500,000
September 30, 2000 $155,000,000
December 31, 2000 $155,000,000
March 31, 2001 $160,000,000
June 30, 2001 $160,000,000
September 30, 2001 $165,000,000
December 31, 2001 $165,000,000
March 31, 2002 $180,000,000
June 30, 2002 $190,000,000
11.06. Leverage Ratio. The Parent shall maintain a ratio of
Funded Debt of the Parent to EBITDA of the Parent, determined as of the end of
each Fiscal Quarter ending on or after December 31, 2000, for the
four-fiscal-quarter period then ended, of not more than:
Four Fiscal Quarter Period Ending Maximum Ratio
--------------------------------- -------------
December 31, 2000 5.75 to 1.00
March 31, 2001 5.50 to 1.00
June 30, 2001 5.25 to 1.00
September 30, 2001 4.75 to 1.00
100
December 31, 2001 4.50 to 1.00
March 31, 2002 4.50 to 1.00
June 30, 2002 4.25 to 1.00
11.07. Ratio of Senior Debt to EBITDA. The Parent shall
maintain a Ratio of Senior Debt to EBITDA, determined as of the end of each
Fiscal Quarter of the Parent ending on or after December 31, 2000, for the
four-Fiscal-Quarter period then ended, of not more than:
Four Fiscal Quarter Period Ending Maximum Ratio
--------------------------------- -------------
December 31, 2000 3.25 to 1.00
March 31, 2001 3.00 to 1.00
June 30, 2001 2.75 to 1.00
September 30, 2001 2.50 to 1.00
December 31, 2001 2.25 to 1.00
March 31, 2002 2.25 to 1.00
June 30, 2002 2.00 to 1.00
11.08. Parent and Subsidiaries. For purposes of the covenants
set forth in this Article XI, references to Parent and its Subsidiaries shall be
deemed to mean Parent and its Subsidiaries on a consolidated basis.
101
ARTICLE XII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.01. Events of Default. Each of the following occurrences
shall constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. Any Borrower shall fail
to pay (i) when due any principal on any Loan or any Reimbursement Obligation or
(ii) any interest on any Loan, fees due under the terms of this Agreement or the
Fee Letter or other Obligations outstanding within two (2) Business Days after
the same become due in accordance with the terms of this Agreement or the Fee
Letter.
(b) Breach of Certain Covenants. Any Borrower shall fail duly
and punctually to perform or observe any agreement, covenant or obligation
binding on the Borrowers under Sections 9.01 - 9.07, 9.10, 9.11, 9.13-9.15, and
9.18, Article X or Article XI. Parent shall fail duly and punctually to perform
or observe any agreement, covenant or obligation binding on the Parent under
Section 9.16 Article X or Article XI.
(c) Breach of Representation or Warranty. Any representation
or warranty made or deemed made by any Borrower or any Guarantor to the Agent,
any Lender or any Issuing Bank herein or by any Person in any of the other Loan
Documents or in any statement or certificate at any time given by any such
Person pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made (or deemed made).
(d) Other Defaults. Parent or any Borrower shall default in
the performance of or compliance with any term contained in this Agreement
(other than as identified in clauses (a), (b) or (c) of this Section 12.01) or
any default or event of default shall occur under any of the other Loan
Documents (other than as identified in clauses (b) or (c) of this Section
12.01), and such default or event of default shall continue for thirty (30) days
after the occurrence thereof.
(e) Default as to Other Indebtedness; Operating Leases.
(i) Any Borrower or Guarantor shall fail to make any payment
when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) with respect to any Indebtedness
(other than an Obligation) of such Persons, singly or in the aggregate
equal to or exceeding $250,000; or any breach, default or event of
default shall occur, or any other condition shall exist under any
instrument, agreement or indenture pertaining to any such Indebtedness,
if the effect thereof is to cause an acceleration, mandatory redemption
or other required repurchase of such Indebtedness, or permit the
holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to
be due and payable (by acceleration or otherwise) or required to be
prepaid, redeemed or otherwise repurchased by the obligor thereon
(other than by a regularly scheduled required prepayment) prior to the
stated maturity thereof; or any breach, default or event of default on
the part of a Borrower or any Guarantor shall occur under any Operating
Lease to which such Borrower or such Guarantor is a party which breach,
default or event of default shall materially adversely
102
affect the rights of such Borrower or such Guarantor with respect to
the Property subject to any Operating Lease on which the remaining
payments exceed $1,000,000.
(ii) Any "Event of Default" as defined in the Indenture or any
TROL Document shall occur and be continuing.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against any
Borrower or any Guarantor and the petition shall not be dismissed,
stayed, bonded or discharged within thirty (30) days after commencement
of the case; or a court having jurisdiction in the premises shall enter
a decree or order for relief in respect of any Borrower or any
Guarantor in an involuntary case, under any applicable bankruptcy,
insolvency or other similar law now or hereinafter in effect; or any
other similar relief shall be granted under any applicable federal,
state, local or foreign law;
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over any
Borrower or any Guarantor or over all or a substantial part of the
Property shall be entered; or an interim receiver, trustee or other
custodian of any Borrower or any Guarantor or of all or a substantial
part of the Property shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of the
Property shall be issued and any such event shall not be stayed,
dismissed, bonded or discharged within thirty (30) days after entry,
appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. Any
Borrower or Guarantor shall have an order for relief entered with respect to it
or commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or shall consent to the entry of
an order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or shall consent to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its Property; or any Borrower or
Guarantor shall make any assignment for the benefit of creditors or shall be
unable or fail, or admit in writing its inability, to pay its debts as such
debts become due; or the shareholders or board of directors (or equivalent) of
any Borrower or any Guarantor (or any committee thereof) adopts any resolution
or otherwise authorizes any action to approve any of the foregoing.
(h) Dissolution. Any order, judgment or decree shall be
entered against any Borrower or any Guarantor decreeing its involuntary
dissolution or split up and such order shall remain undischarged and unstayed
for a period in excess of thirty (30) days; or any Borrower or any Guarantor
shall otherwise dissolve, be dissolved, or cease to exist except as specifically
permitted by this Agreement.
(i) Loan Documents; Failure of Security. At any time, for any
reason, (i) any Loan Document ceases to be in full force and effect (other than
any Hedge Agreement not required to be maintained by the terms of this
Agreement) or any Borrower or Guarantor seeks to repudiate its obligations
thereunder and the Liens intended to be created thereby against Property
103
having an aggregate Fair Market Value in excess of $100,000 are, or any Borrower
or any Guarantor seeks to render such Liens, invalid or unperfected, or (ii)
Liens in favor of the Agent for the benefit of the Holders contemplated by the
Loan Documents against Property having an aggregate Fair Market Value in excess
of $100,000 shall, at any time, for any reason, be invalidated or otherwise
cease to be in full force and effect, or such Liens shall be subordinated or
shall not have the priority contemplated by this Agreement or the Loan
Documents.
(j) Judgments and Attachments.
(i) Any money judgment (other than a money judgment covered by
insurance as to which the insurance company has acknowledged coverage),
writ or warrant of attachment, or similar process against any Borrower
or any Guarantor or any of their respective assets involving in any
case an amount in excess of $250,000 is entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of thirty
(30) days or in any event later than five (5) days prior to the date of
any proposed sale thereunder; provided, however, if any such judgment,
writ or warrant of attachment or similar process is in excess of
$1,000,000, the entry thereof shall immediately constitute an Event of
Default hereunder unless fully bonded in a manner satisfactory to the
Agent.
(ii) A federal tax Lien is filed against any Borrower or any
Guarantor or any of the Property which is not discharged of record,
bonded over or otherwise secured to the satisfaction of the Agent
within forty-five (45) days after the filing thereof or the date upon
which the Agent receives actual knowledge of the filing thereof for an
amount which equals or exceeds, when combined with such amounts claimed
to be owing by other Borrowers and Guarantors, $1,000,000.
(iii) An Environmental Lien is filed against any of the
Property with respect to Claims in an amount which equals or exceeds
$500,000.
(k) Termination Event. Any Termination Event occurs which
could reasonably be expected to subject the Borrowers or any ERISA
Affiliate to liability in excess of $500,000.
(l) Waiver Application. The plan administrator of any Benefit
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Internal Revenue Code and the Agent
believes that the substantial business hardship upon which the application for
the waiver is based could subject either the Borrowers or any ERISA Affiliate to
liability in excess of $1,000,000.
(m) Change in Control. A Change of Control shall occur.
(n) Material Adverse Effect. An event shall occur which
results in a Material Adverse Effect.
(o) Board of Directors. Two outside directors reasonably
acceptable to the Agent, in addition to those Persons acting as members of the
Board of Directors of Parent as of the Effective Date, shall not have been
elected to serve as members of the Parent's Board of Directors by September 30,
2000 or two directors in addition to ▇▇▇▇ ▇. ▇▇▇▇▇ shall not have
104
been elected to serve as members of the respective Boards of Directors of each
Borrower and other Guarantor by September 30, 2000.
An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with Section 15.07.
12.02. Rights and Remedies.
(a) Acceleration and Termination. Upon the occurrence of any
Event of Default described in Sections 12.01(f) or 12.01(g) or 12.01(h), the
Lenders' respective obligations to make Loans under the Revolving Credit
Commitments shall automatically and immediately terminate and the unpaid
principal amount of, and any and all accrued interest on, the Obligations and
all accrued fees shall automatically become immediately due and payable, without
presentment, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and of acceleration), all of which are hereby
expressly waived by the Borrowers; and upon the occurrence and during the
continuance of any other Event of Default, the Agent shall at the request, or
may with the consent, of the Requisite Lenders, by written notice to the
Borrowers, (i) declare that the Lenders' respective obligations to make Loans
under the Revolving Credit Commitments are terminated, whereupon such obligation
of each Lender to make any Loan hereunder and of each Lender or Issuing Bank to
issue or participate in any Letter of Credit not then issued shall immediately
terminate, and/or (ii) declare the unpaid principal amount of and any and all
accrued and unpaid interest on the Obligations to be, and the same shall
thereupon be, immediately due and payable, without presentment, demand, or
protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and of acceleration), all of which are hereby expressly waived by
the Borrowers.
(b) Deposit for Letters of Credit. In addition, after the
occurrence and during the continuance of an Event of Default, the Borrowers
shall, promptly upon demand by the Agent, deliver to the Agent, Cash Collateral
in such form as requested by the Agent for deposit in the Cash Collateral
Account, together with such endorsements, and execution and delivery of such
documents and instruments as the Agent may request in order to perfect or
protect the Agent's Lien with respect thereto, in an aggregate principal amount
equal to the then outstanding Letter of Credit Obligations.
(c) Rescission. If at any time after termination of the
Lenders' obligations to make Loans under the Revolving Credit Commitments and/or
acceleration of the maturity of the Loans, the Borrowers shall pay all arrears
of interest and all payments on account of principal of the Loans and
Reimbursement Obligations which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Potential Events of Default (other than nonpayment of principal of
and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 15.07, then upon
the written consent of the Requisite Lenders and written notice to the
Borrowers, the termination of Lenders' respective obligations to make Loans
under the Revolving Credit Commitments and the respective Lenders' and Issuing
Banks' obligations to participate in or issue Letters of Credit
105
and/or the aforesaid acceleration and its consequences may be rescinded and
annulled; but such action shall not affect any subsequent Event of Default or
Potential Event of Default or impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to bind the Lenders and
the Issuing Banks to a decision which may be made at the election of the
Requisite Lenders; they are not intended to benefit any Borrower and do not give
any Borrower the right to require the Lenders to rescind or annul any
termination of the aforesaid obligations of the Lenders or Issuing Banks or any
acceleration hereunder, even if the conditions set forth herein are met.
(d) Enforcement. Each Borrower acknowledges that in the event
the Borrower or any Guarantor fails to perform, observe or discharge any of
their respective obligations or liabilities under this Agreement or any other
Loan Document, any remedy of law may prove to be inadequate relief to the Agent,
the Issuing Banks and the Lenders; therefore, each Borrower agrees that the
Agent, the Issuing Banks and the Lenders shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
12.03. Post-Default Withdrawals from the Concentration Account
and Cash Collateral Account. Notwithstanding any other provision of this
Agreement, from and after acceleration of the Obligations as described in
Section 12.02(a), no Borrower or other Person or entity claiming on behalf of or
through a Borrower shall have any right to withdraw any of the funds held in the
Concentration Account until the Obligations have been paid in full in cash. The
Agent may, at any such time, sell or cause to be sold any Cash Equivalents being
held by the Agent in the Concentration Account or as Cash Collateral at any
broker's board or at public or private sale, in one or more sales or lots, at
such price as the Agent may deem best, without assumption of any credit risk,
and the purchaser of any or all such Cash Equivalents so sold shall thereafter
own the same, absolutely free from any claim, encumbrance or right of any kind
whatsoever. The Agent or any Holder may, in its own name or in the name of a
designee or nominee, buy such Cash Equivalents at any public sale and, if
permitted by applicable law, buy such Cash Equivalents at any private sale. The
Agent shall apply the proceeds of any such sale, net of any reasonable expenses
incurred in connection therewith, and any other funds deposited in the
Concentration Account or Cash Collateral Account to the payment of the
Obligations in accordance with Section 4.02(b)(ii), other than amounts which are
being held as Cash Collateral for Reimbursement Obligations, which shall be
applied to such Reimbursement Obligations without regard to Section 4.02(b)(ii).
Each Borrower agrees that any sale of Cash Equivalents conducted in conformity
with reasonable commercial practices of banks, commercial finance companies,
insurance companies or other financial institutions disposing of property
similar to such Cash Equivalents shall be deemed to be commercially reasonable
and any requirements of reasonable notice shall be met if such notice is given
by the Agent within a commercially reasonable time prior to such disposition,
the time of delivery of which notice the parties hereto agree shall in no event
be required to be greater than five (5) Business Days before the date of the
intended sale or disposition. Any other requirement of notice, demand or
advertisement for sale is waived to the extent permitted by law. The Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
106
ARTICLE XIII
THE AGENT
13.01. Appointment.
(a) Each Lender and each Issuing Bank hereby designates and
appoints Citicorp as the Agent of such Lender or such Issuing Bank under this
Agreement, and each Lender and each Issuing Bank hereby irrevocably authorizes
the Agent to take such action on its behalf under the provisions of this
Agreement and the Loan Documents and to exercise such powers as are set forth
herein or therein together with such other powers as are reasonably incidental
thereto. The Agent agrees to act as such on the express conditions contained in
this Article XIII.
(b) The provisions of this Article XIII are solely for the
benefit of the Agent, the Lenders and Issuing Banks, and no Borrower or any
Affiliate of any Borrower shall have any right to rely on or enforce any of the
provisions hereof (other than as expressly set forth in Section 13.07). In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Lenders and the Issuing Banks and does not assume and
shall not be deemed to have assumed any obligation or relationship of agency,
trustee or fiduciary with or for any Borrower or any Affiliate of a Borrower and
the agency, trust and fiduciary relationship of the Agent hereunder with the
Lenders and Issuing Banks shall be strictly limited in scope to the specific
provisions of this Agreement. The Agent may perform any of its duties hereunder,
or under the other Loan Documents, by or through its agents or employees.
13.02. Nature of Duties. The Agent shall not have any duties
or responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Agent shall be mechanical and administrative
in nature. The Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Holder. Nothing in this Agreement or any of the
other Loan Documents, expressed or implied, is intended to or shall be construed
to impose upon the Agent any obligations in respect of this Agreement or any of
the Loan Documents except as expressly set forth herein or therein. Each Lender
and each Issuing Bank shall make its own independent investigation of the
financial condition and affairs of the Borrowers and their Affiliates in
connection with the making and the continuance of the Loans hereunder and with
the issuance of the Letters of Credit and shall make its own appraisal of the
creditworthiness of each Borrower, each Guarantor and each of their Affiliates
initially and on a continuing basis, and the Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Holder
with any credit or other information with respect thereto (except for reports
required to be delivered by the Agent under the terms of this Agreement). If the
Agent seeks the consent or approval of the Lenders to the taking or refraining
from taking of any action hereunder, the Agent shall send notice thereof to each
Lender. The Agent shall promptly notify each Lender at any time that the Lenders
so required hereunder have instructed the Agent to act or refrain from acting
pursuant hereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes or any
amount payable under any provision of Article IV or Article V when due) or the
other Loan Documents, the Agent shall not be required to exercise any discretion
or take any action. Notwithstanding the foregoing, the Agent shall be required
to act or refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Requisite Lenders, or,
where required by the express terms of this Agreement, a different or greater
107
proportion of the Lenders, and such instructions shall be binding upon all
Lenders, Issuing Banks and Holders of Notes; provided, however, the Agent shall
not be required to take any action which (i) the Agent reasonably believes will
expose it to personal liability unless the Agent receives an indemnification
satisfactory to it from the Lenders with respect to such action or (ii) is
contrary to this Agreement, the other Loan Documents or applicable law.
13.03. Rights, Exculpation, Etc.
(a) Liabilities; Responsibilities. None of the Agent, any
Affiliate of the Agent, or any of their respective officers, directors,
employees or agents shall be liable to any Holder for any action taken or
omitted by them hereunder or under any of the Loan Documents, or in connection
therewith, except that no Person shall be relieved of any liability imposed by
law for gross negligence or willful misconduct. The Agent shall not be liable
for any apportionment or distribution of payments made by it in good faith
pursuant to Section 4.02(b), and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Holder to whom payment was due, but not made, shall be to recover from other
Holders any payment in excess of the amount to which they are determined to have
been entitled. The Agent shall not be responsible to any Holder for any
recitals, statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, legality, enforceability, collectibility,
or sufficiency of this Agreement or any of the other Loan Documents or the
transactions contemplated thereby, or for the financial condition of any
Borrower or any Affiliate of a Borrower. The Agent shall not be required to make
any inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any of the Loan Documents, the
agreements and instruments executed and delivered in connection with any
intercompany Indebtedness, or the financial condition of any Borrower or any
Affiliate of any Borrower, or the existence or possible existence of any
Potential Event of Default or Event of Default.
(b) Right to Request Instructions. The Agent may at any time
request instructions from the Lenders with respect to any actions or approvals
which by the terms of any of the Loan Documents the Agent is permitted or
required to take or to grant, and the Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from those Lenders from whom the Agent is required to
obtain such instructions for the pertinent matter in accordance with the Loan
Documents. Without limiting the generality of the foregoing, no Holder shall
have any right of action whatsoever against the Agent as a result of the Agent
acting or refraining from acting under the Loan Documents in accordance with the
instructions of the Requisite Lenders or, where required by the express terms of
this Agreement, a different or greater proportion of the Lenders.
13.04. Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for the
Borrowers and Guarantors), independent public accountants and other experts
selected by it.
108
13.05. Indemnification. To the extent that the Agent is
required to be reimbursed and indemnified by the Borrowers but is not reimbursed
and indemnified by the Borrowers and the Borrowers are not otherwise relieved or
excused from such obligation, the Lenders will reimburse and indemnify the Agent
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against it in any way relating to or arising out of the Loan Documents or any
action taken or omitted by the Agent under the Loan Documents, in proportion to
each Lender's Pro Rata Share. The obligations of the Lenders under this Section
13.05 shall survive the payment in full of the Loans, the Reimbursement
Obligations and all other Obligations and the termination of this Agreement.
13.06. Agent Individually. With respect to its Pro Rata Share
of the Revolving Credit Commitments hereunder, if any, and the Loans made by it,
if any, the Agent shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "Lenders" and "Requisite
Lenders" or any similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity, if applicable, as a
Lender or one of the Requisite Lenders. The Agent and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking, trust
or other business with any Borrower or any Affiliate of a Borrower as if it were
not acting as the Agent pursuant hereto.
13.07. Successor Agents.
(a) Resignation. The Agent may resign from the performance of
all its functions and duties hereunder at any time by giving at least thirty
(30) Business Days' prior written notice to Distribution and the Lenders. Such
resignation shall take effect upon the acceptance by a successor Agent of
appointment pursuant to this Section 13.07.
(b) Appointment by Agent. Upon any such notice of resignation,
the Agent shall have the right to appoint a successor Agent selected from among
the Lenders, which appointment shall be subject to (i) the prior written
approval of Distribution (which may not be unreasonably withheld or delayed, and
shall not be required upon the occurrence and during the continuance of an Event
of Default) and the Requisite Lenders and (ii) the concurrence of the Lender
proposed for such appointment.
(c) Rights of the Successor and Retiring Agents. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article XIII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Agent under this
Agreement.
13.08. Relations Among Lenders. Each Lender and each Issuing
Bank agrees (except as provided in Section 15.05) that it will not take any
legal action, nor institute any actions or proceedings, against any Borrower,
Guarantor, or any other obligor hereunder or with respect to any Collateral,
without the prior written consent of the Requisite Lenders. Without limiting the
generality
109
of the foregoing, no Lender may accelerate or otherwise enforce its portion of
the Obligations, or unilaterally terminate its Revolving Credit Commitments,
except in accordance with Section 12.02(a).
13.09. Concerning the Collateral and the Loan Documents.
(a) Protective Advances. The Agent may from time to time, (i)
before or after the occurrence of an Event of Default, make such disbursements
and advances pursuant to the Loan Documents which the Agent, in its sole
discretion, deems necessary or desirable to preserve or protect the Collateral
or any portion thereof and (ii) after the occurrence of an Event of Default
which is continuing unwaived, to enhance the likelihood or maximize the amount
of repayment of the Loans and other Obligations ("Protective Advances");
provided, however, that Agent shall obtain the prior written consent of the
Requisite Lenders with respect to the making of any Protective Advance which,
when combined with other Protective Advances not then reimbursed by the
Borrowers, would exceed $3,000,000. The Agent shall notify Distribution and each
Lender in writing of each such Protective Advance, which notice shall include a
description of the purpose of such Protective Advance. The Borrowers jointly and
severally agree to pay the Agent, upon demand, the principal amount of all
outstanding Protective Advances, together with interest thereon at the rate from
time to time applicable to Base Rate Loans pursuant to Section 5.01 from the
date of such Protective Advance until the outstanding principal balance thereof
is paid in full. If the Borrowers fail to make payment in respect of any
Protective Advance within one (1) Business Day after the date Distribution
receives written demand therefor from the Agent, the Agent shall promptly notify
each Lender and each Lender agrees that it shall thereupon make available to the
Agent, in Dollars in immediately available funds, the amount equal to such
Lender's Pro Rata Share of such Protective Advance; provided, however, that no
Lender shall be required to make any such payment in excess of its then unfunded
Revolving Credit Commitment. If such funds are not made available to the Agent
by any Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together with
interest thereon at the Federal Funds Rate for each day during the period
commencing on the date of such demand and ending on the date such amount is
received. The failure of any Lender to make available to the Agent its Pro Rata
Share of any such Protective Advance shall neither relieve any other Lender of
its obligation hereunder to make available to the Agent such other Lender's Pro
Rata Share of such Protective Advance on the date such payment is to be made nor
increase the obligation of any other Lender to make such payment to the Agent.
All outstanding principal of, and interest on, Protective Advances shall
constitute Obligations secured by the Collateral until paid in full by the
Borrowers.
(b) Authority. Each Lender and each Issuing Bank authorizes
and directs the Agent to enter into the Loan Documents relating to the
Collateral for the benefit of the Lenders and the Issuing Banks. Each Lender and
each Issuing Bank agrees that any action taken by the Agent or the Requisite
Lenders (or, where required by the express terms of this Agreement, a different
or greater proportion of the Lenders) in accordance with the provisions of this
Agreement or the other Loan Documents, and the exercise by the Agent or the
Requisite Lenders (or, where so required, such greater or different proportion
of the Lenders) of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders and Issuing Banks. Without limiting the
110
generality of the foregoing, the Agent shall have the sole and exclusive right
and authority to (i) act as the disbursing and collecting agent for the Lenders
and the Issuing Banks with respect to all payments and collections arising in
connection with this Agreement and the Loan Documents relating to the
Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by any Borrower
or Guarantor a party thereto; (iii) act as collateral agent for the Lenders and
the Issuing Banks for purposes of the perfection of all security interests and
Liens created by such agreements and all other purposes stated therein;
provided, however, the Agent hereby appoints, authorizes and directs the Lenders
and the Issuing Banks to act as collateral sub-agent for the Agent, the Lenders
and the Issuing Banks for purposes of the perfection of all security interests
and Liens with respect to the Property at any time in the possession of such
Lender or such Issuing Bank, including, without limitation, deposit accounts
maintained with, and cash and Cash Equivalents held by, such Lender or such
Issuing Bank; (iv) manage, supervise and otherwise deal with the Collateral; (v)
take such action as is necessary or desirable to maintain the perfection and
priority of the security interests and liens created or purported to be created
by the Loan Documents; and (vi) except as may be otherwise specifically
restricted by the terms of this Agreement or any other Loan Document, exercise
all remedies given to the Agent, the Lenders or the Issuing Banks with respect
to the Collateral under the Loan Documents relating thereto, applicable law or
otherwise.
(c) Release of Collateral.
(i) Each Lender and each Issuing Bank hereby directs, in
accordance with the terms of this Agreement, the Agent to release any
Lien held by the Agent for the benefit of the Holders:
(A) against all of the Collateral, upon final and indefeasible
payment in full of the Obligations and termination of this Agreement;
(B) against any part of the Collateral sold or disposed of by
a Borrower or any of its Subsidiaries, if such sale or disposition is
permitted by Section 10.02, as certified to the Agent by Distribution
in an Officer's Certificate, or is otherwise consented to by the
Requisite Lenders; and/or
(C) against any part of the Collateral consisting of a
promissory note, upon final and indefeasible payment in full of the
Indebtedness evidenced thereby.
(ii) Each Lender and each Issuing Bank hereby authorizes the
Agent, on behalf of such Lender and Issuing Bank, to release any
Borrower or Guarantor from its obligations as a Borrower or Guarantor
and the Liens granted by such Borrower or Guarantor to secure the
Obligations and its guaranty obligations upon such Borrower's or
Guarantor's ceasing to be a Subsidiary of Parent as a result of a sale
or transfer permitted by Section 10.02(b).
(iii) Each Lender and each Issuing Bank hereby directs the
Agent to execute and deliver or file such termination and partial
release statements and do such other things as are necessary to release
Guarantors and/or Liens to be released pursuant to this Section
13.09(c) promptly upon the effectiveness of any such release.
111
ARTICLE XIV
YIELD PROTECTION
14.01. Taxes.
(a) Payment of Taxes. Any and all payments by the Borrowers,
or any of them, hereunder or under any Note or other document evidencing any
Obligations shall be made, in accordance with Section 4.02, free and clear of
and without reduction for any and all present or future taxes, levies, imposts,
deductions, charges, withholdings, and all stamp or documentary taxes, excise
taxes, ad valorem taxes and other taxes imposed on the value of the Property,
charges or levies which arise from the execution, delivery or registration, or
from payment or performance under, or otherwise with respect to, any of the Loan
Documents or the Revolving Credit Commitments and all other liabilities with
respect thereto excluding, in the case of each Lender, each Issuing Bank and the
Agent, taxes imposed on or measured by net income or overall gross receipts and
capital and franchise taxes imposed on it by (i) the United States, (ii) the
Governmental Authority of the jurisdiction in which such Lender's Domestic
Lending Office is located or any political subdivision thereof or (iii) the
Governmental Authority in which such Person is organized, managed and controlled
or any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges and withholdings being hereinafter referred to as
"Taxes"). If any Borrower shall be required by law to withhold or deduct any
Taxes from or in respect of any sum payable hereunder or under any such Note or
document to any Lender, any Issuing Bank or the Agent, (x) the sum payable to
such Lender, Issuing Bank, or the Agent shall be increased as may be necessary
so that after making all required withholding or deductions (including
withholding or deductions applicable to additional sums payable under this
Section 14.01) such Lender, such Issuing Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
withholding or deductions been made, (y) such Borrower shall make such
withholding or deductions, and (z) such Borrower shall pay the full amount
withheld or deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) Indemnification. The Borrowers will, jointly and
severally, indemnify each Lender, each Issuing Bank and the Agent against, and
reimburse each on demand for, the full amount of all Taxes (including, without
limitation, any Taxes imposed by any Governmental Authority on amounts payable
under this Section 14.01 and any additional income or franchise taxes resulting
therefrom) incurred or paid by such Lender, such Issuing Bank or the Agent (as
the case may be) or any of their respective Affiliates and any liability
(including penalties, interest, and out-of-pocket expenses paid to third
parties) arising therefrom or with respect thereto, whether or not such Taxes
were lawfully payable. A certificate as to any additional amount payable to any
Person under this Section 14.01 submitted by it to Distribution shall, absent
manifest error, be final, conclusive and binding upon all parties hereto. Each
Lender and each Issuing Bank agrees, within a reasonable time after receiving a
written request from a Borrower, to provide such Borrower and the Agent with
such certificates as are reasonably required, and take such other actions as are
reasonably necessary to claim such exemptions as such Lender or such Issuing
Bank may be entitled to claim in respect of all or a portion of any Taxes which
are otherwise required to be paid or deducted or withheld pursuant to this
Section 14.01 in respect of any payments under this Agreement or under the
Notes.
112
(c) Receipts. Within thirty (30) days after the date of any
payment of Taxes by any Borrower, it will furnish to the Agent, at its address
referred to in Section 15.08, the original or a certified copy of a receipt
evidencing payment thereof.
(d) Foreign Bank Certifications.
(i) Each Lender that is not created or organized under the
laws of the United States or a political subdivision thereof, if not
delivered to Distribution and the Agent theretofore, shall deliver to
Distribution and the Agent on the Effective Date or the date on which
such Lender becomes a Lender pursuant to Section 15.01 hereof a true
and accurate certificate executed in duplicate by a duly authorized
officer of such Lender to the effect that such Lender is eligible to
receive payments hereunder and under the Notes without deduction or
withholding of United States federal income tax (A) under the
provisions of an applicable tax treaty concluded by the United States
(in which case the certificate shall be accompanied by two duly
completed and executed copies of IRS Form W-8BEN (or any successor or
substitute form or forms)), (B) under Section 1442 of the Internal
Revenue Code (in which case the certificate shall be accompanied by two
duly completed copies of IRS Form W-8ECI (or any successor or
substitute form or forms)), or (C) under Section 871(h) or 881(c) of
the Internal Revenue Code in the case of any Lender that is claiming an
exemption from the withholding of United States federal income tax with
respect to "portfolio interest" (in which case, the certificate shall
be accompanied by two accurate and complete original signed copies of
IRS Form W-8BEN (or any successor or substitute form or forms)) and
such certificate shall include representations that the Lender is not
(1) a "bank" for purposes of Section 881(c) of the Internal Revenue
Code, (2) a ten percent shareholder of any Borrower, within the meaning
of Section 871(h)(3) of the Internal Revenue Code or (3) a controlled
foreign corporation related to any Borrower within the meaning of
Section 864(d)(4) of the Internal Revenue Code.
(ii) Each Lender further agrees to deliver to Distribution and
the Agent, from time to time, a true and accurate certificate executed
in duplicate by a duly authorized officer of such Lender before or
promptly upon the occurrence of any event requiring a change in the
most recent certificate previously delivered by it to Distribution and
the Agent pursuant to this Section 14.01(d). Each certificate required
to be delivered pursuant to this Section 4.01(d)(ii) shall certify as
to one of the following:
(A) that such Lender can continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax;
(B) that such Lender cannot continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax as specified therein but does not
require additional payments pursuant to Section 14.01(a) because it is
entitled to recover the full amount of any such deduction or
withholding from a source other than the Borrowers; or
(C) that such Lender is no longer capable of receiving
payments of interest hereunder and under the Notes without deduction or
withholding of United States federal
113
income tax as specified therein and that it is not capable of
recovering the full amount of the same from a source other than the
Borrowers.
Each Lender agrees to deliver to Distribution and the Agent further duly
completed copies of the above-mentioned IRS forms on or before the earlier of
(x) the date that any such form expires or becomes obsolete or otherwise is
required to be resubmitted as a condition to obtaining an exemption from
withholding from United States federal income tax and (y) fifteen (15) days
after the occurrence of any event requiring a change in the most recent form
previously delivered by such Lender to Distribution and Agent, unless any change
in treaty, law, regulation, or official interpretation thereof which would
render such form inapplicable or which would prevent the Lender from duly
completing and delivering such form has occurred prior to the date on which any
such delivery would otherwise be required and the Lender promptly advises
Distribution that it is not capable of receiving payments hereunder and under
the Notes without any deduction or withholding of United States federal income
tax. Each Lender further agrees to promptly furnish to Distribution and the
agent such additional documents as may be reasonably required by the Borrowers
or Agent to establish any exemption from or reduction of any Taxes required to
be deducted or withheld and which may be obtained without undue expense to such
Lender.
14.02. Increased Capital. If after the date hereof any Lender
or Issuing Bank determines that (i) the adoption or implementation of or any
change in or in the interpretation or administration of any law or regulation or
any guideline or request from any central bank or other Governmental Authority
or quasi-governmental authority exercising jurisdiction, power or control over
any Lender, Issuing Bank or banks or financial institutions generally (whether
or not having the force of law), compliance with which affects or would affect
the amount of capital required or expected to be maintained by such Lender or
Issuing Bank or any corporation controlling such Lender or Issuing Bank and (ii)
the amount of such capital is increased by or based upon (A) the making or
maintenance by any Lender of its participation in or obligation to participate
in Letters of Credit or (B) the issuance or maintenance by any Issuing Bank of,
or the existence of any Issuing Bank's obligation to issue, Letters of Credit,
then, in any such case, upon written demand by such Lender or Issuing Bank (with
a copy of such demand to the Agent), the Borrowers shall immediately pay to the
Agent for the account of such Lender or Issuing Bank, from time to time as
specified by such Lender or Issuing Bank, additional amounts sufficient to
compensate such Lender or Issuing Bank or such corporation therefor. Such demand
shall be accompanied by a statement as to the amount of such compensation and
include a brief summary of the basis for such demand. Such statement shall be
conclusive and binding for all purposes, absent manifest error.
14.03. Changes; Legal Restrictions. If after the date hereof
any Lender or Issuing Bank determines that the adoption or implementation of or
any change in or in the interpretation or administration of any law or
regulation or any guideline or request from any central bank or other
Governmental Authority or quasi-governmental authority exercising jurisdiction,
power or control over any Lender, Issuing Bank or over banks or financial
institutions generally (whether or not having the force of law), compliance with
which:
(a) does or will subject a Lender or an Issuing Bank to
charges (other than taxes) of any kind which such Lender or Issuing Bank
reasonably determines to be applicable to the Revolving Credit Commitments of
the Lenders and/or the Issuing Banks to issue and/or participate in Letters of
Credit or change the basis of taxation of payments to that Lender or
114
Issuing Bank of fees, interest, or any other amount payable hereunder with
respect to Letters of Credit; or
(b) does or will impose, modify, or hold applicable, in the
determination of a Lender or an Issuing Bank, any reserve, special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held by,
or deposits or other liabilities (including those pertaining to Letters of
Credit) in or for the account of, advances or loans by, commitments made, or
other credit extended by, or any other acquisition of funds by, a Lender or an
Issuing Bank;
and the result of any of the foregoing is to increase the cost to that Lender or
Issuing Bank of making, renewing or maintaining its Revolving Credit Commitments
with respect to, or issuing or participating in, the Letters of Credit or to
reduce any amount receivable thereunder; then, in any such case, upon written
demand by such Lender or Issuing Bank (with a copy of such demand to the Agent),
the Borrowers shall immediately pay to the Agent for the account of such Lender
or Issuing Bank, from time to time as specified by such Lender or Issuing Bank,
such amount or amounts as may be necessary to compensate such Lender or Issuing
Bank for any such additional cost incurred or reduced amount received. Such
demand shall be accompanied by a statement as to the amount of such compensation
and include a brief summary of the basis for such demand. Such statement shall
be conclusive and binding for all purposes, absent manifest error.
14.04. Limitation on Additional Amounts Payable by the
Borrowers. Notwithstanding the provisions of Section 14.01(a), the Borrowers
shall not be required to pay any additional amounts thereunder to a Lender if
(a) the obligation to pay such additional amounts would not have arisen but for
a failure by the Lender to comply with the requirements described in Section
14.01 or (b) the Lender shall not have furnished Distribution with such forms or
shall not have taken such other action as reasonably may be available to it
under applicable tax laws and any applicable tax treaty to obtain an exemption
from, or reduction (to the lowest applicable rate) of withholding of such United
States federal income tax; provided, however, the Borrowers' obligation to pay
such additional amounts shall be reinstated upon receipt of such forms or
evidence that action with respect to obtaining such exemption or reduction has
been taken.
14.05. Change in Lending Office. Any Lender claiming any
additional amounts payable pursuant to Section 14.01 shall use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the Domestic Lending Office designated by it for
purposes of this Agreement to a Domestic Lending Office in another jurisdiction,
if the making of such a change would avoid the need for, or reduce the amount
of, any such additional amounts which may thereafter accrue and would not, in
the judgment of such Lender, be otherwise disadvantageous to such Lender.
14.06. Illegality.
(a) If at any time any Lender determines (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties) that the making or continuation of any Eurodollar Rate Loan has become
unlawful or impermissible by compliance by that Lender with any law,
governmental rule, regulation or order of any Governmental
115
Authority (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful or would result in costs or penalties), then,
and in any such event, such Lender may give notice of that determination, in
writing, to Distribution and the Agent, and the Agent shall promptly transmit
the notice to each other Lender.
(b) When notice is given by a Lender under Section 14.06(a),
(i) the Borrowers' right to request from such Lender and such Lender's
obligation, if any, to make Eurodollar Rate Loans shall be immediately
suspended, and such Lender shall make a Base Rate Loan as part of any requested
Borrowing of Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loan
or Loans are then outstanding, the Borrowers shall immediately, or if permitted
by applicable law, no later than the date permitted thereby, upon at least one
(1) Business Day's prior written notice to the Agent and the affected Lender,
convert each such Loan into a Base Rate Loan.
(c) If at any time after a Lender gives notice under Section
14.06(a) such Lender determines that it may lawfully make Eurodollar Rate Loans,
such Lender shall promptly give notice of that determination, in writing, to
Distribution and the Agent, and the Agent shall promptly transmit the notice to
each other Lender. The Borrowers' right to request, and such Lender's
obligation, if any, to make, Eurodollar Rate Loans shall thereupon be restored.
14.07. Compensation. In addition to all amounts required to be
paid by the Borrowers pursuant to Section 5.01, the Borrowers shall compensate
each Lender, upon demand, for all losses, expenses and liabilities (including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Eurodollar Rate Loans to the Borrower but excluding any
loss of the then applicable Eurodollar Rate Margin on the relevant Loans) which
that Lender may sustain (a) if for any reason a Borrowing, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion/Continuation given
by Distribution or in a telephonic request by it for borrowing or
conversion/continuation or a successive Eurodollar Interest Period does not
commence after notice therefor is given pursuant to Section 5.01(e), including,
without limitation, pursuant to Section 5.03(d), (b) if for any reason any
Eurodollar Rate Loan is prepaid or converted (including, without limitation,
mandatorily pursuant to Section 4.01 or Section 14.06(b)) on a date which is not
the last day of the applicable Eurodollar Interest Period, (c) as a consequence
of a required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a
result of any of the events indicated in Section 5.03(d) or Section 14.06(b), or
(d) as a consequence of any failure by the Borrowers to repay Eurodollar Rate
Loans when required by the terms of this Agreement. The Lender making demand for
such compensation shall deliver to Distribution concurrently with such demand a
written statement in reasonable detail as to such losses, expenses and
liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender, absent manifest error.
116
ARTICLE XV
MISCELLANEOUS
15.01. Assignments and Participations.
(a) Assignments. No assignments or participations of any
Lender's rights or obligations under this Agreement shall be made except in
accordance with this Section 15.01. Each Lender may assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all of its rights and obligations with respect to the Loans
and the Letters of Credit) in accordance with the provisions of this Section
15.01.
(b) Limitations on Assignments. Each assignment shall be
subject to the following conditions: (i) each such assignment may be on a
non-pro-rata basis, but shall be of a constant, and not a varying, ratable
percentage of all of the assigning Lender's rights and obligations under this
Agreement which are subject to such assignment and, in the case of a partial
assignment, shall be in a minimum principal amount of $5,000,000, (ii) each such
assignment shall be to an Eligible Assignee, and (iii) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance. Upon such execution,
delivery, acceptance and recording in the Register, from and after the effective
date specified in each Assignment and Acceptance and agreed to by the Agent, (A)
the assignee thereunder shall, in addition to any rights and obligations
hereunder held by it immediately prior to such effective date, if any, have the
rights and obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and shall, to the fullest extent permitted by law,
have the same rights and benefits hereunder as if it were an original Lender
hereunder, (B) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of such assigning Lender's rights and obligations under
this Agreement, the assigning Lender shall cease to be a party hereto), and (C)
upon the written request of the assignee thereunder, the Borrowers shall execute
and deliver to such assignee a Note evidencing its obligations to such assignee
and the adjusted obligations to such assignor with respect to the assigned
Loans.
(c) The Register. The Agent shall maintain at its address
referred to in Section 15.08 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitment under each Loan of, and
principal amount of the Loans under each facility owing to, each Lender from
time to time and whether such Lender is an original Lender or the assignee of
another Lender pursuant to an Assignment and Acceptance. The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers and each Guarantor, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Fee. Upon its receipt of an Assignment and Acceptance
executed by the assigning Lender and an Eligible Assignee and a processing and
recordation fee of $3,500
117
(payable by the assigning Lender or the assignee, as shall be agreed between
them), the Agent shall, if such Assignment and Acceptance has been completed and
is in compliance with this Agreement and in substantially the form of Exhibit A,
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to Distribution and
the other Lenders.
(e) Participations. Each Lender may sell participations to one
or more other financial institutions in or to all or a portion of its rights and
obligations under and in respect of any and all facilities under this Agreement
(including, without limitation, all or a portion of any or all of its Revolving
Credit Commitments hereunder and the Loans owing to it and its undivided
interest in the Letters of Credit); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Revolving
Credit Commitments hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the Borrowers, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (iv) such participant's
rights to agree or to restrict such Lender's ability to agree to the
modification, waiver or release of any of the terms of the Loan Documents or to
the release of any Collateral covered by the Loan Documents, to consent to any
action or failure to act by any party to any of the Loan Documents or any of
their respective Affiliates, or to exercise or refrain from exercising any
powers or rights which any Lender may have under or in respect of the Loan
Documents or any Collateral, shall be limited to the right to consent to (A)
increase in the Commitment of the Lender from whom such participant purchased a
participation, (B) reduction of the principal of, or rate or amount of interest
on the Loans(s) subject to such participation (other than by the payment or
prepayment thereof), (C) postponement of any date fixed for any payment of
principal of, or interest on, the Loan(s) subject to such participation and (D)
release of any Guarantor or all or a substantial portion of the Collateral
except as provided in Section 13.09(c).
(f) Information Regarding the Borrowers. Any Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 15.01, disclose to the assignee or
participant or proposed assignee or participant, any information relating to
Parent, any Borrower, or any other Subsidiaries of Parent furnished to such
Lender by the Agent or by or on behalf of such Person(s); provided that, prior
to any such disclosure, such assignee or participant, or proposed assignee or
participant, shall agree to preserve in accordance with Section 15.20 the
confidentiality of any confidential information described therein.
(g) Payment to Participants. Anything in this Agreement to the
contrary notwithstanding, in the case of any participation, all amounts payable
by the Borrowers or Guarantors under the Loan Documents shall be calculated and
made in the manner and to the parties required hereby as if no such
participation had been sold.
(h) Lenders' Creation of Security Interests. Notwithstanding
any other provision set forth in this Agreement, any Lender may at any time
create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, Obligations owing to it and any Notes
held by it) in favor of any Federal Reserve bank in accordance with Regulation A
of the Federal Reserve Board.
118
(i) Assignments by Agent. If Agent ceases to be a Lender under
this Agreement by virtue of any assignment made pursuant to this Section 15.01,
then, as of the effective date of such cessation, Citibank's obligations to
issue Letters of Credit pursuant to Section 3.01 shall terminate and Citibank
shall be an Issuing Bank hereunder only with respect to outstanding Letters of
Credit issued prior to such date.
15.02. Expenses.
(a) Generally. The Borrowers, jointly and severally, agree
upon demand to pay, or reimburse the Agent for, all of the Agent's reasonable
internal and external audit, legal, appraisal, valuation, filing, document
duplication and reproduction and investigation expenses and for all other
out-of-pocket costs and expenses of every type and nature (including, without
limitation, the reasonable fees, expenses and disbursements of Sidley & Austin,
local legal counsel, auditors, accountants, appraisers, printers, insurance and
environmental advisers, and other consultants and agents) incurred by the Agent
in connection with (i) the Agent's review and investigation of each Borrower and
its Affiliates and the Collateral in connection with the preparation,
negotiation, and execution of the Loan Documents and the Agent's periodic
reviews and audits of the Borrowers and Guarantors; (ii) the preparation,
negotiation, execution and interpretation of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article VI) and the other Loan Documents and the making of the
Loans hereunder; (iii) the creation, perfection or protection of the Liens under
the Loan Documents (including, without limitation, any reasonable fees and
expenses for local counsel in various jurisdictions); (iv) the ongoing
administration of this Agreement, the other Loan Documents and the Loans,
including consultation with attorneys in connection therewith and with respect
to the Agent's rights and responsibilities under this Agreement and the other
Loan Documents; (v) the protection, collection or enforcement of any of the
Obligations or the enforcement of any of the Loan Documents; (vi) the
commencement, defense or intervention in any court proceeding relating in any
way to the Obligations, the Property, any Borrower, any Guarantor, any of
Parent's other Subsidiaries, this Agreement, any of the other Loan Documents or
other Contractual Obligations of such Persons; (vii) the response to, and
preparation for, any subpoena or request for document production with which the
Agent is served or deposition or other proceeding in which the Agent is called
to testify, in each case, relating in any way to the Obligations, the Property,
any Borrower, any Guarantor, any of Parent's other Subsidiaries, this Agreement,
any of the other Loan Documents or other Contractual Obligations of such
Persons; and (viii) any amendments, consents, waivers, assignments,
restatements, or supplements to any of the Loan Documents and the preparation,
negotiation, and execution of the same.
(b) After Default. The Borrowers, jointly and severally,
further agree to pay or reimburse the Agent, the Issuing Banks and the Lenders
upon demand for all out-of-pocket costs and expenses, including, without
limitation, reasonable attorneys' fees (including allocated costs of internal
counsel and costs of settlement) incurred by the Agent, any Issuing Bank or any
Lender after the occurrence of an Event of Default (i) in enforcing any Loan
Document or Obligation or any security therefor or exercising or enforcing any
other right or remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or in any insolvency
or bankruptcy proceeding; (iii) in commencing, defending or intervening in any
litigation or in filing a petition, complaint, answer, motion or other pleadings
in any legal
119
proceeding relating to the Obligations, the Property, any Borrower, any
Guarantor, or any of Parent's other Subsidiaries and related to or arising out
of the transactions contemplated hereby or by any of the other Loan Documents;
and (iv) in taking any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise) described in clauses (i) through (iii) above.
15.03. Indemnity. The Borrowers, jointly and severally,
further agree (a) to indemnify and hold harmless the Agent and each and all of
the Lenders and Issuing Banks and each of their respective officers, directors,
employees, attorneys and agents (including, without limitation, those retained
in connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article VI) (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses (other than loss of
profits), damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (excluding any taxes (other
than specifically provided for in Article XIV) and including, without
limitation, the fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of (i) this Agreement or the other Loan Documents, or any act,
event or transaction related or attendant thereto or to the making of the Loans
and the issuance of and participation in Letters of Credit hereunder, the
management of such Loans or Letters of Credit, the use or intended use of the
proceeds of the Loans or Letters of Credit hereunder, or any of the other
transactions contemplated in or by any of the Loan Documents, or (ii) any
Liabilities and Costs relating to any violation by any Borrower or Guarantor, or
their respective predecessors-in-interest, of any Environmental, Health or
Safety Requirements of Law, the past, present or future operations of any
Borrower or Guarantor, or any of their respective predecessors-in-interest, or,
the past, present or future environmental, health or safety condition of any
respective past, present or future Property, the presence of asbestos-containing
materials at any respective past, present or future Property, or the Release or
threatened Release of any Contaminant into the environment by any Borrower or
Guarantor, or their respective predecessors-in-interest, or the Release or
threatened Release of any Contaminant into the environment from or at any
facility to which any Borrower or Guarantor, or their respective
predecessors-in-interest, sent or directly arranged the transport of any
Contaminant (collectively, the "Indemnified Matters"); provided, however, the
Borrowers shall have no obligation to an Indemnitee hereunder with respect to
Indemnified Matters caused by or resulting from the willful misconduct or gross
negligence of such Indemnitee, as determined by a final, non-appealable order of
a court of competent jurisdiction and (b) not to assert any claim against any of
the Indemnified Parties on any theory of liability for special, indirect,
consequential or punitive damages arising out of, or in any way in connection
with, the Revolving Credit Commitments, the Obligations or any other matters
governed by this Agreement and/or the other Loan Documents. To the extent that
the undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, each Borrower shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees. The Agent, Lenders and the
Issuing Banks agree to notify Distribution of the institution or assertion of
any Indemnified Matter, but the parties hereto hereby agree that the failure to
so notify Distribution shall not release any Borrower from its obligations
hereunder, except to the extent of any material increase in the liabilities of
such Borrower under this Section 15.03 directly resulting from such failure to
receive notice from such Indemnitees.
120
15.04. Change in Accounting Principles. If any change in the
accounting principles used in the preparation of the most recent Financial
Statements referred to in Section 8.01 are hereafter required or permitted by
the rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Borrowers with the agreement of their independent certified public accountants
and such changes result in a change in the method of calculation of any of the
covenants, standards or terms found in Article IX, Article X, Article XI and
Section 12.01(o)(ii), the parties hereto agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating compliance with such covenants,
standards and terms by the Borrowers shall be the same after such changes as if
such changes had not been made; provided, however, no change in GAAP that would
affect the method of calculation of any of the covenants, standards or terms
shall be given effect in such calculations until such provisions are amended, in
a manner satisfactory to the Requisite Lenders and Distribution, to so reflect
such change in accounting principles.
15.05. Setoff. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law, upon the
occurrence and during the continuance of any Event of Default, each Lender, each
Issuing Bank and any Lender Affiliate is hereby authorized by Parent and each
Borrower at any time or from time to time, without notice to any Person (any
such notice being hereby expressly waived) to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured
(but not including trust accounts)) and any other Indebtedness at any time held
or owing by such Lender, Issuing Bank or any Lender Affiliate to or for the
credit or the account of Parent or such Borrower against and on account of the
Obligations of the Borrowers to such Lender, Issuing Bank or any Lender
Affiliate, including, but not limited to, all Loans and Letters of Credit and
all claims of any nature or description arising out of or in connection with
this Agreement, irrespective of whether or not (i) such Lender or Issuing Bank
shall have made any demand hereunder or (ii) the Agent, at the request or with
the consent of the Requisite Lenders, shall have declared the principal of and
interest on the Loans and other amounts due hereunder to be due and payable as
permitted by Article XII and even though such Obligations may be contingent or
unmatured. Each Lender and each Issuing Bank agrees that it shall not, without
the express consent of the Requisite Lenders, and that it shall, to the extent
it is lawfully entitled to do so, upon the request of the Requisite Lenders,
exercise its setoff rights hereunder against any accounts of any Borrower or
Guarantor now or hereafter maintained with such Lender, Issuing Bank or any
Lender Affiliate or either of them. Any Lender whose Lender Affiliate has
exercised any such right of set-off agrees to provide the Agent and Distribution
with written notice thereof promptly after the occurrence thereof.
15.06. Ratable Sharing. The Lenders agree among themselves
that (i) with respect to all amounts received by them which are applicable to
the payment of the Obligations (excluding the fees described in Sections
3.01(g), 5.02 and Article XIV), equitable adjustment will be made so that, in
effect, all such amounts will be shared among them ratably in accordance with
their Pro Rata Shares, whether received by voluntary payment, by the exercise of
the right of setoff or banker's lien, by counterclaim or cross-action or by the
enforcement of any or all of the Obligations (excluding the fees described in
Sections 3.01(g), 5.02 and Article XIV) or the Collateral, (ii) if any of them
shall by voluntary payment or by the exercise of any right of counterclaim,
setoff, banker's lien or otherwise, receive payment of a proportion of the
aggregate amount of the Obligations held by it, which is
121
greater than the amount which such Lender is entitled to receive hereunder, the
Lender receiving such excess payment shall purchase, without recourse or
warranty, an undivided interest and participation (which it shall be deemed to
have done simultaneously upon the receipt of such payment) in such Obligations
owed to the others so that all such recoveries with respect to such Obligations
shall be applied ratably in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 15.06 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 15.05, the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of such
Borrower in the amount of such participation.
15.07. Amendments and Waivers.
(a) General Provisions. Unless otherwise provided for or
required in this Agreement, no amendment or modification of any provision of
this Agreement or any of the other Loan Documents shall be effective without the
written agreement of the Requisite Lenders (which the Requisite Lenders shall
have the right to grant or withhold in their sole discretion) and the Borrower
or Guarantor parties thereto, as applicable. No termination or waiver of any
provision of this Agreement or any of the other Loan Documents, or consent to
any departure by any Borrower or Guarantor therefrom, shall be effective without
the written concurrence of the Requisite Lenders, which the Requisite Lenders
shall have the right to grant or withhold in their sole discretion. All
amendments, modifications, waivers and consents not specifically reserved to
Lenders, Issuing Banks, and the Agent in Section 15.07(b), Section 15.07(c) and
in other provisions of this Agreement or the other Loan Documents shall require
only the approval of the Requisite Lenders. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on any Borrower in any case shall entitle
such Borrower or any other Borrower to any other or further notice or demand in
similar or other circumstances.
(b) Amendments, Consents and Waivers by Super-Majority
Lenders. Any amendment, modification, termination, waiver or consent with
respect to any of the following provisions of this Agreement shall be effective
only by a written agreement, signed by the Super-Majority Lenders:
(i) change in the definitions of Borrowing Base (except to the
extent modified by the Agent as anticipated by the text of such
definition set forth in this Agreement with the consent of the
Requisite Lenders) or Borrowing Base Certificate (except to the extent
modified by the Agent as anticipated by the text of the definition of
Borrowing Base set forth in this Agreement) or
(ii) change in any component of the Borrowing Base or
Borrowing Base Certificate, including, without limitation, the
definitions of any terms used in the Borrowing Base Certificate or the
definition of Borrowing Base (other than by inclusion of Eligibility
Reserves established by the Agent or Requisite Lenders).
122
(c) Amendments, Consents and Waivers by All Lenders. Any
amendment, modification, termination, waiver or consent with respect to any of
the following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender:
(i) release of any Borrower or Guarantor (except as provided
in Section 13.09(c)(ii)) or all or a substantial portion of the
Collateral (except as provided in Section 13.09(c)),
(ii) change in the definitions of Maximum Revolving Credit
Amount, Excess Borrowing Amount, Interim Liquidity Amount, Overadvance
Amount, Requisite Lenders, Revolving Credit Availability, or
Super-Majority Lenders,
(iii) amendment of Section 15.01 or this Section 15.07,
(iv) assignment of any right or interest in or under this
Agreement or any of the other Loan Documents by any Borrower,
(v) waiver of any Event of Default described in Sections
12.01(a), (f), (g), (h), and (m),
(vi) waiver of any conditions specified in Sections 6.01 or
6.02 (except with respect to a condition based upon another provision
of this Agreement, the waiver of which requires only the concurrence of
the Requisite Lenders),
(vii) increase in the amount of the Revolving Credit
Commitments,
(viii) reduction of the principal amount of, rate or amount of
interest on the Loans, the Reimbursement Obligations, or any fees or
other amounts payable to Lenders (other than by the payment or
prepayment thereof), and
(ix) postponement of the Revolving Credit Termination Date or
any date fixed for any payment of principal of, or interest on, the
Loans, the Reimbursement Obligations or any fees or other amounts
payable to Lenders.
(d) Agent Authority. The Agent may, but shall have no
obligation to, with the written concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Notwithstanding
anything to the contrary contained in this Section 15.07, no amendment,
modification, waiver or consent shall affect the rights or duties of the Agent
under this Agreement or the other Loan Documents, unless made in writing and
signed by the Agent in addition to the Lenders required above to take such
action; and the order of priority set forth in clauses (A) through (C) of
Section 4.02(b)(ii) may be changed only with the prior written consent of the
Agent. Notwithstanding anything herein to the contrary, in the event that any
Borrower shall have requested, in a writing delivered to the Agent and the
Lenders, that any Lender agree to an amendment, modification, waiver or consent
with respect to any particular provision or provisions of this Agreement or the
other Loan Documents, and such Lender shall have failed to state, in writing,
that it either agrees or disagrees (in full or in part) with all such requests
(in the case of its statement of agreement, subject to satisfactory
documentation and such other conditions it may specify) within thirty (30) days
after such request, then such Lender
123
hereby irrevocably authorizes the Agent to agree or disagree, in full or in
part, and in the Agent's sole discretion, to such requests on behalf of such
Lender as such Lender's attorney-in-fact and to execute and deliver any writing
approved by the Agent which evidences such agreement as such Lender's duly
authorized agent for such purposes.
15.08. Notices. Unless otherwise specifically provided herein,
any notice or other communication herein required or permitted to be given shall
be in writing and may be personally served, sent by facsimile transmission or
courier service or United States certified mail and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a
facsimile transmission, or four (4) Business Days after deposit in the United
States mail with postage prepaid and properly addressed. Notices to the Agent
pursuant to Articles II, IV or XIII shall not be effective until received by the
Agent. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 15.08) shall
be as set forth below each party's name on the signature pages hereof or the
signature page of any applicable Assignment and Acceptance, or, as to each
party, at such other address as may be designated by such party in a written
notice to all of the other parties to this Agreement.
15.09. Survival of Warranties and Agreements. All
representations and warranties made herein and all obligations of the Borrowers
in respect of taxes, indemnification and expense reimbursement shall survive the
execution and delivery of this Agreement and the other Loan Documents, the
making and repayment of the Loans, the issuance and discharge of Letters of
Credit hereunder and the termination of this Agreement and shall not be limited
in any way by the passage of time or occurrence of any event and shall expressly
cover time periods when the Agent, any of the Issuing Banks or any of the
Lenders may have come into possession or control of any of the Property.
15.10. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent, any Lender or any Issuing Bank in
the exercise of any power, right or privilege under any of the Loan Documents
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing under
the Loan Documents are cumulative with and not exclusive of any rights or
remedies otherwise available.
15.11. Marshalling; Payments Set Aside. None of the Agent, any
Lender or any Issuing Bank shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets
in favor of any Borrower or any other Person or against or in payment of any or
all of the Obligations. To the extent that any Borrower makes a payment or
payments to the Agent, the Lenders or the Issuing Banks or any of such Persons
receives payment from the proceeds of the Collateral or exercises its rights of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party, then to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or setoff had not occurred.
15.12. Severability. In case any provision in or obligation
under this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity,
124
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
15.13. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement or be given any substantive effect.
15.14. Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
15.15. Limitation of Liability. No claim may be made by
Parent, any Borrower, any Lender, any Issuing Bank, the Agent or any other
Person against the Agent, any other Issuing Bank or any other Lender or the
Affiliates, directors, officers, employees, attorneys or agents of any of them
for any special, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and Parent, each Borrower, each Lender, each
Issuing Bank and the Agent hereby waives, releases and agrees not to ▇▇▇ upon
any such claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
15.16. Successors and Assigns. This Agreement and the other
Loan Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of the Lenders and the Issuing Banks. The
rights hereunder of the Borrowers, or any interest therein, may not be assigned
without the written consent of all Lenders as provided in Section 15.07(c)(iv).
15.17. Certain Consents and Waivers of Parent and the
Borrowers.
(a) Personal Jurisdiction.
(i) EACH OF THE AGENT, THE LENDERS, THE ISSUING BANKS, PARENT
AND THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK
STATE COURT OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY
COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS,
IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, WHETHER ARISING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. PARENT AND EACH
BORROWER IRREVOCABLY DESIGNATES AND
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ CORPORATION SYSTEM, INC., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ AS ITS AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH
OF THE AGENT, THE LENDERS, THE ISSUING BANKS, PARENT AND THE BORROWERS
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. PARENT AND EACH
BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) PARENT AND EACH BORROWER AGREES THAT THE AGENT SHALL HAVE
THE RIGHT TO PROCEED AGAINST PARENT AND SUCH BORROWER OR ITS PROPERTY
IN A COURT IN ANY LOCATION TO ENABLE THE AGENT, THE ISSUING BANKS AND
THE LENDERS TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN
FAVOR OF THE AGENT, ANY ISSUING BANK OR ANY LENDER. PARENT AND EACH
BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN
ANY PROCEEDING BROUGHT BY THE AGENT, ANY LENDER OR ANY ISSUING BANK TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR
TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT, ANY
LENDER OR ANY ISSUING BANK. PARENT AND EACH BORROWER WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE
AGENT, ANY ISSUING BANK OR ANY LENDER MAY COMMENCE A PROCEEDING
DESCRIBED IN THIS SECTION.
(b) Service of Process. PARENT AND EACH BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE PROCESS AGENT OR PARENT'S OR SUCH
BORROWER'S NOTICE ADDRESS SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE
(5) DAYS AFTER SUCH MAILING. PARENT AND EACH BORROWER IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT TO BRING PROCEEDINGS
AGAINST PARENT OR ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
126
(c) Waiver of Jury Trial. EACH OF THE AGENT, THE LENDERS, THE
ISSUING BANKS, PARENT AND THE BORROWERS IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
ANY OF PARENT, THE BORROWERS, THE AGENT, LENDERS, OR ISSUING BANKS MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
15.18. Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents, or supplements hereto may be
executed in counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. Subject to the provisions of Section 6.01, this
Agreement shall become effective against Parent, the Borrowers, each Lender,
each Issuing Bank and the Agent on the Effective Date. This Agreement and each
of the other Loan Documents shall be construed to the extent reasonable to be
consistent one with the other, but to the extent that the terms and conditions
of this Agreement are actually inconsistent with the terms and conditions of any
other Loan Document, this Agreement shall govern.
15.19. Limitation on Agreements. All agreements between
Parent, the Borrowers, the Agent, each Lender and each Issuing Bank in the Loan
Documents are hereby expressly limited so that in no event shall any of the
Loans or other amounts payable by the Borrowers under any of the Loan Documents
be directly or indirectly secured (within the meaning of Regulation U) by Margin
Stock.
15.20. Confidentiality. Subject to Section 15.01(f), the
Agent, the Lenders and the Issuing Banks shall hold all nonpublic information
obtained pursuant to the requirements of this Agreement in accordance with the
Agent's, such Lender's or such Issuing Bank's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure (a) reasonably required
by a bona fide offeree, transferee or participant in connection with the
contemplated transfer or participation and shall require any such offeree,
transferee or participant to agree (and require any of its offerees, transferees
or participants to agree) in writing to comply with this Section 15.20 or (b) as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process and, unless prohibited by any Requirement of Law, use
its best efforts to inform Distribution of such request or legal process prior
to its compliance therewith. In no event shall the Agent, any Lender or any
Issuing Bank be obligated or required to return any materials furnished by
Parent, any Borrower, or any other Subsidiary of Parent; provided, however, each
offeree shall be required to agree that if it does not become a transferee or
participant it shall return all materials furnished to it by such Persons in
connection with this Agreement. Any and all confidentiality agreements entered
into between the Agent, any Lender or any Issuing Bank and Parent or any
Borrower shall survive the execution of this Agreement. The Parent and each
Borrower acknowledges that each of the Agent, Issuing Bank and Lenders and their
respective Affiliates (collectively, the "Bank Parties") may be providing debt
financing, equity capital or other services, including, without limitation,
advisory services, to other companies in respect of which the Parent and
Borrowers may have conflicting interests regarding transactions described herein
and otherwise. Each of the Bank Parties hereby agrees that it will not use
confidential information obtained from the Parent and/or Borrowers or other
Subsidiaries of
127
Parent by virtue of the transactions contemplated by this Agreement or its other
relationships with the Parent and/or Borrowers in connection with the
performance by such Bank Party of services for other companies nor will it
furnish any such information to such other companies. The Parent and Borrowers
each hereby acknowledge that no Bank Party has any obligation to use
confidential information obtained from other companies in connection with the
transactions contemplated by this Agreement or to furnish the same to the Parent
or any Borrower.
15.21. Entire Agreement. This Agreement, taken together with
all of the other Loan Documents, embodies the entire agreement and understanding
among the parties hereto and supersedes all prior agreements and understandings,
written and oral, relating to the subject matter hereof.
15.22. Advice of Counsel. Each Borrower and each Lender and
Issuing Bank understand that the Agent's counsel represents only the Agent's and
its Affiliates' interests and that Parent, the Borrowers, other Lenders and
other Issuing Banks are advised to obtain their own counsel. Parent, and each
Borrower represents and warrants to the Agent and the other Holders that it has
discussed this Agreement with its counsel.
15.23. Amendment and Restatement of Predecessor Agreement; No
Novation. Upon this Agreement becoming effective, the terms and provisions of
the Predecessor Agreement shall be and hereby are amended, superseded and
restated in their entirety by the terms and provisions of this Agreement and the
rights and remedies of the Lenders and Issuing Banks with respect to the Events
of Default described in that certain Amendment No. 9, Waiver, Consent and
Standstill dated as of March 31, 2000, executed and delivered in connection with
the Predecessor Agreement shall be and hereby are waived. This Agreement shall
not constitute a novation.
15.24. Obligations of Borrowers Joint and Several. Each of the
Borrowers agrees that it shall be jointly and severally liable for all of the
Obligations. Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodations to be provided by the
Lenders and Issuing Banks under this Agreement, for the mutual benefit, directly
and indirectly, of each of the Borrowers and in consideration of the
undertakings of each of the Borrowers to accept joint and several liability for
the obligations of each of them. Each of the Borrowers jointly and severally
hereby irrevocably and unconditionally accepts, not merely as a surety but also
as a co-debtor, joint and several liability with the other Borrowers with
respect to the payment and performance of all of the Obligations, it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each of the Borrowers without preferences or distinction
among them. If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of the Obligations in accordance with the terms thereof, then in each such
event, the other Borrowers will make such payment with respect to, or perform,
such Obligation. The obligations of each Borrower under the provisions of this
Section 15.24 constitute full recourse obligations of such Borrower, enforceable
against it to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any other
circumstances whatsoever. Except as otherwise expressly provided herein, each
Borrower hereby waives notice of acceptance of its joint and several liability,
notice of any Loan made, or Letter of Credit issued, under this Agreement,
notice of occurrence of any Event of Default, or of any demand for any payment
under this Agreement, notice of any action at any time taken or omitted by any
Lender or Issuing Bank under or in respect of any
128
of the Obligations, any requirement of diligence and, generally, all demands,
notices and other formalities of every kind in connection with this Agreement.
Each Borrower hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by any Lender or Issuing Bank at any time or times in respect of
any default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by any Lender in respect of any of the Obligations, and
the taking, addition, substitution or release, in whole or in part, at any time
or times, of any security for any of the Obligations or in part, at any time or
times, of any security for any of the Obligations or the addition, substitution
or release, in whole or in part, of any Borrower. Without limiting the
generality of the foregoing, each Borrower assents to any other action or delay
in acting or failure to act on the part of any Lender, including, without
limitation, any failure strictly or diligently to assert any right or to pursue
any remedy or to comply fully with the applicable laws or regulations thereunder
which might, but for the provisions of this Section 15.24, afford grounds for
terminating, discharging or relieving such Borrower, in whole or in part, from
any of its obligations under this Section 15.24, it being the intention of each
Borrower that, so long as any of the Obligations remain unsatisfied, the
obligations of such Borrower under this Section 15.24 shall not be discharged
except by performance and then only to the extent of such performance. The
Obligations of each Borrower under this Section 15.24 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any Borrower
or any Lender. The joint and several liability of the Borrowers hereunder shall
continue in full force and effect notwithstanding any absorption, merger,
amalgamation or any other change whatsoever in the name, membership,
constitution or place of formation of any Borrower or any Lender or Issuing
Bank. The provisions of this Section 15.24 are made for the benefit of the
Holders and their respective successors and assigns, and may be enforced by any
such Person from time to time against any of the Borrowers as often as occasion
therefor may arise and without requirement on the part of any Holder first to
marshal any of its claims or to exercise any of its rights against any of the
other Borrowers or to exhaust any remedies available to it against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations or to elect any other remedy. The provisions of this
Section 15.24 shall remain in effect until all the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Holder upon the insolvency, bankruptcy
or reorganization of any of the Borrowers, or otherwise, the provisions of this
Section 15.24 will forthwith be reinstated in effect, as though such payment had
not been made. Notwithstanding any provision to the contrary contained herein or
in any other of the Loan Documents, to the extent the joint obligations of a
Borrower shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of each
Borrower hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the federal Bankruptcy Code). The Borrowers hereby agree, as among
themselves, that if any Borrower shall become an Excess Funding Borrower (as
defined below), each other Borrower shall, on demand of such Excess Funding
Borrower (but subject to the next sentence hereof and to subsection (B) below),
pay to such Excess Funding Borrower an amount equal to such Borrower's Pro Rata
Share (as defined below and determined, for this purpose, without reference to
the properties, assets, liabilities and debts of such Excess Funding Borrower)
of such Excess Payment (as
129
defined below). The payment obligation of any Borrower to any Excess Funding
Borrower under this Section 15.24 shall be subordinate and subject in right of
payment to the prior payment in full of the Obligations of such Borrower under
the other provisions of this Agreement, and such Excess Funding Borrower shall
not exercise any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations. For purposes hereof, (i)
"Excess Funding Borrower" shall mean, in respect of any Obligations arising
under the other provisions of this Agreement (hereafter, the "Joint
Obligations"), a Borrower that has paid an amount in excess of its Pro Rata
Share of the Joint Obligations; (ii) "Excess Payment" shall mean, in respect of
any Joint Obligations, the amount paid by an Excess Funding Borrower in excess
of its Pro Rata Share of such Joint Obligations; and (iii) "Pro Rata Share", for
the purposes of this Section 15.24, shall mean, for any Borrower, the ratio
(expressed as a percentage) of (A) the amount by which the aggregate present
fair saleable value of all of its assets and properties exceeds the amount of
all debts and liabilities of such Borrower (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Borrower hereunder) to (B) the amount by which the aggregate present fair
saleable value of all assets and other properties of such Borrower and all of
the other Borrowers exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Borrower and the other Borrowers
hereunder) of such Borrower and all of the other Borrowers, all as of the
Effective Date.
130
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first above written.
BORROWERS:
AVIATION SALES DISTRIBUTION
SERVICES COMPANY
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
AEROCELL STRUCTURES, INC.
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
AVS/▇▇▇▇▇-▇▇▇▇▇ MACHINE COMPANY
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
WHITEHALL CORPORATION
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
TRIAD INTERNATIONAL MAINTENANCE COMPANY
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
131
APEX MANUFACTURING, INC.
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
CARIBE AVIATION, INC.
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
AIRCRAFT INTERIOR DESIGN, INC.
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
AVIATION SALES LEASING COMPANY
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
TIMCO ENGINE CENTER, INC.
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
132
AVIATION SALES BEARINGS
COMPANY
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
PARENT:
AVIATION SALES COMPANY
By_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
Notice Address (Borrowers & Parent):
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Akerman, Senterfitt & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
133
AGENT:
CITICORP USA, INC., as Agent
By_____________________________________________
Shapleigh ▇. ▇▇▇▇▇
Managing Director
Notice Address:
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Shapleigh ▇. ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Sidley & Austin
Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
134
ISSUING BANK:
CITIBANK, N.A.
By_____________________________________________
Shapleigh ▇. ▇▇▇▇▇
Vice President
Notice Address:
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Shapleigh ▇. ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
135
LENDERS:
CITICORP USA, INC.
By_____________________________________________
Shapleigh ▇. ▇▇▇▇▇
Managing Director
Notice Address, Domestic Lending
Office and Eurodollar Lending
Office or Eurodollar Affiliate:
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Shapleigh ▇. ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
SALOMON BROTHERS HOLDING
COMPANY, INC
By_____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
Notice Address, Domestic Lending
Office and Eurodollar Lending
Office or Eurodollar Affiliate:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ Pestitto/
▇▇▇▇▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇/9150/9151
136
▇▇▇▇▇▇ FINANCIAL, INC.
By_____________________________________________
Name:
Title:
Notice Address:
▇▇▇▇▇▇ Financial, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Domestic Lending Office, Eurodollar Lending
Office or Eurodollar Affiliate:
▇▇▇▇▇▇ Financial, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
137
NATIONAL CITY COMMERCIAL
FINANCE, INC.
By_____________________________________________
Name:
Title:
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
National City Commercial Finance, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
138
FIRST UNION COMMERCIAL
CORPORATION
By_____________________________________________
Name:
Title:
Notice Address:
First Union Commercial Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic Lending Office, Eurodollar
Lending Office:
First Union Commercial Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
139
IBJ WHITEHALL BUSINESS CREDIT
CORPORATION
By_____________________________________________
Name:
Title:
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
:
IBJ Whitehall Business Credit
Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
140
FLEET NATIONAL BANK
By_____________________________________________
Name:
Title:
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
:
Fleet National Bank
Transportation Division
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code 01-08-01
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ Brand
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
141
BANKATLANTIC
By_____________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
:
BankAtlantic
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇, ▇.▇.
By_____________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
Commercial Banking Division
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
:
The International Bank of
Miami, N.A. Commercial Banking Division ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
A Canadian Chartered Bank
By_____________________________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
By_____________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President & Manager
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
National Bank of Canada
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
144
FIRSTAR BANK, N.A.
By_____________________________________________
Name:
Title:
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
:
Firstar Bank, N.A.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
Tram ▇▇▇/▇▇▇/▇▇-▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
145
CITIZENS BUSINESS CREDIT
COMPANY
By_____________________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
Citizens Business Credit Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
146
AMSOUTH BANK
By_____________________________________________
Name:
Title:
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
AmSouth Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
147
PNC BANK NATIONAL ASSOCIATION
By_____________________________________________
Name:
Title:
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
PNC Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
148
SUNTRUST BANK, MIAMI, N.A.
By_____________________________________________
Name:
Title:
Notice Address, Domestic Lending Office,
Eurodollar Lending Office and Eurodollar
Affiliate:
SunTrust Bank, Miami, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Fine
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
149