Execution Counterpart
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BE AEROSPACE, INC.
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FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 29, 1993
Amended and Restated as of August 7, 1998
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THE CHASE MANHATTAN BANK,
as Administrative Agent
NATIONSBANK, N.A.,
as Documentation Agent
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it
is attached but is inserted for convenience of reference only.
Page
Section 1. Definitions and Accounting Matters...........................................1
1.01 Certain Defined Terms........................................................1
1.02 Accounting Terms and Determinations.........................................21
1.03 Classes and Types of Loans..................................................21
Section 2. Commitments, Loans, Notes and Prepayments...................................22
2.01 Loans.......................................................................22
2.02 Borrowings..................................................................23
2.03 Letters of Credit...........................................................23
2.04 Changes of Commitments......................................................30
2.05 Commitment Fee..............................................................31
2.06 Lending Offices.............................................................32
2.07 Several Obligations; Remedies Independent...................................32
2.08 Evidence of Debt............................................................32
2.09 Optional Prepayments and Conversions or Continuations of Loans..............32
2.10 Mandatory Prepayments and Reductions of Commitments.........................33
Section 3. Payments of Principal and Interest..........................................35
3.01 Repayment of Loans..........................................................35
3.02 Interest....................................................................35
Section 4. Payments; Pro Rata Treatment; Computations; Etc.............................36
4.01 Payments....................................................................36
4.02 Pro Rata Treatment..........................................................37
4.03 Computations................................................................38
4.04 Minimum Amounts.............................................................38
4.05 Certain Notices.............................................................38
4.06 Non-Receipt of Funds by the Administrative Agent............................39
4.07 Sharing of Payments, Etc....................................................40
Section 5. Yield Protection, Etc.......................................................41
5.01 Additional Costs............................................................41
5.02 Limitation on Types of Loans................................................43
5.03 Illegality..................................................................44
5.04 Treatment of Affected Loans.................................................44
5.05 Compensation................................................................45
5.06 Additional Costs in Respect of Letters of Credit............................45
5.07 U.S. Taxes..................................................................46
Page
Section 6. Conditions Precedent........................................................47
6.01 Conditions to Effectiveness.................................................47
6.02 Initial and Subsequent Extensions of Credit.................................49
Section 7. Representations and Warranties..............................................50
7.01 Corporate Existence.........................................................50
7.02 Financial Condition.........................................................50
7.03 Litigation..................................................................50
7.04 No Breach...................................................................51
7.05 Action......................................................................51
7.06 Approvals...................................................................51
7.07 Use of Credit...............................................................51
7.08 ERISA.......................................................................52
7.09 Taxes.......................................................................52
7.10 Investment Company Act......................................................52
7.11 Public Utility Holding Company Act..........................................52
7.12 Material Agreements and Liens...............................................52
7.13 Environmental Matters.......................................................53
7.14 Capitalization..............................................................54
7.15 Subsidiaries, Etc...........................................................55
7.16 Title to Assets.............................................................55
7.17 Compliance with Law.........................................................56
7.18 True and Complete Disclosure................................................56
7.19 Year 2000...................................................................56
Section 8. Covenants of the Company....................................................57
8.01 Financial Statements, Etc...................................................57
8.02 Litigation..................................................................60
8.03 Existence, Etc..............................................................60
8.04 Insurance...................................................................61
8.05 Prohibition of Fundamental Changes..........................................61
8.06 Limitation on Liens.........................................................61
8.07 Indebtedness................................................................63
8.08 Investments.................................................................64
8.09 Restricted Payments.........................................................65
8.10 Leverage Ratio..............................................................65
8.11 Adjusted Net Worth..........................................................66
8.12 Interest Coverage Ratio.....................................................66
8.13 [Intentionally Omitted.]....................................................67
8.14 Lines of Business...........................................................67
8.15 Transactions with Affiliates................................................67
8.16 Use of Proceeds.............................................................68
8.17 Certain Obligations Respecting Subsidiaries.................................68
8.18 Modifications of Certain Documents..........................................69
8.19 Environmental Matters.......................................................69
Page
8.20 Security for Loans..........................................................70
8.21 Redemption of Senior Subordinated Indebtedness..............................70
Section 9. Events of Default...........................................................70
Section 10. The Administrative Agent....................................................73
10.01 Appointment, Powers and Immunities..........................................73
10.02 Reliance by Administrative Agent............................................74
10.03 Defaults....................................................................74
10.04 Rights as a Lender..........................................................75
10.05 Indemnification.............................................................75
10.06 Non-Reliance on Administrative Agent and Other Lenders......................76
10.07 Failure to Act..............................................................76
10.08 Resignation or Removal of Administrative Agent..............................76
10.09 Consents under Basic Documents..............................................77
10.10 Collateral Sub-Agents.......................................................77
10.11 Documentation Agent.........................................................77
Section 11. Miscellaneous...............................................................77
11.01 Waiver......................................................................77
11.02 Notices.....................................................................78
11.03 Expenses, Etc...............................................................78
11.04 Amendments, Etc.............................................................79
11.05 Successors and Assigns......................................................80
11.06 Assignments and Participations..............................................80
11.07 Survival....................................................................82
11.08 Captions....................................................................82
11.09 Counterparts................................................................83
11.10 Governing Law; Submission to Jurisdiction...................................83
11.11 Waiver of Jury Trial........................................................83
11.12 Treatment of Certain Information; Confidentiality...........................83
11.13 Amended and Restated Security Agreement.....................................84
Annex 1 - Commitments
Annex 2 Pledged Stock
Annex 3 Pledged Membership Interests
SCHEDULE I - Material Agreements and Liens
SCHEDULE II - Hazardous Materials
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV - Approvals and Compliance
SCHEDULE V - Existing Letters of Credit
SCHEDULE VI - Taxes
SCHEDULE VII - Transactions with Affiliates
EXHIBIT A-1 - Form of Security Agreement
EXHIBIT A-2 - Form of In-Flight Guarantee and Security Agreement
EXHIBIT B - Form of Confidentiality Agreement
EXHIBIT C - Form of Series C Letter of Credit
(iv)
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of October
29, 1993, amended and restated as of August 7, 1998, among: BE AEROSPACE, INC.,
a corporation duly organized and validly existing under the laws of the State of
Delaware (the "Company"); each of the lenders that is a signatory hereto
identified under the caption "LENDERS" on the signature pages hereto or which,
pursuant to Section 11.06(b) hereof, shall become a "Lender" hereunder
(individually, a "Lender" and, collectively, the "Lenders"); and THE CHASE
MANHATTAN BANK, a New York banking corporation, as agent for the Lenders (in
such capacity, together with its successors in such capacity, the
"Administrative Agent").
The Company, certain Lenders and the Administrative Agent are
party to a Fourth Amended and Restated Credit Agreement dated as of October 29,
1993, amended and restated as of April 3, 1998 (as modified and supplemented and
in effect immediately prior to the Amendment Effective Date referred to below,
the "Existing Credit Agreement"). The Company has requested that the Lenders and
the Administrative Agent agree to amend and restate the Existing Credit
Agreement, and the Lenders and the Administrative Agent are willing to amend and
restate the Existing Credit Agreement, all on the terms and conditions herein
set forth.
Accordingly, the parties hereto agree to amend and restate the
Existing Credit Agreement so that, as amended and restated, it reads in its
entirety as provided herein.
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms.
As used herein, the following terms shall have the following
meanings (all terms defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in the plural and
vice versa):
"Acquisition" shall mean any transaction, or any series of
related transactions, by which the Company and/or any of its Subsidiaries (a)
acquires any ongoing business or all or substantially all of the assets of any
Person, whether through purchase of assets, merger or otherwise, (b) directly or
indirectly acquires control of at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors or (c) directly or indirectly acquires control of a majority ownership
interest in any partnership, joint venture or similar arrangement. The terms
"Acquire" and "Acquired" used as a verb shall have a correlative meaning.
"Adjusted Net Worth" shall mean, as at any date, the sum of (a)
total stockholders' equity of the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP) plus (b) the
aggregate amount of Restricted Payments made since November 29, 1997 in respect
of the purchase, redemption, retirement or other acquisition of any shares of
any class of stock of the Company permitted under Section 8.09 hereof plus (c)
the fair market value of any shares of capital stock of the Company (determined
as of the date such shares are issued) issued after November 29, 1997 which are
utilized in any
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business combination accounted for using pooling of interest accounting plus (d)
an amount not to exceed $35,000,000 in the aggregate of the after-tax amount
(calculated using the then effective corporate Federal tax rate, regardless of
the after-tax amount determined in accordance with GAAP) of any nonrecurring
noncash write-offs of intangible assets since November 29, 1997 plus (e) the
amount of any purchased research and development and related acquisition costs
of a target company to the extent such costs are or have been expensed after
November 29, 1997.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company and,
if such Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
As used in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise), provided that, in any event, any
Person that owns directly or indirectly securities having 5% or more of the
voting power for the election of directors or other governing body of a
corporation or 5% or more of the partnership or other ownership interests of any
other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person. Notwithstanding the
foregoing, (a) no individual shall be an Affiliate solely by reason of his or
her being a director, officer or employee of the Company or any of its
Subsidiaries and (b) none of the Subsidiaries of the Company shall be
Affiliates.
"Amendment Effective Date" shall mean the date on which all of
the conditions set forth in Section 6.01 hereof shall have been satisfied or
waived by the Lenders and the Administrative Agent.
"Applicable Lending Office" shall mean, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an affiliate of
such Lender) designated for such Type of Loan in the Administrative
Questionnaire submitted by such Lender or such other office of such Lender (or
of an affiliate of such Lender) as such Lender may from time to time specify to
the Administrative Agent and the Company as the office by which its Loans of
such Type are to be made and maintained.
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"Applicable Margin" shall mean with respect to Base Rate Loans
and Eurodollar Loans, the rate for such Type of Loan for each level period set
forth in the schedule below:
Applicable Margin
Level Period Base Rate Loans Eurodollar Loans
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Level I Period 0.00% 0.500%
Level II Period 0.00% 0.750%
Level III Period 0.00% 0.875%
Level IV Period 0.00% 1.000%
Level V Period 0.00% 1.250%
Level VI Period 0.25% 1.500%
Level VII Period 0.75% 2.000%
provided that notwithstanding anything herein to the contrary, the Applicable
Margin shall not be less than the rate for a Level VI Period from the Amendment
Effective Date until the earlier of (i) the third Business Day following of the
receipt of the financial statements under Section 8.01(b) as at and for the
fiscal quarter ending on the Fiscal Date in November, 1998 and (ii) the
termination of the Series C Commitments and the repayment in full of the Series
C Loans.
"B/E Services" shall mean B/E Aerospace Services, Inc., a
Delaware corporation and Wholly Owned Subsidiary of the Company.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978,
as amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates
based upon the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement, the
Notes, the Letter of Credit Documents and the Security Documents.
"Business Day" shall mean any day (a) on which commercial banks
are not authorized or required to close in New York City and (b) if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, a Conversion of or into, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
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"Calculation Period" shall mean, as at any date, the period of
four consecutive complete fiscal quarters of the Company ending on or most
recently ended prior to such date for which financial statements have been
delivered pursuant to Sections 7.02(a), 8.01(a), 8.01(b) or 8.01(h) hereof.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board), and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"Casualty Event" shall mean, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
Property for which such Person or any of its Subsidiaries receives insurance
proceeds, or proceeds of a condemnation award or other compensation.
"Chase" shall mean The Chase Manhattan Bank.
"Class" shall have the meaning assigned to such term in Section
1.03 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral Account" shall have the meaning assigned to such term
in Section 4.01 of the Security Agreement.
"Commitment Fee Rate" shall mean (a) 0.2000% for any Level I
Period, (b) 0.2250% for any Level II Period, (c) 0.2500% for any Level III
Period, (d) 0.2750% for any Level IV Period, (e) 0.3250% for any Level V Period,
(f) 0.3750% for any Level VI Period and (e) 0.5000% for any Level VII Period,
provided that notwithstanding anything herein to the contrary, the Commitment
Fee Rate shall not be less than the rate for a Level VI Period from the
Amendment Effective Date until the earlier of (i) the third Business Day
following of the receipt of the financial statements under Section 8.01(b) as at
and for the fiscal quarter ending on the Fiscal Date in November, 1998 and (ii)
the termination of the Series C Commitments and the repayment in full of the
Series C Loans.
"Commitments" shall mean the Series A Commitments, the Series B
Commitments and the Series C Commitments.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.09 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
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"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.09 hereof of one Type of Loans into another
Type of Loans, which may be accompanied by the transfer by a Lender (at its sole
discretion) of a Loan from one Applicable Lending Office to another.
"Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"Disposition" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by the
Company or any of its Subsidiaries to any Person excluding any sale, assignment,
transfer or other disposition of inventory in the ordinary course of business
and on ordinary business terms; provided that the term "Disposition" shall not
include (i) any Equity Issuance (as such term is defined in this Section 1.01
without giving effect to the proviso therein), (ii) any sale, assignment,
transfer or other disposition of Property by any Subsidiary of the Company to
the Company or to any other Subsidiary of the Company, in each case for
consideration that is not in excess of the fair market value of such Property as
determined in good faith by the chief financial officer of the Company or (iii)
any sale, assignment, transfer or other disposition of Property by the Company
or any Subsidiary of the Company to a joint venture, subject to the proviso in
Section 8.08(h) hereof. The creation of any Lien on any Property permitted under
Section 8.06 hereof shall not constitute a "Disposition" of such Property. The
term "Dispose" shall have a correlative meaning.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiary" shall mean any Subsidiary of the Company
that is incorporated under the law of any State of the United States of America.
"EBITDA" shall mean, for any period of four consecutive fiscal
quarters of the Company, for the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP), net operating
earnings (calculated before depreciation and amortization expense, non-recurring
non-cash write-offs of assets (to the extent deducted in computing net operating
earnings), Interest Expense, taxes and extraordinary and unusual items) for such
period.
"Environmental Claim" shall mean, with respect to any Person, (a)
any written notice, claim, demand or other communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any written claim by any governmental
authority for enforcement, cleanup, removal, response, remedial or other actions
or damages pursuant to any applicable Environmental Law, and any written claim
by any third party seeking damages, contribution, indemnification, cost
recovery,
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compensation or injunctive relief resulting from the presence of Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.
"Environmental Laws" shall mean any and all present and future
Federal, state, local and foreign laws, rules or regulations, and any orders or
decrees, in each case as now or hereafter in effect, relating to the regulation
or protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes into the indoor or outdoor
environment, including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes.
"Equity Issuance" shall mean (a) any issuance or sale by the
Company or any of its Subsidiaries after the Restatement Date of (i) any capital
stock, (ii) any warrants or options exercisable in respect of capital stock
(other than any warrants or options issued to directors, officers, employees,
agents, consultants or advisors of the Company or any of its Subsidiaries and
any capital stock of the Company issued upon the exercise of such warrants or
options) or (iii) any other security or instrument representing an equity
interest (or the right to obtain any equity interest) in the issuing or selling
Person or (b) the receipt by the Company or any of its Subsidiaries after
November 29, 1997 of any capital contribution (whether or not evidenced by any
equity security issued by the recipient of such contribution); provided that
Equity Issuance shall not include (x) any such issuance or sale by any
Subsidiary of the Company to the Company or any Wholly Owned Subsidiary of the
Company, (y) any capital contribution by the Company or any Wholly Owned
Subsidiary of the Company to any Subsidiary of the Company or (z) any such
issuance or sale by the Company in connection with a permitted Acquisition under
Section 8.05(b).
"Equity Rights" shall mean, with respect to any Person, any
outstanding subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including, without limitation, any stockholders' or
voting trust agreements) for the issuance, sale, registration or voting of, or
outstanding securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which the Company is a member and (ii) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which the
Company is a member.
"Eurodollar Base Rate" shall mean, with respect to any Eurodollar
Loan for any Interest Period therefor, the arithmetic mean (rounded upwards, if
necessary, to the nearest 1/100
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of 1%) of the respective rates per annum quoted by each Reference Lender at
approximately 11:00 a.m. London time (or as soon thereafter as practicable) on
the date two Business Days prior to the first day of such Interest Period for
the offering by such Reference Lender to leading banks in the London interbank
market of Dollar deposits having a term comparable to such Interest Period and
in an amount comparable to the principal amount of the Eurodollar Loan to be
made by such Reference Lender for such Interest Period. If any Reference Lender
is not participating in any Eurodollar Loan during any Interest Period therefor,
the Eurodollar Base Rate for such Loan for such Interest Period shall be
determined by reference to the amount of the Eurodollar Loan to be made by Chase
for such Interest Period.
"Eurodollar Loans" shall mean Loans the interest rates on which
are determined on the basis of rates referred to in the definition of
"Eurodollar Base Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to
the Eurodollar Base Rate for such Loan for such Interest Period divided by 1
minus the Reserve Requirement for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such term
in Section 9 hereof.
"Existing Credit Agreement" shall have the meaning assigned to
such term in the recitals hereto.
"Existing Lenders" shall mean the lenders party to the Existing
Credit Agreement.
"Existing Letters of Credit" shall have the meaning assigned to
such term in Section 2.03(A)(l) hereof.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate charged to Chase on such Business Day on such
transactions as determined by the Administrative Agent.
"Fiscal Date" shall mean the last day of each fiscal quarterly
period of the Company.
"Foreign Subsidiary" shall mean each Subsidiary of the Company
other than any Domestic Subsidiary.
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"Funded Debt" shall mean, for any Person: (a) all Indebtedness of
such Person that should be reflected on a balance sheet of such Person in
accordance with GAAP, (b) all Indebtedness of any other Person that should be
reflected on a balance sheet of such other Person in accordance with GAAP and
that is secured by a Lien on the Property of, is supported by a letter of credit
issued for account of, or is Guaranteed by, such Person and (c) in respect of
the Company, the amount of the Series C Letter of Credit.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those which, in accordance with the last
sentence of Section 1.02(a) hereof, are to be used in making the calculations
for purposes of determining compliance with this Agreement.
"GE Lease Agreement" shall mean the Master Lease Agreement dated
as of October 20, 1997 between the Company and General Electric Capital
Corporation, for itself and as Agent for Certain Participants.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
have a correlative meaning.
"Hazardous Material" shall mean, collectively, (a) any petroleum
or petroleum products, flammable explosives, radioactive materials, asbestos in
any form that is or could become friable, urea formaldehyde foam insulation, and
transformers or other equipment that contain dielectric fluid containing
polychlorinated biphenyls (PCB's), (b) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous wastes", "restricted hazardous wastes", "toxic substances",
"toxic pollutants", "contaminants", "pollutants" or words of similar import
under any Environmental Law and (c) any other chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any Environmental Law.
"Indebtedness" shall mean, for any Person: (a) obligations
created, issued or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days of
- 9 -
the date the respective goods are delivered or the respective services are
rendered; (c) Indebtedness of others secured by a Lien on the Property of such
Person, whether or not the respective indebtedness so secured has been assumed
by such Person; (d) obligations of such Person in respect of letters of credit
or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) Capital Lease Obligations of such
Person; and (f) Indebtedness of others Guaranteed by such Person.
"In-Flight" shall mean In-Flight Entertainment, LLC, a Delaware
limited liability company and Wholly Owned Subsidiary of the Company.
"In-Flight Guarantee and Security Agreement" shall mean the
Amended and Restated Guarantee and Security Agreement dated as of November 19,
1997, amended and restated as of April 3, 1998, between In-Flight and the
Administrative Agent, substantially in the form of Exhibit A-2 hereto, as the
same shall be modified, supplemented and in effect from time to time.
"Information Memorandum" shall mean the Confidential Information
Memorandum dated July, 1998 distributed to the Lenders.
"Interest Coverage Ratio" shall mean, as at any date the ratio of
(i) EBITDA for the relevant Calculation Period to (ii) Interest Expense for such
Calculation Period; provided that, from and after the date of any Acquisition
occurring after February 28, 1998 until four full fiscal quarters of the Company
have elapsed since the date of such Acquisition, the Interest Coverage Ratio
shall be calculated on a pro forma basis (reflecting, inter alia, any amount
attributable to any operating expense that will be eliminated or cost reduction
that will be realized (in each case, net of any operating expense or other cost
increase) in connection with such Acquisition, as determined in good faith by
the chief financial officer of the Company in accordance with GAAP and the
rules, regulations and guidelines of the Securities and Exchange Commission, as
if such elimination of operating expense or the realization of such cost
reductions were achieved at the beginning of such four-quarter period) as though
such Acquisition had occurred, and any Funded Debt incurred or assumed by the
Company or any of its Subsidiaries in connection with, or in anticipation of,
such Acquisition had been incurred or assumed, on the first day of such
Calculation Period.
"Interest Expense" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness accrued or capitalized during such period (whether or
not actually paid during such period) plus (b) the net amounts payable (or minus
the net amounts receivable) under Interest Rate Protection Agreements accrued
during such period (whether or not actually paid or received during such period)
minus (c) interest income during such period.
"Interest Period" shall mean, with respect to any Eurodollar
Loan, each period commencing on the date such Eurodollar Loan is made or
Converted from a Base Rate Loan or the last day of the next preceding Interest
Period for such Loan and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the Company may
select as provided in Section 4.05 hereof, except that each Interest Period that
commences
- 10 -
on the last Business Day of a calendar month (or on any day for which there is
no numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period for any Series A Loan may
end after the Series A Commitment Termination Date; (ii) no Interest Period for
any Series B Loan may commence before and end after any Series B Principal
Payment Date unless, after giving effect thereto, the aggregate principal amount
of the Series B Loans having Interest Periods that end after such Series B
Principal Payment Date shall be equal to or less than the aggregate principal
amount of the Series B Loans scheduled to be outstanding after giving effect to
the payments of principal required to be made on such Series B Principal Payment
Date; (iii) no Interest Period for any Series C Loan may end after the Series C
Commitment Termination Date; (iv) each Interest Period that would otherwise end
on a day which is not a Business Day shall end on the next succeeding Business
Day (or, if such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); and (v) notwithstanding
clauses (i), (ii) and (iii) above, no Interest Period shall have a duration of
less than one month and, if the Interest Period for any Eurodollar Loan would
otherwise be a shorter period, such Eurodollar Loan shall not be available
hereunder for such period.
"Interest Rate Protection Agreement" shall mean, for any Person,
an interest rate swap, cap or collar agreement or similar arrangement between
such Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
For purposes hereof, the "credit exposure" at any time of any Person under an
Interest Rate Protection Agreement to which such Person is a party shall be
determined at such time in accordance with the standard methods of calculating
credit exposure under similar arrangements as prescribed from time to time by
the Administrative Agent, taking into account potential interest rate movements
and the respective termination provisions and notional principal amount and term
of such Interest Rate Protection Agreement.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of, or capital contribution to, any other Person or any
agreement to make any such acquisition or capital contribution (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such short sale);
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person, but excluding any such advance, loan or
extension of credit having a term not exceeding 90 days representing the
purchase price of inventory or supplies sold by such Person in the ordinary
course of business); (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other liability of any
other Person and (without duplication) any amount committed to be advanced, lent
or extended to such Person; or (d) the entering into of any Interest Rate
Protection Agreement.
"Issuing Lender" shall mean Chase, as the issuer of Letters of
Credit under Section 2.03 hereof, together with its successors and assigns in
such capacity.
- 11 -
"Letter of Credit" shall mean a Series A Letter of Credit or the
Series C Letter of Credit.
"Letter of Credit Interest" shall mean the Series A Letter of
Credit Interest or the Series C Letter of Credit Interest.
"Letter of Credit Liabilities" shall mean the Series A Letter of
Credit Liabilities or the Series C Letter of Credit Liabilities.
"Level I Period" shall mean any period during which (a) no Event
of Default shall have occurred and be continuing, and (b) the Leverage Ratio is
less than 2.25 to 1; "Level II Period" shall mean any period, other than a Level
I Period, during which (a) no Event of Default shall have occurred and be
continuing and (b) the Leverage Ratio is greater than or equal to 2.25 to 1 but
less than 2.75 to 1; "Level III Period" shall mean any period, other than a
Level I Period or a Level II Period, during which (a) no Event of Default shall
have occurred and be continuing and (b) the Leverage Ratio is greater than or
equal to 2.75 to 1 but less than 3.25 to 1; "Level IV Period" shall mean any
period, other than a Level I Period, a Level II Period or a Level III Period
during which (a) no Event of Default shall have occurred and be continuing and
(b) the Leverage Ratio is greater than or equal to 3.25 to 1 but less than 3.75
to 1; "Level V Period" shall mean any period, other than a Level I Period, a
Level II Period, a Level III Period or Level IV Period during which (a) no Event
of Default shall have occurred and be continuing and (b) the Leverage Ratio is
greater than or equal to 3.75 to 1 but less than 4.25 to 1; "Level VI Period"
shall mean any period that is not a Level I Period, a Level II Period, a Level
III Period, a Level IV Period or a Level V Period during which (a) no Event of
Default shall have occurred and be continuing and (b) the Leverage Ratio is
greater than or equal to 4.25 to 1 but less than 4.75; and "Level VII Period"
shall mean any period that is not a Level I Period, a Level II Period, a Level
III Period, a Level IV Period, a Level V Period or a Level VI Period. Any change
in the Applicable Margin for any Type of Loan or any change in the Commitment
Fee by reason of a change in the Leverage Ratio shall become effective on the
third Business Day following receipt by the Administrative Agent of the
financial statements of the Company and its Subsidiaries delivered as required
by Sections 8.01(a), (b) or (h) hereof; provided that failure to deliver such
financial statements as required by Sections 8.01(a), (b) or (h) hereof shall
result in the Applicable Margin and Commitment Fee Rate being at the rates set
forth opposite Level VII Period.
"Leverage Ratio" shall mean, as at any date, the ratio of Total
Funded Debt at such date to EBITDA for the relevant Calculation Period; provided
that, from and after the date of any Acquisition occurring after February 28,
1998 until four full fiscal quarters of the Company shall have elapsed since the
date of such Acquisition, the Leverage Ratio shall be calculated on a pro forma
basis (reflecting, inter alia, any amount attributable to any operating expense
that will be eliminated or cost reduction that will be realized (in each case,
net of any operating expense or other cost increase) in connection with such
Acquisition, as determined in good faith by the chief financial officer of the
Company in accordance with GAAP and the rules, regulations and guidelines of the
Securities and Exchange Commission, as if such elimination of operating expense
or the realization of such cost reductions were achieved at the beginning of
such four-quarter period") as though such Acquisition had occurred, any Funded
Debt incurred
- 12 -
or assumed by the Company or any of its Subsidiaries in connection with, or in
anticipation of, such Acquisition had been incurred or assumed, on the first day
of such Calculation Period.
"Lien" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such Property. For purposes of this Agreement and the other Basic Documents, a
Person shall be deemed to own subject to a Lien any Property that it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
(other than an operating lease) relating to such Property.
"Loans" shall mean the Series A Loans, the Series B Loans and the
Series C Loans.
"Majority Lenders" shall mean Majority Series A Lenders, Majority
Series B Lenders and Majority Series C Lenders.
"Majority Series A Lenders" shall mean Series A Lenders having
more than 50% of the aggregate amount of the Series A Commitments or, if the
Series A Commitments shall have terminated, Lenders holding more than 50% of the
sum of (a) the aggregate unpaid principal amount of the Series A Loans plus (b)
the aggregate amount of all Letter of Credit Liabilities.
"Majority Series B Lenders" shall mean Series B Lenders having
more than 50% of the aggregate amount of the Series B Commitments or, if the
Series B Commitments shall have terminated, Lenders holding more than 50% of the
aggregate unpaid principal amount of the Series B Loans.
"Majority Series C Lenders" shall mean Series C Lenders having
more than 50% of the aggregate amount of the Series C Commitments or, if the
Series C Commitments shall have terminated, Lenders holding more than 50% of the
aggregate unpaid principal amount of the Series C Loans.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations U and X.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, prospects,
liabilities or capitalization of the Company and its Subsidiaries taken as a
whole, (b) the ability of the Company to perform its obligations under any of
the Basic Documents to which it is a party, (c) the validity or enforceability
of any of the Basic Documents, (d) the rights and remedies of the Lenders and
the Administrative Agent under any of the Basic Documents or (e) the timely
payment of the principal of or interest on the Loans or the Reimbursement
Obligations or other amounts payable in connection therewith.
"Material Subsidiary" shall mean at any date any Subsidiary of
the Company whose total assets equal or exceed 2% of the total assets of the
Company and its Subsidiaries on
- 13 -
a consolidated basis as at the most recent Fiscal Date; provided that,
notwithstanding the above, each of B/E Services and Royal Inventum B.V. shall at
all times constitute a Material Subsidiary of the Company so long as it is a
Subsidiary of the Company.
"Multiemployer Plan" shall mean a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been made by the
Company or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Available Proceeds" shall mean:
(i) in the case of any Disposition, the amount of Net Cash
Payments received in connection with such Disposition;
(ii) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation
received by the Company and its Subsidiaries in respect of such Casualty
Event net of (A) reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith and (B) contractually required
repayments of Indebtedness to the extent secured by a Lien on such
Property and any income and transfer taxes payable by the Company or any
of its Subsidiaries in respect of such Casualty Event;
(iii) in the case of any Equity Issuance, the aggregate amount of
all cash received by the Company and its Subsidiaries in respect of such
Equity Issuance net of reasonable expenses incurred by the Company and
its Subsidiaries in connection therewith; and
(iv) in the case of any Reversion, the aggregate amount of all
cash received by the Company or any of its Subsidiaries in respect of
such Reversion net of (A) reasonable expenses incurred by the Company
and its Subsidiaries in connection therewith and (B) any income and
excise taxes payable by the Company or any of its Subsidiaries in
respect of such Reversion.
"Net Cash Payments" shall mean, with respect to any Disposition,
the aggregate amount of all cash payments, and the fair market value of any
non-cash consideration, received by the Company and its Subsidiaries directly or
indirectly in connection with such Disposition; provided that (a) Net Cash
Payments shall be net of (i) the amount of any legal, accounting and other
professional fees, title and recording tax expenses, commissions and other fees
and expenses paid by the Company and its Subsidiaries in connection with such
Disposition and (ii) any Federal, state and local income or other taxes
estimated to be payable by the Company and its Subsidiaries as a result of such
Disposition (but only to the extent that such estimated taxes are in fact paid
to the relevant Federal, state or local governmental authority within three
months of date of such Disposition or the Company or any of its Subsidiaries
uses any applicable tax benefit available to it as set forth on its balance
sheet to reduce such estimated taxes payable within such three month period),
(b) Net Cash Payments shall not include any cash payments of less than $100,000
from any one Disposition or a series of related Dispositions, and (c) Net Cash
Payments shall be net of any repayments by the Company or any of its
Subsidiaries of Indebtedness to the extent that (i) such Indebtedness is secured
by a Lien on the Property that is
- 14 -
the subject of such Disposition and (ii) the transferee of (or holder of a Lien
on) such Property requires that such Indebtedness be repaid as a condition to
the purchase of such Property.
"Notes" shall mean the promissory notes (if any) executed and
delivered by the Company pursuant to Section 2.08(d) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Investments" shall mean any Investment in (i) direct
obligations of the United States of America or any agency thereof, or
obligations guaranteed by the United States of America, or of any agency
thereof; (ii) commercial paper rated at least A-1 by S&P or P-1 by Xxxxx'x;
(iii) time deposits with, including certificates of deposit issued by, any
office located in the United States of America of any bank or trust company
which is organized under the laws of the United States of America or any state
thereof and has capital, surplus and undivided profits aggregating at least
$1,000,000,000; (iv) shares of any money market or mutual fund not less than 80%
of the assets of which are invested solely in securities or obligations of the
type described in clauses (i) through (iii) above and (v) repurchase agreements
with respect to securities described in clause (i) above entered into with an
office of a bank or trust company meeting the criteria specified in clause (iii)
above, provided in each case that such Investment matures within one year from
the date of acquisition thereof by the Company or a Subsidiary of the Company.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust, unincorporated
organization or government (or any agency, instrumentality or political
subdivision thereof).
"Plan" shall mean an employee benefit plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of
any Loan, any Reimbursement Obligation or any other amount under this Agreement,
any Note or any other Basic Document that is not paid when due (whether at
stated maturity, by acceleration, by optional or mandatory prepayment or
otherwise), a rate per annum during the period from and including the due date
to but excluding the date on which such amount is paid in full equal to 2% plus
the Base Rate as in effect from time to time plus the Applicable Margin for Base
Rate Loans (provided that, if the amount so in default is principal of a
Eurodollar Loan and the due date thereof is a day other than the last day of the
Interest Period therefor, the "Post-Default Rate" for such principal shall be,
for the period for and including such due date to but excluding the last day of
the Interest Period, 2% plus the interest rate for such Loan as provided in
Section 3.02 hereof and, thereafter, the rate provided for above in this
definition).
"Prime Rate" shall mean the rate of interest from time to time
announced by Chase at the Principal Office as its prime commercial lending rate.
- 15 -
"Principal Office" shall mean the principal office of Chase,
located on the date hereof at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Property" shall mean any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Quarterly Dates" shall mean the quarterly anniversaries of the
Restatement Date; provided that, if any such date is not a Business Day, the
Quarterly Date shall be the next succeeding Business Day (or, if such next
succeeding Business Day falls in the next succeeding calendar month, the next
preceding Business Day).
"Recapture Date" shall mean the last day of the Recapture Period.
"Recapture Period" shall mean each period (a) commencing on the
later of (i) the Restatement Date and (ii) the day immediately following the
last day of the immediately preceding Recapture Period, and (b) ending on the
date on which the Company and/or its Subsidiaries receives Net Available
Proceeds which, together with all Net Available Proceeds received since the
first day of such Recapture Period, equal or exceeds in the aggregate
$1,000,000.
"Reference Lenders" shall mean Chase and NationsBank, N.A.
"Regulations A, D, U and X" shall mean, respectively, Regulations
A, D, U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"Regulatory Change" shall mean, with respect to any Lender, any
change after the date of this Agreement in Federal, state or foreign law or
regulations (including, without limitation, Regulation D) or the adoption or
making after such date of any interpretation, directive or request applying to a
class of banks including such Lender of or under any Federal, state or foreign
law or regulations (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.
"Reimbursement Obligations" shall mean the Series A Reimbursement
Obligations and the Series C Reimbursement Obligations.
"Release" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Materials through ambient air, soil, surface water,
groundwater, wetlands, land or subsurface strata. The terms "Release" and
"Released" used as a verb shall have a correlative meaning.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period
- 16 -
under Regulation D by member banks of the Federal Reserve System in New York
City with deposits exceeding one billion Dollars against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall include any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change with respect to (i) any category of liabilities that includes deposits by
reference to which the Eurodollar Base Rate is to be determined as provided in
the definition of "Eurodollar Base Rate" in this Section 1.01 or (ii) any
category of extensions of credit or other assets that includes Eurodollar Loans.
"Restatement Date" shall mean August 7, 1998.
"Restricted Payment" shall mean, with respect to any Person, (a)
dividends (in cash, Property or obligations) on, or other payments or
distributions on account of, or the setting apart of money for a sinking or
other analogous fund for, or the purchase, redemption, retirement or other
acquisition of, any shares of any class of stock of such Person or of any
warrants (other than of shares of common stock, warrants or options of such
Person as payment for the exercise price of options or warrants to purchase
common stock of such Person having a fair market value equal to such exercise
price), options or other rights to acquire the same (or to make any payments to
any other Person, such as "phantom stock" payments, where the amount thereof is
calculated with reference to the fair market or equity value of such Person or
any of its Subsidiaries), but excluding dividends payable solely in shares of
common stock or in options, warrants or other rights to purchase such common
stock of such Person or (b) any payment (whether made by such Person or any of
its Subsidiaries) on account of the purchase, redemption, prepayment, defeasance
or other acquisition or retirement of value of any Indebtedness (such
Indebtedness, "Retired Indebtedness") that is subordinated in right of payment
to the prior payment of the Loans, except any such payment made from the
proceeds of (x) the issuance of any equity securities or (y) any additional
unsecured Indebtedness that does not rank senior in right of payment to, and
does not mature or have any mandatory prepayment, which does not include
required prepayments as a result of a change of control or asset sale, prior to
the maturity of, such Retired Indebtedness.
"Reversion" shall mean the termination by the Company or any of
its Subsidiaries of a Plan which results in a payment to the Company or any of
its Subsidiaries of any part of the over-funded portion of such Plan.
"Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Security Agreement" shall mean the Amended and Restated Security
Agreement dated as of October 29, 1998, amended and restated as of April 3,
1998, between the Company and the Administrative Agent, substantially in the
form of Exhibit A-1 hereto, as the same shall be modified, supplemented and in
effect from time to time.
"Security Documents" shall mean, collectively, the Security
Agreement and the In-Flight Guarantee and Security Agreement.
- 17 -
"Senior Subordinated Indentures" shall mean the Senior
Subordinated 1996 Indenture and the Senior Subordinated 1998 Indenture.
"Senior Subordinated 1996 Indenture" shall mean the Indenture
dated as of February 1, 1996 between the Company and Fleet National Bank
Connecticut, N.A., as Trustee, as the same shall be modified and supplemented
and in effect from time to time.
"Senior Subordinated 1998 Indenture" shall mean the Indenture
dated as of February 13, 1998 between the Company and United States Trust
Company of New York as Trustee, as the same shall be modified and supplemented
and in effect from time to time.
"Series A Commitment" shall mean, for each Series A Lender, the
obligation of such Lender to make Series A Loans, and to participate in Series A
Letters of Credit, in an aggregate amount at any one time outstanding up to but
not exceeding the amount set opposite the name of such Lender on Annex 1 hereto
under the caption "Series A Commitment" (as the same may be reduced from time to
time pursuant to Section 2.04 hereof or increased or reduced from time to time
pursuant to Section 11.06 hereof). The original aggregate principal amount of
the Series A Commitments is $100,000,000.
"Series A Commitment Percentage" shall mean, with respect to any
Series A Lender, the ratio of (a) the amount of the Series A Commitment of such
Lender to (b) the aggregate amount of the Series A Commitments of all of the
Lenders.
"Series A Commitment Termination Date" shall mean April 3, 2004;
provided that if such day is not a Business Day, the Series A Commitment
Termination Date shall be the immediately preceding Business Day.
"Series A Lenders" shall mean (a) on the Amendment Effective
Date, the Lenders having Series A Commitments as indicated on Annex 1 hereto and
(b) thereafter, the Lenders from time to time holding Series A Loans and Series
A Commitments after giving effect to any assignments thereof permitted by
Section 11.06 hereof.
"Series A Letter of Credit" shall mean any letter of credit
issued pursuant to Section 2.03(A) hereof.
"Series A Letter of Credit Documents" shall mean, with respect to
any Series A Letter of Credit, collectively, any application therefor and any
other agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Series A Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned or at risk
with respect to such Series A Letter of Credit or (b) any collateral security
for any of such obligations, each as the same may be modified and supplemented
and in effect from time to time.
"Series A Letter of Credit Interest" shall mean, for each Series
A Lender, such Lender's participation interest (or, in the case of the Issuing
Lender, the Issuing Lender's retained interest) in the Issuing Lender's
liability under Series A Letters of Credit and such Lender's rights
- 18 -
and interests in Series A Reimbursement Obligations and fees, interest and other
amounts payable in connection with Series A Letters of Credit and Series A
Reimbursement Obligations.
"Series A Letter of Credit Liability" shall mean, without
duplication, at any time and in respect of any Series A Letter of Credit, the
sum of (a) the undrawn amount of such Series A Letter of Credit plus (b) the
aggregate unpaid principal amount of all Series A Reimbursement Obligations of
the Company at such time due and payable in respect of all drawings made under
such Series A Letter of Credit. For purposes of this Agreement, a Series A
Lender (other than the Issuing Lender) shall be deemed to hold a Series A Letter
of Credit Liability in an amount equal to its participation interest in the
related Series A Letter of Credit under Section 2.03(A) hereof, and the Issuing
Lender shall be deemed to hold a Series A Letter of Credit Liability in an
amount equal to its retained interest in the related Series A Letter of Credit
after giving effect to the acquisition by the Series A Lenders other than the
Issuing Lender of their participation interests under said Section 2.03(A).
"Series A Loans" shall mean the loans provided for by Section
2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Series A Notes" shall mean the promissory notes (if any)
provided for by Section 2.08(d) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time.
"Series A Reimbursement Obligations" shall mean, at any time, the
obligations of the Company then outstanding, or which may thereafter arise in
respect of all Series A Letters of Credit then outstanding, to reimburse amounts
paid by the Issuing Lender in respect of any drawings under a Series A Letter of
Credit.
"Series B Commitment" shall mean, for each Series B Lender, the
obligation of such Lender to make Series B Loans in an aggregate amount at any
one time outstanding up to but not exceeding the amount set opposite the name of
such Lender on Annex 1 hereto under the caption "Series B Commitment" (as the
same may be reduced from time to time pursuant to Section 2.04 hereof or
increased or reduced from time to time pursuant to Section 11.06 hereof). The
original aggregate principal amount of the Series B Commitments is $100,000,000.
"Series B Commitment Termination Date" shall mean April 2, 1999;
provided that if such day is not a Business Day, the Series B Commitment
Termination Date shall be the immediately preceding Business Day.
"Series B Lenders" shall mean (a) on the Amendment Effective
Date, the Lenders having Series B Commitments as indicated on Annex 1 hereto and
(b) thereafter, the Lenders from time to time holding Series B Loans and Series
B Commitments after giving effect to any assignments thereof permitted by
Section 11.06 hereof.
"Series B Loans" shall mean the loans provided for by Section
2.01(b) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
- 19 -
"Series B Notes" shall mean the promissory notes (if any)
provided for by Section 2.08(d) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time.
"Series B Principal Payment Date" shall mean any Quarterly Date
on which payments of principal of Series B Loans are scheduled to be made
pursuant to Section 3.01(b) hereof.
"Series C Commitment" shall mean, for each Series C Lender, the
obligation of such Lender to make Series C Loans, and to participate in the
Series C Letter of Credit, in an aggregate amount at any one time outstanding up
to but not exceeding the amount set opposite the name of such Lender on Annex 1
hereto under the caption "Series C Commitment" (as the same may be reduced from
time to time pursuant to Section 2.04 hereof or increased or reduced from time
to time pursuant to Section 11.06 hereof). The original aggregate principal
amount of the Series C Commitments is $120,000,000.
"Series C Commitment Percentage" shall mean, with respect to any
Series C Lender, the ratio of (a) the amount of the Series C Commitment of such
Lender to (b) the aggregate amount of the Series C Commitments of all of the
Lenders.
"Series C Commitment Termination Date" shall mean April 2, 1999;
provided that if such day is not a Business Day, the Series C Commitment
Termination Date shall be the immediately preceding Business Day.
"Series C Lenders" shall mean (a) on the Amendment Effective
Date, the Lenders having Series C Commitments as indicated on Annex 1 hereto and
(b) thereafter, the Lenders from time to time holding Series C Loans and Series
C Commitments after giving effect to any assignments thereof permitted by
Section 11.06 hereof.
"Series C Letter of Credit" shall mean the letter of credit
issued pursuant to Section 2.03(B) hereof.
"Series C Letter of Credit Documents" shall mean, with respect to
the Series C Letter of Credit, collectively, any application therefor and any
other agreements, instruments, guarantees or other documents (whether general in
application or applicable only to the Series C Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned or at risk
with respect to the Series C Letter of Credit or (b) any collateral security for
any of such obligations, each as the same may be modified and supplemented and
in effect from time to time.
"Series C Letter of Credit Interest" shall mean, for each Series
C Lender, such Lender's participation interest (or, in the case of the Issuing
Lender, the Issuing Lender's retained interest) in the Issuing Lender's
liability under the Series C Letter of Credit and such Lender's rights and
interests in Series C Reimbursement Obligations and fees, interest and other
amounts payable in connection with the Series C Letter of Credit and Series C
Reimbursement Obligations.
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"Series C Letter of Credit Liability" shall mean, without
duplication, at any time and in respect of the Series C Letter of Credit, the
sum of (a) the undrawn amount of the Series C Letter of Credit plus (b) the
aggregate unpaid principal amount of all Series C Reimbursement Obligations of
the Company at such time due and payable in respect of all drawings made under
the Series C Letter of Credit. For purposes of this Agreement, a Series C Lender
(other than the Issuing Lender) shall be deemed to hold a Series C Letter of
Credit Liability in an amount equal to its participation interest in the Series
C Letter of Credit under Section 2.03(B) hereof, and the Issuing Lender shall be
deemed to hold a Series C Letter of Credit Liability in an amount equal to its
retained interest in the related Series C Letter of Credit after giving effect
to the acquisition by the Series C Lenders other than the Issuing Lender of
their participation interests under said Section 2.03(B).
"Series C Loans" shall mean the loans provided for by Section
2.01(c) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Series C Notes" shall mean the promissory notes (if any)
provided for by Section 2.08(d) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time.
"Series C Reimbursement Obligations" shall mean, at any time, the
obligations of the Company then outstanding, or which may thereafter arise in
respect of the Series C Letter of Credit then outstanding, to reimburse amounts
paid by the Issuing Lender in respect of any drawings under the Series C Letter
of Credit.
"SMR" shall mean SMR Aerospace, Inc., an Ohio corporation.
"Specified Subsidiary" shall mean each Subsidiary of the Company
identified as a "Specified Subsidiary" on Schedule III hereto, but only until
all (or, in the case of a Subsidiary that is not a Domestic Subsidiary, 65%) of
its shares that are owned by the Company become subject to the Lien of the
Security Agreement or are otherwise pledged to the Administrative Agent for the
benefit of the Lenders pursuant to documentation in form and substance
reasonably satisfactory to the Majority Lenders.
"Subsidiary" shall mean, for any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person. "Wholly Owned Subsidiary" shall mean any such corporation,
partnership or other entity of which all of the equity securities or other
ownership interests (other than, in the case of a corporation, directors'
qualifying shares) are so owned or controlled.
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"Total Funded Debt" shall mean, as at any date, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of all Funded Debt.
"Type" shall have the meaning assigned to such term in Section
1.03 hereof.
1.02 Accounting Terms and Determinations.
-----------------------------------
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at
the time of delivery thereof in the manner described in subsection (b) below) be
prepared, in accordance with generally accepted accounting principles applied on
a basis consistent with those used in the preparation of the latest financial
statements furnished to the Lenders hereunder (which, prior to the delivery of
the first financial statements under Section 8.01 hereof, shall mean the audited
financial statements as at February 28, 1998 referred to in Section 7.02
hereof). All calculations made for the purposes of determining compliance with
this Agreement shall (except as otherwise expressly provided herein) be made by
application of generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the latest annual or quarterly
financial statements furnished to the Lenders pursuant to Section 8.01 hereof
(or, prior to the delivery of the first financial statements under Section 8.01
hereof, used in the preparation of the audited financial statements as at
February 28, 1998, referred to in Section 7.02 hereof) unless (i) the Company
shall have objected to determining such compliance on such basis at the time of
delivery of such financial statements or (ii) the Majority Lenders shall so
object in writing within 30 days after delivery of such financial statements, in
either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under Section 8.01 hereof,
shall mean the audited financial statements as at February 28, 1998 referred to
in Section 7.02 hereof).
(b) The Company shall deliver to the Lenders at the same time as
the delivery of any annual or quarterly financial statement under Section 8.01
hereof (i) a description in reasonable detail of any material variation between
the application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence of
subsection (a) above and (ii) reasonable estimates of the difference between
such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Section 8 hereof, the fiscal year of
the Company shall end on the last Saturday in February of each year, and the
last days of the first three fiscal quarters shall fall on the last Saturday in
each of May, August and November of each year, respectively.
1.03 Classes and Types of Loans. Loans, Letters of Credit, Letter
of Credit Liabilities and Reimbursement Obligations hereunder are distinguished
by "Class" and by
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"Type". The "Class" of a Loan (or of a Commitment to make a Loan) refers to
whether such Loan is a Series A Loan, a Series B Loan or a Series C Loan, each
of which constitutes a Class. The "Type" of a Loan refers to whether such Loan
is a Base Rate Loan or a Eurodollar Loan, each of which constitutes a Type.
Loans may be identified by both Class and Type. A Class of Letter of Credit,
Letter of Credit Liabilities or Reimbursement Obligations refers to whether such
Letter of Credit, Letter of Credit Liability or Reimbursement Obligation is
under the Series A Commitments or the Series C Commitments.
Section 2. Commitments, Loans, Notes and Prepayments.
-----------------------------------------
2.01 Loans.
-----
(a) Series A Loans. Each Series A Lender severally agrees, on the
terms and conditions of this Agreement, to make loans to the Company in Dollars
to but not including the Series A Commitment Termination Date in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
of the Series A Commitment of such Lender as in effect from time to time (such
Loans, together with the "Series A Loans" made under the Existing Credit
Agreement, being herein called "Series A Loans"), provided that in no event
shall the aggregate principal amount of all Series A Loans, together with the
aggregate amount of all Series A Letter of Credit Liabilities, exceed the
aggregate amount of the Series A Commitments. Subject to the terms and
conditions of this Agreement, the Company may borrow, repay and reborrow the
amount of the Series A Commitments by means of Base Rate Loans and Eurodollar
Loans and may Convert Series A Loans of one Type into Series A Loans of another
Type (as provided in Section 2.09 hereof). Series A Loans outstanding under the
Existing Credit Agreement will continue as Series A Loans under this Agreement.
(b) Series B Loans. Each Series B Lender severally agrees, on the
terms and conditions of this Agreement, to make loans to the Company in Dollars
to but not including the Series B Commitment Termination Date in an aggregate
principal amount up to but not exceeding the amount of the Series B Commitment
of such Lender as in effect from time to time (such Loans being herein called
"Series B Loans"). Subject to the terms and conditions of this Agreement, the
Company may borrow the amount of the Series B Commitments by means of Base Rate
Loans and Eurodollar Loans and may Convert Series B Loans of one Type into
Series B Loans of another Type (as provided in Section 2.09 hereof) or Continue
Series B Loans of one Type as Series B Loans of the same Type (as provided in
Section 2.09 hereof). Series B Loans may be prepaid, but they may not be
reborrowed once prepaid. Series B Loans outstanding under the Existing Credit
Agreement will continue as Series B Loans under this Agreement.
(c) Series C Loans. Each Series C Lender severally agrees, on the
terms and conditions of this Agreement, to make loans to the Company in Dollars
from the date of issuance of the Series C Letter of Credit to but not including
the Series C Commitment Termination Date in an aggregate principal amount at any
one time outstanding up to but not exceeding the amount of the Series C
Commitment of such Lender as in effect from time to time (the "Series C Loans"),
provided that in no event shall the aggregate principal amount of all Series C
Loans, together with the aggregate amount of all Series C Letter of Credit
Liabilities, exceed the
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aggregate amount of the Series C Commitments. Subject to the terms and
conditions of this Agreement, the Company may borrow, repay and reborrow the
amount of the Series C Commitments by means of Base Rate Loans and Eurodollar
Loans and may Convert Series C Loans of one Type into Series C Loans of another
Type (as provided in Section 2.09 hereof).
(d) Limit on Eurodollar Loans. No more than ten separate Interest
Periods in respect of Eurodollar Loans of either Class from each Lender may be
outstanding at any one time.
2.02 Borrowings. The Company shall give the Administrative Agent
(which shall promptly notify the Lenders) notice of each borrowing hereunder as
provided in Section 4.05 hereof. Not later than 1:00 p.m. New York time on the
date specified for each borrowing hereunder, each Lender shall make available
the amount of the Loan or Loans to be made by it on such date to the
Administrative Agent, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders, in immediately
available funds, for account of the Company. The amount so received by the
Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Company by depositing the same, in
immediately available funds, in an account of the Company maintained with Chase
at the Principal Office designated by the Company.
2.03 Letters of Credit.
-----------------
(A) Series A Letters of Credit. Subject to the terms and conditions of
this Agreement, the Series A Commitments may be utilized, upon the request of
the Company, in addition to the Series A Loans provided for by Section 2.01(a)
hereof, by the issuance by the Issuing Lender of letters of credit
(collectively, "Series A Letters of Credit") for account of the Company or any
of its Subsidiaries (as specified by the Company), provided that in no event
shall (i) the aggregate amount of all Series A Letter of Credit Liabilities,
together with the aggregate principal amount of the Series A Loans, exceed the
aggregate amount of the Series A Commitments as in effect from time to time,
(ii) the outstanding aggregate amount of all Series A Letter of Credit
Liabilities exceed $15,000,000 and (iii) the expiration date of any Series A
Letter of Credit extend beyond the earlier of the Series A Commitment
Termination Date and the date twelve months following the issuance of such
Series A Letter of Credit. The following additional provisions shall apply to
Series A Letters of Credit:
(a) The Company shall give the Administrative Agent at least
three Business Days' irrevocable prior notice (effective upon receipt)
specifying the Business Day (which shall be no later than thirty days preceding
the Series A Commitment Termination Date) each Series A Letter of Credit is to
be issued and the account party or parties therefor and describing in reasonable
detail the proposed terms of such Series A Letter of Credit (including the
beneficiary thereof) and the nature of the transactions or obligations proposed
to be supported thereby (including whether such Series A Letter of Credit is to
be a commercial letter of credit or a standby letter of credit). Upon receipt of
any such notice, the Administrative Agent shall advise the Issuing Lender of the
contents thereof.
(b) On each day during the period commencing with the issuance by
the Issuing Lender of any Series A Letter of Credit and until such Series A
Letter of Credit shall have
- 24 -
expired or been terminated, the Series A Commitment of each Series A Lender
shall be deemed to be utilized for all purposes of this Agreement in an amount
equal to such Lender's Series A Commitment Percentage of the then undrawn face
amount of such Series A Letter of Credit. Each Series A Lender (other than the
Issuing Lender) agrees that, upon the issuance of any Series A Letter of Credit
hereunder, it shall automatically acquire a participation in the Issuing
Lender's liability under such Series A Letter of Credit in an amount equal to
such Lender's Series A Commitment Percentage of such liability, and each Series
A Lender (other than the Issuing Lender) thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and shall be unconditionally obligated to the Issuing Lender to pay and
discharge when due, its Series A Commitment Percentage of the Issuing Lender's
liability under such Series A Letter of Credit.
(c) Upon receipt from the beneficiary of any Series A Letter of
Credit of any demand for payment under such Series A Letter of Credit, the
Issuing Lender shall promptly notify the Company (through the Administrative
Agent) of the amount to be paid by the Issuing Lender as a result of such demand
and the date on which payment is to be made by the Issuing Lender to such
beneficiary in respect of such demand. Notwithstanding the identity of the
account party of any Series A Letter of Credit, the Company hereby
unconditionally agrees to pay and reimburse the Administrative Agent for account
of the Issuing Lender for the amount of each demand for payment under such
Series A Letter of Credit at or prior to the date on which payment is to be made
by the Issuing Lender to the beneficiary thereunder, without presentment,
demand, protest or other formalities of any kind.
(d) Forthwith upon its receipt of a notice referred to in clause
(c) of this Section 2.03(A), the Company shall advise the Administrative Agent
whether or not the Company intends to borrow hereunder to finance its obligation
to reimburse the Issuing Lender for the amount of the related demand for payment
and, if it does, submit a notice of such borrowing as provided in Section 4.05
hereof. In the event that the Company fails to so advise the Administrative
Agent, or if the Company fails to reimburse the Issuing Lender for a demand for
payment under a Series A Letter of Credit by the date of such payment, the
Administrative Agent shall give each Series A Lender prompt notice of the amount
of the demand for payment, specifying such Lender's Series A Commitment
Percentage of the amount of the related demand for payment.
(e) Each Series A Lender (other than the Issuing Lender) shall
pay to the Administrative Agent for account of the Issuing Lender at the
Principal Office in Dollars and in immediately available funds, the amount of
such Lender's Series A Commitment Percentage of any payment under a Series A
Letter of Credit upon notice by the Issuing Lender (through the Administrative
Agent) to such Series A Lender requesting such payment and specifying such
amount; provided that such Series A Lender shall not be obligated to reimburse
the Issuing Bank if such payment is the result of the willful misconduct or
gross negligence of the Issuing Bank in determining that the request or demand
for such payment complied with the terms of such Series A Letter of Credit. Each
such Series A Lender's obligation to make such payments to the Administrative
Agent for account of the Issuing Lender under this clause (e), and the Issuing
Lender's right to receive the same, shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever, including, without
limitation, (i) the failure of any other Series
- 25 -
A Lender to make its payment under this clause (e), the financial condition of
the Company (or any other account party), the existence of any Default or (ii)
the termination of the Commitments. Each such payment to the Issuing Lender
shall be made without any offset, abatement, withholding or reduction
whatsoever. If any Series A Lender shall default in its obligation to make any
such payment to the Administrative Agent for account of the Issuing Lender, for
so long as such default shall continue the Administrative Agent shall at the
request of the Issuing Bank withhold from any payments received by the
Administrative Agent under this Agreement or any Note for account of such Series
A Lender the amount so in default and the Administrative Agent shall pay the
same to the Issuing Lender in satisfaction of such defaulted obligation.
(f) Upon the making of each payment by a Series A Lender to the
Issuing Lender pursuant to clause (e) above in respect of any Series A Letter of
Credit, such Lender shall, automatically and without any further action on the
part of the Administrative Agent, the Issuing Lender or such Lender, acquire (i)
a participation in an amount equal to such payment in the Series A Reimbursement
Obligation owing to the Issuing Lender by the Company hereunder and under the
Series A Letter of Credit Documents relating to such Series A Letter of Credit
and (ii) a participation in a percentage equal to such Lender's Series A
Commitment Percentage in any interest or other amounts payable by the Company
hereunder and under such Series A Letter of Credit Documents in respect of such
Series A Reimbursement Obligation (other than the commissions, charges, costs
and expenses payable to the Issuing Lender pursuant to clause (g) of this
Section 2.03(A)). Upon receipt by the Issuing Lender from or for account of the
Company of any payment in respect of any Series A Reimbursement Obligation or
any such interest or other amount (including by way of setoff or application of
proceeds of any collateral security) the Issuing Lender shall promptly pay to
the Administrative Agent for account of each Series A Lender entitled thereto,
such Series A Lender's Series A Commitment Percentage of such payment, each such
payment by the Issuing Lender to be made in the same money and funds in which
received by the Issuing Lender. In the event any payment received by the Issuing
Lender and so paid to the Series A Lenders hereunder is rescinded or must
otherwise be returned by the Issuing Lender, each Series A Lender shall, upon
the request of the Issuing Lender (through the Administrative Agent), repay to
the Issuing Lender (through the Administrative Agent) the amount of such payment
paid to such Lender, with interest as specified in clause (j) of this Section
2.03(A).
(g) The Company shall pay to the Administrative Agent for account
of the Series A Lenders in respect of each Series A Letter of Credit a letter of
credit fee in an amount equal to the product of the Applicable Margin for
Eurodollar Loans times the daily average undrawn amount of such Series A Letter
of Credit for the period from and including the date of issuance of such Series
A Letter of Credit to and including the date such Series A Letter of Credit is
drawn in full, expires or is terminated (such fee to be non-refundable, to be
paid in arrears on each Quarterly Date and on the Series A Commitment
Termination Date and to be calculated, for any day, after giving effect to any
payments made under such Series A Letter of Credit on such day). In addition,
the Company shall pay to the Administrative Agent for account of the Issuing
Lender all commissions, charges, costs and expenses in the amounts customarily
charged by the Issuing Lender from time to time in like circumstances with
respect to the issuance of each Series A Letter of Credit and drawings and other
transactions relating thereto.
- 26 -
(h) Promptly following the end of each calendar month, the
Issuing Lender shall deliver (through the Administrative Agent) to each Series A
Lender and the Company a notice describing the aggregate amount of all Series A
Letters of Credit outstanding at the end of such month. Upon the request of any
Series A Lender from time to time, the Issuing Lender shall deliver any other
information reasonably requested by such Lender with respect to each Series A
Letter of Credit then outstanding.
(i) The issuance by the Issuing Lender of each Series A Letter of
Credit shall, in addition to the conditions precedent set forth in Section 6
hereof, be subject to the conditions precedent that (i) such Series A Letter of
Credit shall be in such form, contain such terms and support such transactions
as shall be satisfactory to the Issuing Lender consistent with its then current
practices and procedures with respect to letters of credit of the same type and
(ii) the Company shall have executed and delivered such applications, agreements
and other instruments relating to such Series A Letter of Credit as the Issuing
Lender shall have reasonably requested consistent with its then current
practices and procedures with respect to letters of credit of the same type,
provided that in the event of any conflict between any such application,
agreement or other instrument and the provisions of this Agreement or any
Security Document, the provisions of this Agreement and the Security Documents
shall control.
(j) To the extent that any Series A Lender fails to pay any
amount required to be paid pursuant to clause (e) or (f) of this Section 2.03(A)
on the due date therefor, such Lender shall pay interest to the Issuing Lender
(through the Administrative Agent) on such amount from and including such due
date to but excluding the date such payment is made (i) during the period from
and including such due date to but excluding the date three Business Days
thereafter, at a rate per annum equal to the Federal Funds Rate (as in effect
from time to time) and (ii) thereafter, at a rate per annum equal to the Base
Rate (as in effect from time to time) plus 2%.
(k) The issuance by the Issuing Lender of any modification or
supplement to any Series A Letter of Credit hereunder shall be subject to the
same conditions applicable under this Section 2.03(A) to the issuance of new
Series A Letters of Credit, and no such modification or supplement shall be
issued hereunder unless either (x) the respective Series A Letter of Credit
affected thereby would have complied with such conditions had it originally been
issued hereunder in such modified or supplemented form or (y) each Series A
Lender shall have consented thereto.
(l) Pursuant to Section 2.03 of the Existing Credit Agreement,
Chase has issued the letters of credit identified on Schedule V hereto (the
"Existing Letters of Credit"). Each Series A Lender hereby agrees that each
Existing Letter of Credit shall constitute, on and after the Amendment Effective
Date, a Series A Letter of Credit for all purposes of this Agreement.
The Company hereby indemnifies and holds harmless each Series A Lender and the
Administrative Agent from and against any and all claims and damages, losses,
liabilities, costs or expenses which such Lender or the Administrative Agent may
incur (or which may be claimed against such Lender or the Administrative Agent
by any Person whatsoever) by reason of or in connection with the execution and
delivery or transfer of or payment or refusal to pay by
- 27 -
the Issuing Lender under any Series A Letter of Credit; provided that the
Company shall not be required to indemnify any Lender or the Administrative
Agent for any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (x) the willful misconduct or gross
negligence of the Issuing Lender in determining whether a request presented
under any Series A Letter of Credit complied with the terms of such Series A
Letter of Credit or (y) in the case of the Issuing Lender, such Lender's failure
to pay under any Series A Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of such Series A Letter
of Credit. Nothing in this Section 2.03(A) is intended to limit the other
obligations of the Company, any Lender or the Administrative Agent under this
Agreement.
(B) Series C Letter of Credit. Subject to the terms and conditions of
this Agreement, the Series C Commitments may be utilized, upon the request of
the Company, in addition to the Series C Loans provided for by Section 2.01(c)
hereof, by the issuance by the Issuing Lender of a letter of credit (the "Series
C Letter of Credit") for account of the Company in connection with, and at the
closing of, the Acquisition of the stock of SMR in substantially the form of
Exhibit C hereto, provided that in no event shall the aggregate amount of all
Series C Letter of Credit Liabilities, together with the aggregate principal
amount of the Series C Loans, exceed the aggregate amount of the Series C
Commitments as in effect from time to time. The following additional provisions
shall apply to Series C Letters of Credit:
(a) The Company shall give the Administrative Agent at least one
Business Day's irrevocable prior notice (effective upon receipt) specifying the
Business Day the Series C Letter of Credit is to be issued. Upon receipt of any
such notice, the Administrative Agent shall advise the Issuing Lender of the
contents thereof.
(b) On each day during the period commencing with the issuance by
the Issuing Lender of the Series C Letter of Credit and until the Series C
Letter of Credit shall have expired or been terminated, the Series C Commitment
of each Series C Lender shall be deemed to be utilized for all purposes of this
Agreement in an amount equal to such Lender's Series C Commitment Percentage of
the then undrawn amount of the Series C Letter of Credit. Each Series C Lender
(other than the Issuing Lender) agrees that, upon the issuance of the Series C
Letter of Credit hereunder, it shall automatically acquire a participation in
the Issuing Lender's liability under the Series C Letter of Credit in an amount
equal to such Lender's Series C Commitment Percentage of such liability, and
each Series C Lender (other than the Issuing Lender) thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and shall be unconditionally obligated to the Issuing Lender to pay and
discharge when due, its Series C Commitment Percentage of the Issuing Lender's
liability under the Series C Letter of Credit.
(c) Upon receipt from the beneficiary of the Series C Letter of
Credit of any demand for payment under the Series C Letter of Credit, the
Issuing Lender shall promptly notify the Company (through the Administrative
Agent) of the amount to be paid by the Issuing Lender as a result of such demand
and the date on which payment is to be made by the Issuing Lender to such
beneficiary in respect of such demand. The Company hereby unconditionally agrees
to pay and reimburse the Administrative Agent for account of the Issuing Lender
for the amount of such demand for payment under the Series C Letter of Credit on
the date on which payment is made
- 28 -
by the Issuing Lender to the beneficiary thereunder, without presentment,
demand, protest or other formalities of any kind.
(d) Forthwith upon its receipt of a notice referred to in clause
(c) of this Section 2.03(B), the Company shall advise the Administrative Agent
whether or not the Company intends to borrow hereunder to finance its obligation
to reimburse the Issuing Lender for the amount of the demand for payment and, if
it does, submit a notice of such borrowing as provided in Section 4.05 hereof
(for which purpose a default in the payment of Indebtedness supported by the
Series C Letter of Credit will be deemed not to be a Default hereunder). In the
event that the Company fails to so advise the Administrative Agent, or if the
Company fails to reimburse the Issuing Lender for such demand for payment under
the Series C Letter of Credit by the date of such payment, the Administrative
Agent shall give each Series C Lender prompt notice of the amount of the demand
for payment, specifying such Lender's Series C Commitment Percentage of the
amount of the related demand for payment.
(e) Each Series C Lender (other than the Issuing Lender) shall
pay to the Administrative Agent for account of the Issuing Lender at the
Principal Office in Dollars and in immediately available funds, the amount of
such Lender's Series C Commitment Percentage of any payment under the Series C
Letter of Credit upon notice by the Issuing Lender (through the Administrative
Agent) to such Series C Lender requesting such payment and specifying such
amount; provided that such Series C Lender shall not be obligated to reimburse
the Issuing Bank if such payment is the result of the willful misconduct or
gross negligence of the Issuing Bank in determining that the request or demand
for such payment complied with the terms of the Series C Letter of Credit. Each
such Series C Lender's obligation to make such payments to the Administrative
Agent for account of the Issuing Lender under this clause (e), and the Issuing
Lender's right to receive the same, shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever, including, without
limitation, (i) the failure of any other Series C Lender to make its payment
under this clause (e), the financial condition of the Company, the existence of
any Default or (ii) the termination of the Series C Commitments. Such payment to
the Issuing Lender shall be made without any offset, abatement, withholding or
reduction whatsoever. If any Series C Lender shall default in its obligation to
make such payment to the Administrative Agent for account of the Issuing Lender,
for so long as such default shall continue the Administrative Agent shall at the
request of the Issuing Bank withhold from any payments received by the
Administrative Agent under this Agreement or any Note for account of such Series
C Lender the amount so in default and the Administrative Agent shall pay the
same to the Issuing Lender in satisfaction of such defaulted obligation.
(f) Upon the making of such payment by a Series C Lender to the
Issuing Lender pursuant to clause (e) above in respect of the Series C Letter of
Credit, such Lender shall, automatically and without any further action on the
part of the Administrative Agent, the Issuing Lender or such Lender, acquire (i)
a participation in an amount equal to such payment in the Series C Reimbursement
Obligation owing to the Issuing Lender by the Company hereunder and under the
Series C Letter of Credit Documents relating to the Series C Letter of Credit
and (ii) a participation in a percentage equal to such Lender's Series C
Commitment Percentage in any interest or other amounts payable by the Company
hereunder and under such Series C Letter of Credit Documents in respect of such
Series C Reimbursement Obligation (other than the
- 29 -
commissions, charges, costs and expenses payable to the Issuing Lender pursuant
to clause (g) of this Section 2.03(B)). Upon receipt by the Issuing Lender from
the Company of any payment in respect of any Series C Reimbursement Obligation
or any such interest or other amount (including by way of setoff or application
of proceeds of any collateral security) the Issuing Lender shall promptly pay to
the Administrative Agent for account of each Series C Lender entitled thereto,
such Series C Lender's Series C Commitment Percentage of such payment, each such
payment by the Issuing Lender to be made in the same money and funds in which
received by the Issuing Lender. In the event any payment received by the Issuing
Lender and so paid to the Series C Lenders hereunder is rescinded or must
otherwise be returned by the Issuing Lender, each Series C Lender shall, upon
the request of the Issuing Lender (through the Administrative Agent), repay to
the Issuing Lender (through the Administrative Agent) the amount of such payment
paid to such Lender, with interest as specified in clause (j) of this Section
2.03(B).
(g) The Company shall pay to the Administrative Agent for account
of the Series C Lenders in respect of the Series C Letter of Credit a letter of
credit fee in an amount equal to the product of the Applicable Margin for
Eurodollar Loans times the daily average undrawn amount of the Series C Letter
of Credit for the period from and including the date of issuance of the Series C
Letter of Credit to and including the date the Series C Letter of Credit is
drawn in full, expires or is terminated (such fee to be non-refundable, to be
paid in arrears on each Quarterly Date and on the Series C Commitment
Termination Date and to be calculated, for any day, after giving effect to any
payments made under the Series C Letter of Credit on such day). In addition, the
Company shall pay to the Administrative Agent for account of the Issuing Lender
all commissions, charges, costs and expenses in the amounts customarily charged
by the Issuing Lender from time to time in like circumstances with respect to
the issuance of the Series C Letter of Credit and drawings and other
transactions relating thereto.
(h) Promptly following the end of each calendar month, the
Issuing Lender shall deliver (through the Administrative Agent) to each Series C
Lender and the Company a notice describing the aggregate amount of the Series C
Letter of Credit outstanding at the end of such month. Upon the request of any
Series C Lender from time to time, the Issuing Lender shall deliver any other
information reasonably requested by such Lender with respect to the Series C
Letter of Credit.
(i) The issuance by the Issuing Lender of the Series C Letter of
Credit shall, in addition to the conditions precedent set forth in Section 6
hereof, be subject to the condition precedent that the Company shall have
executed and delivered such applications, agreements and other instruments
relating to the Series C Letter of Credit as the Issuing Lender shall have
reasonably requested consistent with its then current practices and procedures
with respect to letters of credit of the same type, provided that in the event
of any conflict between any such application, agreement or other instrument and
the provisions of this Agreement or any Security Document, the provisions of
this Agreement and the Security Documents shall control.
(j) To the extent that any Series C Lender fails to pay any
amount required to be paid pursuant to clause (e) or (f) of this Section 2.03(B)
on the due date therefor, such Lender shall pay interest to the Issuing Lender
(through the Administrative Agent) on such amount from and including such due
date to but excluding the date such payment is made (i) during the period
- 30 -
from and including such due date to but excluding the date three Business Days
thereafter, at a rate per annum equal to the Federal Funds Rate (as in effect
from time to time) and (ii) thereafter, at a rate per annum equal to the Base
Rate (as in effect from time to time) plus 2%.
(k) The issuance by the Issuing Lender of any modification or
supplement to the Series C Letter of Credit hereunder shall be subject to the
same conditions applicable under this Section 2.03(B) to the issuance of the
Series C Letter of Credit, and no such modification or supplement shall be
issued hereunder unless each Series C Lender shall have consented thereto.
The Company hereby indemnifies and holds harmless each Series C Lender and the
Administrative Agent from and against any and all claims and damages, losses,
liabilities, costs or expenses which such Lender or the Administrative Agent may
incur (or which may be claimed against such Lender or the Administrative Agent
by any Person whatsoever) by reason of or in connection with the execution and
delivery or transfer of or payment or refusal to pay by the Issuing Lender under
the Series C Letter of Credit; provided that the Company shall not be required
to indemnify any Lender or the Administrative Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (x) the willful misconduct or gross negligence of the Issuing Lender
in determining whether a request presented under the Series C Letter of Credit
complied with the terms of the Series C Letter of Credit or (y) in the case of
the Issuing Lender, such Lender's failure to pay under the Series C Letter of
Credit after the presentation to it of a request strictly complying with the
terms and conditions of the Series C Letter of Credit. Nothing in this Section
2.03(B) is intended to limit the other obligations of the Company, any Lender or
the Administrative Agent under this Agreement.
2.04 Changes of Commitments.
----------------------
(a) Series A Commitments.
--------------------
(i) The Series A Commitments shall terminate on the Series A
Commitment Termination Date.
(ii) The Company shall have the right at any time or from time to
time (x) so long as no Series A Loans or Series A Letter of Credit
Liabilities are outstanding, to terminate the Series A Commitments and
(y) to reduce the aggregate unused amount of the Series A Commitments
(for which purpose use of the Series A Commitments shall be deemed to
include the aggregate amount of Series A Letter of Credit Liabilities);
provided that (A) the Company shall give notice of each such termination
or reduction as provided in Section 4.05 hereof and (B) each partial
reduction shall be in an aggregate amount at least equal to $5,000,000
or in multiples of $1,000,000 in excess thereof.
(b) Series B Commitments.
--------------------
(i) The Series B Commitments shall terminate on the Series B
Commitment Termination Date.
- 31 -
(ii) The Company shall have the right at any time or from time to
time (x) so long as no Series B Loans are outstanding, to terminate the
Series B Commitments and (y) to reduce the aggregate amount of the
Series B Commitments; provided that (A) the Company shall give notice of
each such termination or reduction as provided in Section 4.05 hereof;
(B) each partial reduction shall be in an aggregate amount at least
equal to $5,000,000 or in multiples of $1,000,000 in excess thereof; and
(C) to the extent that, after giving effect to any such reduction, the
aggregate principal amount of the Series B Loans would exceed the Series
B Commitments, the Company shall prepay the Series B Loans.
(c) Series C Commitments.
--------------------
(i) The Series C Commitments shall terminate on the Series C
Commitment Termination Date.
(ii) The Company shall have the right at any time or from time to
time (x) so long as no Series C Loans or Series C Letter of Credit
Liabilities are outstanding, to terminate the Series C Commitments and
(y) to reduce the aggregate unused amount of the Series C Commitments
(for which purpose use of the Series C Commitments shall be deemed to
include the aggregate amount of Series C Letter of Credit Liabilities);
provided that (A) the Company shall give notice of each such termination
or reduction as provided in Section 4.05 hereof and (B) each partial
reduction shall be in an aggregate amount at least equal to $5,000,000
or in multiples of $1,000,000 in excess thereof.
(d) All Commitments. The Commitments once terminated or reduced
may not be reinstated.
2.05 Commitment Fee. The Company shall pay to the Administrative
Agent for account of (i) each Series A Lender a commitment fee on the daily
average unused amount of such Lender's Series A Commitment (for which purpose
Series A Letter of Credit Liabilities shall be deemed to be a use of any
Lender's Series A Commitment), (ii) each Series B Lender a commitment fee on the
daily average unused amount of such Lender's Series B Commitment and (iii) each
Series C Lender a commitment fee on the daily average unused amount of such
Lender's Series C Commitment (for which purpose Series C Letter of Credit
Liabilities shall be deemed to be a use of any Lender's Series C Commitment), in
each case for the period from and including the Amendment Effective Date to but
not including the date such Commitment is terminated, at a rate per annum equal
to the Commitment Fee Rate. Accrued commitment fee shall be payable on each
Quarterly Date and on the date the relevant Commitments are terminated.
2.06 Lending Offices. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
2.07 Several Obligations; Remedies Independent. The failure of
any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but neither any Lender nor the Administrative
- 32 -
Agent shall be responsible for the failure of any other Lender to make a Loan to
be made by such other Lender, and no Lender shall have any obligation to the
Administrative Agent (except as provided in Section 4.06 hereof) or any other
Lender for the failure by such Lender to make any Loan required to be made by
such Lender.
2.08 Evidence of Debt.
----------------
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Company to
such Lender resulting from each Loan made or continued hereunder by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(b) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made or continued hereunder, the Class
and Type thereof and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Company to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(c) The entries made in the accounts maintained pursuant to
paragraph (a) or (b) of this Section 2.08 shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Company
to repay the Loans in accordance with the terms of this Agreement.
(d) Any Lender may request that Loans made or continued by it
hereunder be evidenced by a promissory note(s). In such event, the Company, at
its own expense, shall prepare, execute and deliver to such Lender a promissory
note(s) payable to the order of such Lender (or, if requested by such Lender, to
such Lender and its registered assigns) and in a form approved by the
Administrative Agent and such note(s) shall be evidence of such Loans (and all
amounts payable in respect thereof).
2.09 Optional Prepayments and Conversions or Continuations of
Loans. Subject to Sections 4.04 and 5.05 hereof, the Company shall have the
right to prepay Loans, or to Convert Loans of one Type into Loans of another
Type or Continue Loans of one Type as Loans of the same Type, at any time or
from time to time, provided that the Company shall give the Administrative Agent
notice of each such prepayment, Conversion or Continuation as provided in
Section 4.05 hereof (and, upon the date specified in any such notice of
prepayment, the amount to be prepaid shall become due and payable hereunder) and
provided further that any prepayment of the principal of the Series B Loans
shall be applied to reduce the then remaining installments thereof on a pro rata
basis (based on the then remaining principal amount of each such installment).
Notwithstanding the foregoing, and without limiting the rights and remedies of
the Lenders under Section 9 hereof, in the event that any Event of Default shall
have occurred and be continuing, the Administrative Agent may (and at the
request of the Majority Lenders shall) suspend the right of the Company to
Convert any Loan into a Eurodollar Loan, or to Continue any Loan as a Eurodollar
Loan, in which event all Loans shall be Converted (on the
- 33 -
last day(s) of the respective Interest Periods therefor) or Continued, as the
case may be, as Base Rate Loans.
2.10 Mandatory Prepayments and Reductions of Commitments.
---------------------------------------------------
(a) Series C Commitments. If the amount of the Series C Letter of
Credit is reduced, the aggregate amount of the Series C Commitments shall
automatically reduce by an equal amount. Upon the expiry or drawing under the
Series C Letter of Credit, the aggregate amount of the Series C Commitments
shall automatically reduce in the amount, if any, by which (i) the amount of the
Series C Letter of Credit immediately prior to such expiry or drawing exceeds
(ii) the amount of the drawing, if any.
(b) Casualty Events. Unless the Company or any of its
Subsidiaries, as the case may be, shall have irrevocably committed to repair or
replace any Property of the Company or such Subsidiary affected by a Casualty
Event, on the date 30 days following the receipt by the Company of the proceeds
of insurance, condemnation award or other compensation in respect of such
Casualty Event affecting such Property (or upon such earlier date as the Company
or such Subsidiary, as the case may be, shall have determined not to repair or
replace the Property affected by such Casualty Event), the Company shall prepay
the Loans (and/or provide cover for Letter of Credit Liabilities as specified in
clause (f) below), and the Commitments shall be subject to automatic reduction,
in an aggregate amount, if any, equal to 75% of the Net Available Proceeds of
such Casualty Event not theretofore applied to the repair or replacement of such
Property (or reserved by the Company for application to such purposes), such
prepayment and reduction to be effected in each case in the manner and to the
extent specified in clause (e) of this Section 2.10. Nothing in this clause (b)
shall be deemed to limit any obligation of the Company or any of its
Subsidiaries pursuant to any of the Security Documents to remit to a collateral
or similar account (including, without limitation, the Collateral Account)
maintained by the Administrative Agent pursuant to any of the Security Documents
the proceeds of insurance, condemnation award or other compensation received in
respect of any Casualty Event.
(c) Recapture of Proceeds from Asset Sales. In the event of a
Disposition, the Company shall deposit 75% of the Net Available Proceeds
therefrom into the Collateral Account no later than five Business Days after
receipt thereof; provided that prior to such deposit the Company may invest such
Net Available Proceeds, or after such deposit the Company may withdraw such Net
Available Proceeds from the Collateral Account within 270 days after such
Disposition so long as immediately thereafter such Net Available Proceeds are
invested, in Property to be used by the Company or any of its Subsidiaries in
the lines of business in which the Company or any of its Subsidiaries is engaged
as of the Restatement Date or in any business related thereto. No later than 270
days following the occurrence of any such Disposition, the Company will deliver
to the Lenders a statement, certified by the chief financial officer of the
Company, in form and detail satisfactory to the Administrative Agent, of the
amount of the Net Available Proceeds of such Disposition not applied as
contemplated by the immediately preceding sentence and, on the first Recapture
Date thereafter, the Company shall withdraw the remaining Net Available Proceeds
from the Collateral Account and prepay the Loans (and/or provide cover for
Letter of Credit Liabilities as specified in clause (f) below), and the
Commitments shall be subject to automatic reduction, in an aggregate amount
equal to 75% of
- 34 -
the Net Available Proceeds received or which become available for prepayment or
reduction during such Recapture Period ending on such Recapture Date, such
prepayment and reduction to be effected in each case in the manner and to the
extent specified in clause (e) of this Section 2.10. In addition to the
foregoing, to the extent the remaining 25% of the Net Available Proceeds from
such Disposition would become "Excess Proceeds" (as defined in the Senior
Subordinated Indenture[s]) under clause (b) of Section 1016 of the Senior
Subordinated Indenture[s] (the "Remainder Amount"), the Company shall,
immediately prior to such Remainder Amount becoming "Excess Proceeds" as
aforesaid, prepay the Loans (and/or provide cover for Letter of Credit
Liabilities as specified in clause (f) below), and the Commitments shall be
subject to automatic reduction, in an aggregate amount equal to such Remainder
Amount, such prepayment and reduction to be effected in each case in the manner
and to the extent specified in clause (e) of this Section 2.10. Nothing in this
Section 2.10(c) shall be deemed to excuse or otherwise limit the obligation of
the Company to obtain the consent of the Majority Lenders pursuant to Section
8.05 hereof to any Disposition not otherwise permitted hereunder.
(d) Reversions. Without limiting the obligation of the Company
under Section 8.01(c) hereof, upon any Reversion the Company shall prepay the
Loans (and/or provide cover for Letter of Credit Liabilities as specified in
clause (f) below), and the Commitments shall be subject to automatic reduction,
in an aggregate amount equal to 75% of the Net Available Proceeds thereof, such
prepayment and reduction to be effected in each case in the manner and to the
extent specified in clause (e) of this Section 2.10.
(e) Application. Prepayments and reductions of Commitments
described in clauses (b) through (d) of this Section 2.10 shall be effected as
follows:
(i) first, the Series B Loans shall be prepaid in an amount equal
to the prepayment or reduction specified in such clauses (such
prepayments shall be applied first to Base Rate Loans and then to
Eurodollar Loans) and shall be applied to the installments of the Series
B Loans on a pro rata basis (based on the then remaining principal
amount of each such installment); and
(ii) second, any excess over the amount referred to in the
foregoing clause (i) shall automatically reduce the Series A Commitments
(and to the extent that, after giving effect to such reduction, the
aggregate principal amount of Series A Loans, together with the
aggregate amount of all Series A Letter of Credit Liabilities, would
exceed the Series A Commitments, the Company shall, first, prepay Series
A Loans (such prepayments shall be applied first to Base Rate Loans and
then to Eurodollar Loans) and, second, provide cover for Series A Letter
of Credit Liabilities as specified in clause (f) below, in an aggregate
amount equal to such excess).
(f) Cover for Letter of Credit Liabilities. In the event that the
Company shall be required pursuant to this Section 2.10 to provide cover for
Series A Letter of Credit Liabilities, the Company shall effect the same by
paying to the Administrative Agent immediately available funds in an amount
equal to the required amount, which funds shall be retained by the
Administrative Agent in the Collateral Account (as provided therein as
collateral security in the first instance for the Series A Letter of Credit
Liabilities) until such time as the Series A Letters
- 35 -
of Credit shall have been terminated and all of the Series A Letter of Credit
Liabilities paid in full.
Section 3. Payments of Principal and Interest.
----------------------------------
3.01 Repayment of Loans.
------------------
(a) The Company hereby promises to pay to the Administrative
Agent for account of each Series A Lender the entire outstanding principal
amount of such Lender's Series A Loans, and each Series A Loan shall mature, on
the Series A Commitment Termination Date.
(b) Subject to Sections 2.09 and 2.10 hereof, the Company hereby
promises to pay to the Administrative Agent for account of each Series B Lender
the principal amount of each of such Lender's Series B Loans in twenty (20)
consecutive quarterly installments, commencing on the Quarterly Date falling
approximately three (3) months after the Series B Commitment Termination Date
and on each of the nineteen (19) Quarterly Dates thereafter, the first eight (8)
of which shall each be in an amount equal to 2.5% of the initial principal
amount of such Series B Loan, the next four (4) of which shall each be in an
amount equal to 4% of the initial principal amount of such Series B Loan, the
next four (4) of which shall each be in an amount equal to 7% of the initial
principal amount of such Series B Loan, and the last four (4) of which shall
each be in an amount equal to 9% of the initial principal amount of such Series
B Loan.
(c) The Company hereby promises to pay to the Administrative
Agent for account of each Series C Lender the entire outstanding principal
amount of such Lender's Series C Loans, and each Series C Loan shall mature, on
the Series C Commitment Termination Date.
3.02 Interest. The Company hereby promises to pay to the
Administrative Agent for account of each Lender interest on the unpaid principal
amount of each Loan made by such Lender for the period from and including the
date of such Loan to but excluding the date such Loan shall be paid in full, at
the following rates per annum:
(a) during such periods as such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) plus the Applicable Margin (if any)
and
(b) during such periods as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such Loan for
such Interest Period plus the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay to the
Administrative Agent for account of each Lender interest at the applicable
Post-Default Rate on any principal of any Loan made by such Lender, on any
Reimbursement Obligation held by such Lender and on any other amount payable by
the Company hereunder or under the Notes held by such Lender to or for account
of such Lender, which shall not be paid in full when due (whether at stated
maturity, by acceleration, by mandatory prepayment or otherwise), for the period
from and including the due date thereof to but excluding the date the same is
paid in full. Accrued interest on each Loan shall be payable (i) in the case of
a Base Rate Loan, quarterly on the Quarterly
- 36 -
Dates, (ii) in the case of a Eurodollar Loan, on the last day of each Interest
Period therefor and, if such Interest Period is longer than three months, at
three-month intervals following the first day of such Interest Period, and (iii)
in the case of any Loan, upon the payment or prepayment thereof or the
Conversion of such Loan to a Loan of another Type (but only on the principal
amount so paid, prepaid or Converted), except that interest payable at the
Post-Default Rate shall be payable from time to time on demand. Promptly after
the determination of any interest rate provided for herein or any change
therein, the Administrative Agent shall give notice thereof to the Lenders to
which such interest is payable and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
------------------------------------------------
4.01 Payments.
--------
(a) Except to the extent otherwise provided herein, all payments
of principal, interest, Reimbursement Obligations and other amounts to be made
by the Company under this Agreement and the Notes, and, except to the extent
otherwise provided therein, all payments to be made by the Company under any
other Basic Document, shall be made in Dollars, in immediately available funds,
without deduction, set-off or counterclaim, to the Administrative Agent to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Company, not later than 1:00 p.m. New York time on the
date on which such payment shall become due (each such payment made after such
time on such due date to be deemed to have been made on the next succeeding
Business Day).
(b) Any Lender for whose account any such payment is to be made
may (but shall not be obligated to) debit the amount of any such payment that is
not made by such time to any ordinary deposit account of the Company with such
Lender (with notice to the Company and the Administrative Agent).
(c) The Company shall, at the time of making each payment under
this Agreement or any Note for account of any Lender, specify to the
Administrative Agent (which shall so notify the intended recipient(s) thereof)
the Loans, Reimbursement Obligations or other amounts payable by the Company
hereunder to which such payment is to be applied (and in the event that the
Company fails to so specify, or if an Event of Default has occurred and is
continuing, the Administrative Agent may distribute such payment to the Lenders
for application in such manner as it or the Majority Lenders, subject to Section
4.02 hereof, may determine to be appropriate).
(d) Except to the extent otherwise provided in the last sentence
of Sections 2.03(A)(e) and 2.03(B)(e) hereof, each payment received by the
Administrative Agent under this Agreement or any Note for account of any Lender
shall be paid by the Administrative Agent promptly to such Lender, in
immediately available funds, for account of such Lender's Applicable Lending
Office for the Loan or other obligation in respect of which such payment is
made.
- 37 -
(e) If the due date of any payment under this Agreement or any
Note would otherwise fall on a day that is not a Business Day, such date shall
be extended to the next succeeding Business Day, and interest shall be payable
for any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing of Loans of a particular Class from the Lenders under
Section 2.01 hereof shall be made from the relevant Lenders, each payment of
commitment fee under Section 2.05 hereof in respect of Commitments of a
particular Class shall be made for account of the relevant Lenders, and each
termination or reduction of the amount of the Commitments of a particular Class
under Section 2.04 hereof and under Section 2.10(e) hereof shall be applied to
the respective Commitments of such Class of the relevant Lenders, pro rata
according to the amounts of their respective Commitments of such Class; (b) the
making, Conversion and Continuation of Series A Loans, Series B Loans and Series
C Loans of a particular Type (other than Conversions provided for by Section
5.04 hereof) shall be made pro rata among the relevant Lenders according to the
amounts of their respective Series A, Series B and Series C Commitments (in the
case of making of Loans) or their respective Series A, Series B and Series C
Loans (in the case of Conversions and Continuations of Loans) and the then
current Interest Period for each Eurodollar Loan shall be coterminous; (c) each
payment or prepayment of principal of Series A Loans, Series B Loans or Series C
Loans by the Company shall be made for account of the relevant Lenders pro rata
in accordance with the respective unpaid principal amounts of the Loans of such
Class held by them; and (d) each payment of interest on Series A Loans, Series B
Loans and Series C Loans by the Company shall be made for account of the
relevant Lenders pro rata in accordance with the amounts of interest on such
Loans then due and payable to the respective Lenders.
4.03 Computations. Interest on Eurodollar Loans and Reimbursement
Obligations and commitment fee and letter of credit fee shall be computed on the
basis of a year of 360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable and interest
on Base Rate Loans shall be computed on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
Notwithstanding the foregoing, for each date that the Base Rate is calculated by
reference to the Federal Funds Rate, interest on Base Rate Loans shall be
computed on the basis of a year of 360 days and actual days elapsed.
4.04 Minimum Amounts. Except for mandatory prepayments made
pursuant to Section 2.10 hereof and Conversions or prepayments made pursuant to
Section 5.04 hereof, (i) each borrowing, Conversion and partial prepayment of
principal of Series A Loans shall be in multiples of $1,000,000, (ii) each
borrowing, Conversion or partial prepayment of principal of Series B Loans shall
be in multiples of $1,000,000 and (iii) each borrowing, Conversion or partial
prepayment of principal of Series C Loans shall be in multiples of $100,000
(borrowings, Conversions or prepayments of or into Loans of different Types, or,
in the case of Eurodollar Loans, having different Interest Periods at the same
time hereunder to be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period). Anything in
this Agreement to the contrary notwithstanding, the aggregate
- 38 -
principal amount of Eurodollar Loans having the same Interest Period shall be in
an amount at least equal to $5,000,000 or in multiples of $1,000,000 in excess
thereof and, if any Eurodollar Loans would otherwise be in a lesser principal
amount for any period, such Loans shall be Base Rate Loans during such period.
4.05 Certain Notices. Notices by the Company to the
Administrative Agent of terminations or reductions of the Commitments, of
borrowings, Conversions, Continuations and optional prepayments of Loans and of
Classes of Loans and of Types of Loans and of the duration of Interest Periods
shall be irrevocable and shall be effective only if received by the
Administrative Agent not later than 10:00 a.m. New York time on the number of
Business Days prior to the date of the relevant termination, reduction,
borrowing, Conversion, Continuation or prepayment or the first day of such
Interest Period specified below:
Number of Business Notice Days Prior
--------------------------------------------- ----------------------
Termination or reduction 3
of Commitments
Borrowing or prepayment of, 1
or Conversions into,
Base Rate Loans
Borrowing or prepayment of, 3
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans
provided that a notice to borrow Base Rate Loans to finance the Series C
Reimbursement Obligations may be given on a same day basis.
Each such notice of termination or reduction shall specify the amount and the
Class of the Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion, Continuation or optional prepayment shall specify the
Class of Loans to be borrowed, Converted, Continued or prepaid and the amount
(subject to Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business Day). Each such
notice of the duration of an Interest Period shall specify the Loans to which
such Interest Period is to relate. The Administrative Agent shall promptly
notify the Lenders of the contents of each such notice. In the event that the
Company fails to select the Type of Loan, or the duration of any Interest Period
for any Eurodollar Loan, within the time period and otherwise as provided in
this Section 4.05, such Loan (if outstanding as a Eurodollar Loan) will be
automatically Converted into a Base Rate Loan on the last day of the then
current Interest Period for such Loan or (if outstanding as a Base Rate Loan)
will remain as, or (if not then outstanding) will be made as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Company (the
"Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a
- 39 -
Lender) the proceeds of a Loan to be made by such Lender, or a participation in
a Letter of Credit drawing to be acquired by such Lender, hereunder or (in the
case of the Company) a payment to the Administrative Agent for account of one or
more of the Lenders hereunder (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient(s) on such date; and, if the Payor
has not in fact made the Required Payment to the Administrative Agent, the
recipient(s) of such payment shall, on demand, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date (the "Advance Date") such amount
was so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such day and, if such recipient(s) shall fail promptly to
make such payment, the Administrative Agent shall be entitled to recover such
amount, on demand, from the Payor, together with interest as aforesaid, provided
that if neither the recipient(s) nor the Payor shall return the Required Payment
to the Administrative Agent within three Business Days of the Advance Date,
then, retroactively to the Advance Date, the Payor and the recipient(s) shall
each be obligated to pay interest on the Required Payment as follows:
(i) if the Required Payment shall represent a payment to be made
by the Company to the Lenders, the Company and the recipient(s) shall
each be obligated retroactively to the Advance Date to pay interest in
respect of the Required Payment at the Post-Default Rate (and, in case
the recipient(s) shall return the Required Payment to the Administrative
Agent, without limiting the obligation of the Company under Section 3.02
hereof to pay interest to such recipient(s) at the Post-Default Rate in
respect of the Required Payment) and
(ii) if the Required Payment shall represent proceeds of a loan
to be made by the Lenders to the Company, the Payor and the Company
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the rate of interest
provided for such Required Payment pursuant to Section 3.02 hereof (and,
in case the Company shall return the Required Payment to the
Administrative Agent, without limiting any claim the Company may have
against the Payor in respect of the Required Payment).
- 40 -
4.07 Sharing of Payments, Etc.
-------------------------
(a) The Company agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its option, to offset balances
held by it for account of the Company at any of its offices, in Dollars or in
any other currency, against any principal of or interest on any of such Lender's
Loans, Reimbursement Obligations or any other amount payable to such Lender
hereunder, that is not paid when due (regardless of whether such balances are
then due to the Company), in which case it shall promptly notify the Company and
the Administrative Agent thereof, provided that such Lender's failure to give
such notice shall not affect the validity thereof.
(b) If any Lender shall obtain from the Company payment of any
principal of or interest on any Loan or Letter of Credit Liability of any Class
owing to it or payment of any other amount under this Agreement or any other
Basic Document through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise (other than from the Administrative
Agent as provided herein), and, as a result of such payment, such Lender shall
have received a greater percentage of the principal of or interest on the Loans
or Letter of Credit Liabilities of such Class or such other amounts then due
hereunder or thereunder by the Company to such Lender than the percentage
received by any other Lender, it shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans or Letter of Credit Liabilities of such Class or such
other amounts, respectively, owing to such other Lenders (or in interest due
thereon, as the case may be) in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all the Lenders shall
share the benefit of such excess payment (net of any expenses that may be
incurred by such Lender in obtaining or preserving such excess payment) pro rata
in accordance with the unpaid principal of and/or interest on the Loans or
Letter of Credit Liabilities of such Class or such other amounts, respectively,
owing to each of the Lender. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans or other amounts (as the case
may be) owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and retain
the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Company. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a set-off to which this Section 4.07 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section 4.07 to
share in the benefits of any recovery on such secured claim.
- 41 -
Section 5. Yield Protection, Etc.
----------------------
5.01 Additional Costs.
----------------
(a) The Company shall pay directly to each Lender from time to
time such amounts as such Lender may determine to be necessary to compensate
such Lender for any costs that such Lender determines are attributable to its
making or maintaining of any Eurodollar Loans or its obligation to make any
Eurodollar Loans hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any of such Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change that:
(i) changes the basis of taxation of any amounts payable to such
Lender under this Agreement or its Notes in respect of any of such Loans
(other than taxes imposed on or measured by the overall net income of
such Lender or of its Applicable Lending Office for any of such Loans by
the jurisdiction in which such Lender has its principal office or such
Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender (including, without limitation, any of such
Loans or any deposits referred to in the definition of "Eurodollar Base
Rate" in Section 1.01 hereof), or any commitment of such Lender
(including, without limitation, the Commitments of such Lender
hereunder); or
(iii) imposes any other condition affecting this Agreement or its
Notes (or any of such extensions of credit or liabilities) or its
Commitments.
If any Lender requests compensation from the Company under this Section 5.01(a),
the Company may, by notice to such Lender (with a copy to the Administrative
Agent), suspend the obligation of such Lender thereafter to make or Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the
Regulatory Change giving rise to such request ceases to be in effect (in which
case the provisions of Section 5.04 hereof shall be applicable), provided that
such suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) Without limiting the effect of the provisions of paragraph
(a) of this Section 5.01, in the event that, by reason of any Regulatory Change,
any Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender that includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender that includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets that it may hold, then, if such Lender so
elects by notice to the Company (with a copy to the Administrative Agent), the
obligation of such Lender to make or Continue, or to Convert Base
- 42 -
Rate Loans into, Eurodollar Loans hereunder shall be suspended until such
Regulatory Change ceases to be in effect (in which case the provisions of
Section 5.04 hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Company shall pay directly to
each Lender from time to time on request such amounts as such Lender may
determine to be necessary to compensate such Lender (or, without duplication,
the bank holding company of which such Lender is a subsidiary) for any costs
that it determines are attributable to the maintenance by such Lender (or any
Applicable Lending Office or such bank holding company), pursuant to any law or
regulation or any interpretation, directive or request (whether or not having
the force of law and whether or not failure to complete therewith would be
unlawful) of any court or governmental or monetary authority (i) following any
Regulatory Change or (ii) implementing any risk-based capital guideline or other
requirement (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) heretofore or hereafter issued by
any government or governmental or supervisory authority implementing at the
national level the Basle Accord (including, without limitation, the Final
Risk-Based Capital Guidelines of the Board of Governors of the Federal Reserve
System (12 C.F.R. Part 208, Appendix A; 00 X.X.X. Xxxx 000, Xxxxxxxx X) and the
Final Risk-Based Capital Guidelines of the Office of the Comptroller of the
Currency (12 C.F.R. Part 3, Appendix A)), of capital in respect of its
Commitments or Loans (such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or equity of such
Lender (or any Applicable Lending Office or such bank holding company) to a
level below that which such Lender (or any Applicable Lending Office or such
bank holding company) could have achieved but for such law, regulation,
interpretation, directive or request). For purposes of this Section 5.01(c) and
Section 5.06 hereof, "Basle Accord" shall mean the proposals for risk-based
capital framework described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended, modified
and supplemented and in effect from time to time or any replacement thereof.
(d) Each Lender shall notify the Company of any event occurring
after the Amendment Effective Date entitling such Lender to compensation under
paragraph (a) or (c) of this Section 5.01 as promptly as practicable, but in any
event within 45 days, after such Lender obtains actual knowledge thereof;
provided that (i) if any Lender fails to give such notice within 45 days after
it obtains actual knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 5.01 in respect of any costs
resulting from such event, only be entitled to payment under this Section 5.01
for costs incurred from and after the date 45 days prior to the date that such
Lender does give such notice and (ii) each Lender will designate a different
Applicable Lending Office for the Loans of such Lender affected by such event if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender, except that such Lender shall have no obligation
to designate an Applicable Lending Office located in the United States of
America. Each Lender will furnish to the Company a certificate setting forth the
basis and amount of each request by such Lender for compensation under paragraph
(a) or (c) of this Section 5.01. Determinations and allocations by any Lender
for purposes of this Section 5.01 of the effect of any Regulatory Change
pursuant to paragraph (a) or (b) of this Section 5.01, or of the effect of
capital maintained pursuant to paragraph (c) of this Section 5.01,
- 43 -
on its costs or rate of return of maintaining Loans or its obligation to make
Loans, or on amounts receivable by it in respect of Loans, and of the amounts
required to compensate such Lender under this Section 5.01, shall be conclusive,
provided that such determinations and allocations are made on a reasonable
basis.
5.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Base Rate for any Interest Period:
(a) the Administrative Agent reasonably determines, which
determination shall be conclusive, that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Base Rate" in
Section 1.01 hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of interest for Eurodollar
Loans as provided herein; or
(b) if the related Loans are Series A Loans, the Majority Series
A Lenders or, if the related Loans are Series B Loans, the Majority Series B
Lenders or, if the related Loans are Series C Loans, the Majority Series C
Lenders reasonably determine, which determination shall be conclusive, and
notify the Administrative Agent that the relevant rates of interest referred to
in the definition of "Eurodollar Base Rate" in Section 1.01 hereof upon the
basis of which the rate of interest for Eurodollar Loans for such Interest
Period is to be determined are not likely adequately to cover the cost to such
Lenders of making or maintaining Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Company and each Lender prompt
notice thereof and, so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Eurodollar Loans, to Continue
Eurodollar Loans or to Convert Base Rate Loans into Eurodollar Loans, and the
Company shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans
into Base Rate Loans in accordance with Section 2.09 hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder, then such Lender shall promptly notify the Company thereof
(with a copy to the Administrative Agent) and such Lender's obligation to make
or Continue, or to Convert Loans of any other Type into, Eurodollar Loans shall
be suspended until such time as such Lender may again make and maintain
Eurodollar Loans (in which case the provisions of Section 5.04 hereof shall be
applicable).
5.04 Treatment of Affected Loans. If the obligation of any Lender
to make Eurodollar Loans or to Continue, or to Convert Base Rate Loans into,
Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03 hereof,
such Lender's Eurodollar Loans shall be automatically Converted into Base Rate
Loans on the last day(s) of the then current Interest Period(s) for Eurodollar
Loans (or, in the case of a Conversion required by Section 5.01(b) or 5.03
hereof, on such earlier date as such Lender may specify to the Company with a
copy to the Administrative Agent) and, unless and until such Lender gives notice
as provided below that
- 44 -
the circumstances specified in Section 5.01 or 5.03 hereof that gave rise to
such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been
so Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Eurodollar Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be Converted
into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the Administrative
Agent that the circumstances specified in Section 5.01 or 5.03 hereof that gave
rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
Section 5.04 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, Types and Interest
Periods) in accordance with their respective Commitments.
5.05 Compensation.
The Company shall pay to the Administrative Agent for account of each Lender,
upon the request of such Lender through the Administrative Agent, such amount or
amounts as shall be sufficient (in the reasonable opinion of such Lender) to
compensate it for any loss, cost or expense incurred by it that such Lender
determines is attributable to:
(a) any payment, mandatory or optional prepayment or Conversion
of a Eurodollar Loan made by such Lender for any reason (including, without
limitation, the acceleration of the Loans pursuant to Section 9 hereof) on a
date other than the last day of the Interest Period for such Loan; or
(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in Section
6 hereof to be satisfied) to borrow a Eurodollar Loan from such Lender on the
date for such borrowing specified in the relevant notice of borrowing given
pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid or
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan that would have commenced on the date specified
for such borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the amount of interest
- 45 -
that otherwise would have accrued on such principal amount at a rate per annum
equal to the interest component of the amount such Lender would have bid in the
London interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities comparable to such
period (as reasonably determined by such Lender).
5.06 Additional Costs in Respect of Letters of Credit. Without
limiting the obligations of the Company under Section 5.01 hereof (but without
duplication), if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any government
or governmental or supervisory authority implementing at the national level the
Basle Accord there shall be imposed, modified or deemed applicable any tax,
reserve, special deposit, capital adequacy or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder and the result shall be to increase the cost to any Lender or
Lenders of issuing (or purchasing or maintaining participations in) or
maintaining its obligation hereunder to issue (or purchase participations in)
any Letter of Credit hereunder or reduce any amount receivable by any Lender
hereunder in respect of any Letter of Credit (which increases in cost, or
reductions in amount receivable, shall be the result of such Lender's or
Lenders' reasonable allocation of the aggregate of such increases or reductions
resulting from such event), then, upon demand by such Lender or Lenders (through
the Administrative Agent), the Company shall pay immediately to the
Administrative Agent for account of such Lender or Lenders, from time to time as
specified by such Lender or Lenders (through the Administrative Agent), such
additional amounts as shall be sufficient to compensate such Lender or Lenders
(through the Administrative Agent) for such increased costs or reductions in
amount. A statement as to such increased costs or reductions in amount incurred
by any such Lender or Lenders, submitted by such Lender or Lenders to the
Company shall be conclusive in the absence of manifest error as to the amount
thereof, provided that the determination of such increased costs or reductions
are made on a reasonable basis.
5.07 U.S. Taxes.
----------
(a) The Company agrees to pay to each Lender that is not a U.S.
Person such additional amounts as are necessary in order that the net payment of
any amount due to such non-U.S. Person hereunder after deduction for or
withholding in respect of any U.S. Taxes imposed with respect to such payment
(or in lieu thereof, payment of such U.S. Taxes by such non-U.S. Person), will
not be less than the amount stated herein to be then due and payable, provided
that the foregoing obligation to pay such additional amounts shall not apply:
(i) to any payment to a Lender hereunder unless such Lender is,
on the Amendment Effective Date (or on the date it becomes a Lender as
provided in Section 11.06(b) hereof) and on the date of any change in
the Applicable Lending Office of such Lender, either entitled to submit
a Form 1001 (relating to such Lender and entitling it to a complete
exemption from withholding on all interest to be received by it
hereunder in respect of the Loans) or Form 4224 (relating to all
interest to be received by such Lender hereunder in respect of the
Loans), or
(ii) to any U.S. Taxes imposed solely by reason of the failure by
such non-U.S. Person to comply with applicable certification,
information, documentation or
- 46 -
other reporting requirements concerning the nationality, residence,
identity or connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or regulation
of the United States of America as a precondition to relief or exemption
from such U.S. Taxes.
For the purposes of this Section 5.07(a), (w) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a claim
to which such Form relates), (y) "U.S. Person" shall mean a citizen, national or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under any laws of the United States of
America, or any estate or trust that is subject to Federal income taxation
regardless of the source of its income and (z) "U.S. Taxes" shall mean any
present or future tax, assessment or other charge or levy imposed by or on
behalf of the United States of America or any taxing authority thereof or
therein.
(b) Within 30 days after paying any amount to the Administrative
Agent or any Lender from which it is required by law to make any deduction or
withholding, and within 30 days after it is required by law to remit such
deduction or withholding to any relevant taxing or other authority, the Company
shall deliver to the Administrative Agent for delivery to such non-U.S. Person
evidence satisfactory to such Person of such deduction, withholding or payment
(as the case may be).
Section 6. Conditions Precedent.
--------------------
6.01 Conditions to Effectiveness. The effectiveness of the
amendment and restatement of the Existing Credit Agreement provided for hereby
is subject to the receipt by the Administrative Agent of the following
documents, each of which shall be satisfactory to the Administrative Agent (and
to the extent specified below, to each Lender) in form and substance:
(a) Corporate Documents. The following documents, each certified
as indicated below:
(i) a copy of the charter, as amended and in effect, of the
Company certified as of a recent date by the Secretary of State of the
State of Delaware (or, if there have been no modifications to such
charter from the copy thereof delivered by the Company pursuant to the
Existing Credit Agreement, a certificate of the Secretary or an
Assistant Secretary of the Company to that effect), and a certificate
from such Secretary of State dated as of a recent date as to the good
standing of and charter documents filed by the Company;
(ii) a certificate of the Secretary or an Assistant Secretary of
the Company, dated the Amendment Effective Date and certifying (A) that
attached thereto is a true and
- 47 -
complete copy of the by-laws of the Company as amended and in effect at
all times from the date on which the resolutions referred to in clause
(B) below were adopted to and including the date of such certificate (or
if there have been no modifications to such by-laws from the copy
thereof delivered by the Company pursuant to the Existing Credit
Agreement, a certificate of the Secretary or an Assistant Secretary of
the Company to that effect), (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board of directors of
the Company authorizing the execution, delivery and performance of the
amendment and restatement of the Existing Credit Agreement and such
other of the Basic Documents to which the Company is or is intended to
be a party and the extensions of credit hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full
force and effect, (C) that the charter of the Company has not been
amended since the date of the certification thereto furnished pursuant
to clause (i) above, and (D) as to the incumbency and specimen signature
of each officer of the Company executing the amendment and restatement
of the Existing Credit Agreement and such other of the Basic Documents
to which the Company is intended to be a party and each other document
to be delivered by the Company from time to time in connection therewith
(and the Administrative Agent and each Lender may conclusively rely on
such certificate until it receives notice in writing from the Company to
the contrary); and
(iii) a certificate of another officer of the Company as to the
incumbency and specimen signature of the Secretary or Assistant
Secretary, as the case may be, of the Company.
(b) Officer's Certificate. A certificate of a senior officer of
the Company, dated the Amendment Effective Date, to the effect that (i) no
Default shall have occurred and be continuing and (ii) the representations and
warranties made by the Company in Section 7 hereof, and in each of the other
Basic Documents, are true and correct on and as of the Amendment Effective Date
with the same force and effect as if made on and as of such date (or, if any
such representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).
(c) Opinion of Counsel to the Company. An opinion, dated the
Amendment Effective Date, of Ropes & Xxxx, counsel to the Company, in form and
substance satisfactory to the Administrative Agent (and the Company hereby
instructs such counsel to deliver such opinions to the Lenders and the
Administrative Agent).
(d) Opinion of Special New York Counsel to Chase. An opinion,
dated the Amendment Effective Date, of Milbank, Tweed, Xxxxxx & XxXxxx, special
New York counsel to Chase, in form and substance satisfactory to the
Administrative Agent.
(e) Financial Information. True, correct and complete copies of
the financial statements, projections and other information referred to in
Section 7.02 hereof.
- 48 -
(f) Approvals and Consents. Evidence that all necessary
governmental and third party filings, licenses, permits, consents and approvals
have been obtained by the Company and are in full force and effect on the
Amendment Effective Date.
(g) Payment of Fees and Expenses. Evidence that the reasonable
fees and expenses of Milbank, Tweed, Xxxxxx & XxXxxx, special New York counsel
to Chase in connection with the negotiation, preparation, execution and delivery
of the amendment and restatement of the Existing Credit Agreement and the Notes
and the other Basic Documents and the extensions of credit hereunder (to the
extent that statements for such fees and expenses have been delivered to the
Company) shall have been paid in full.
(h) Governmental Proceedings; Etc. Evidence that no litigation or
similar proceeding is threatened by any governmental agency or authority or any
other person with respect to the execution and delivery of the amendment and
restatement of the Existing Credit Agreement, the Notes and the other Basic
Documents, and the consummation of the transactions herein or therein
contemplated which, in each case, the Lenders shall reasonably determine is
likely to have a material adverse effect on (i) the assets, business,
operations, or condition (financial or otherwise) or prospects of the Company
and its Subsidiaries taken as a whole or (ii) the timely payment of the Loans
and interest thereon or the enforceability of the Basic Documents or the rights
and remedies thereunder.
(i) Leverage Ratio. A certificate of a senior officer of the
Company, dated the Amendment Effective Date, setting forth the Leverage Ratio as
at the Amendment Effective Date.
(j) Security Documents. Written confirmation from In-Flight that
In-Flight consents to this Agreement and agrees that references in the In-flight
Guarantee and Security Agreement to the "Credit Agreement" include this
Agreement and that all references to the "Guaranteed Obligations" shall include
obligations of the Company in respect of Series C Loans and Series C
Reimbursement Obligations, together with stock certificates representing all of
the shares not previously delivered of the Persons listed on Annex 2 hereto.
(k) Other Documents. Such other documents as the Administrative
Agent or any Lender or special New York counsel to Chase may reasonably request.
6.02 Initial and Subsequent Extensions of Credit. The obligation
of the Lenders to make any Loan or otherwise extend any credit to the Company
upon the occasion of each borrowing or other extension of credit hereunder
(including the initial borrowing) is subject to the further conditions precedent
that:
(a) Both immediately prior to the making of such Loan or other
extension of credit and also after giving effect thereto and to the intended use
thereof: (i) no Default shall have occurred and be continuing; (ii) the
representations and warranties made by the Company in Section 7 hereof, and in
each of the other Basic Documents, shall be true and correct on and as of the
date of the making of such Loan or other extension of credit with the same force
and effect as if made on and as of such date (or, if any such representation or
warranty is expressly stated to
- 49 -
have been made as of a specific date, as of such specific date). Each notice of
borrowing or request for the issuance of a Letter of Credit by the Company
hereunder shall constitute a certification by the Company to the effect set
forth in the preceding sentence (both as of the date of such notice or request
and, unless the Company otherwise notifies the Administrative Agent prior to the
date of such borrowing or issuance, as of the date of such borrowing or
issuance); and
(b) The Administrative Agent shall have received a certificate of
a senior financial officer of the Company setting forth in reasonable detail the
computations necessary to demonstrate that both immediately prior to the making
of such Loan or other extension of credit and immediately after giving effect
thereto, the Company is or will be in compliance with Section 1010 of the Senior
Subordinated Indentures.
Section 7. Representations and Warranties. The Company represents
and warrants to the Lenders that:
7.01 Corporate Existence. Each of the Company and its
Subsidiaries: (a) is a corporation, partnership or other entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could have a Material
Adverse Effect.
7.02 Financial Condition.
-------------------
(a) The Company has heretofore furnished to each of the Lenders
(i) the consolidated balance sheet of the Company and its Subsidiaries as at
February 28, 1998 and the related consolidated statements of operations,
stockholders' equity and cash flows of the Company and its Subsidiaries for the
fiscal year ended on said date, with the opinion thereon of Deloitte & Touche,
and (ii) the consolidated balance sheet of the Company and its Subsidiaries as
at May 30, 1998 and the related consolidated statements of earnings,
stockholders' equity and cash flows of the Company and its Subsidiaries for the
fiscal quarter ended on such date. All such financial statements present fairly,
in all material respects, the financial position of the Company and its
Subsidiaries as at, and the results of operations for the fiscal year and fiscal
quarter, ended on said date, all in accordance with generally accepted
accounting principles and practices applied on a consistent basis (subject, in
the case of such financial statements as at May 30, 1998, to normal year-end
audit adjustments). Neither the Company nor any of its Subsidiaries has on the
Restatement Date any material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected or provided
for in said balance sheets as at said dates or in Part A of Schedule I hereto.
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(b) Since February 28, 1998, there has been no material adverse
change in the financial condition, operations, business or prospects of the
Company and its Subsidiaries from that set forth in said financial statements as
at said date.
7.03 Litigation. Except as disclosed to the Lenders in writing
prior to the Amendment Effective Date, there are no legal or arbitral
proceedings, or any proceedings by or before any governmental or regulatory
authority or agency, now pending or (to the knowledge of the Company) threatened
against the Company or any of its Subsidiaries which, if adversely determined,
could have a Material Adverse Effect.
7.04 No Breach. None of the execution and delivery of this
Agreement and the Notes and the other Basic Documents, the consummation of the
transactions herein and therein contemplated or compliance with the terms and
provisions hereof and thereof will conflict with or result in a breach of, or
require any consent under, the charter or by-laws of the Company, or any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to
which the Company or any of its Subsidiaries is a party (including, without
limitation, the Senior Subordinated Indentures) or by which any of them or any
of their Property is bound or to which any of them is subject, or constitute a
default under any such agreement or instrument, or (except for Liens created
pursuant to the Security Documents) result in the creation or imposition of any
Lien upon any Property of the Company or any of its Subsidiaries pursuant to the
terms of any such agreement or instrument.
7.05 Action. The Company has all necessary corporate power,
authority and legal right to execute, deliver and perform its obligations under
each of the Basic Documents; the execution, delivery and performance by the
Company of each of the Basic Documents have been duly authorized by all
necessary corporate action on its part (including, without limitation, any
required shareholder approvals); and this Agreement has been duly and validly
executed and delivered by the Company and constitutes, and each of the Notes and
the other Basic Documents to which it is a party when executed and delivered (in
the case of the Notes, for value) will constitute, its legal, valid and binding
obligation, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement of
creditors' rights and the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
7.06 Approvals. No authorizations, approvals or consents of, and
no filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by the Company of the Basic Documents to which it is a party or for
the legality, validity or enforceability hereof or thereof, except for filings
and recordings in respect of the Liens created pursuant to the Security
Documents.
7.07 Use of Credit. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no
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part of the proceeds of any extension of credit hereunder will be used to buy or
carry any Margin Stock.
7.08 ERISA. Each Plan, and, to the knowledge of the Company, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no event
or condition has occurred and is continuing as to which the Company would be
under an obligation to furnish a report to the Lenders under Section 8.01(f)
hereof.
7.09 Taxes. The Company and its Domestic Subsidiaries are members
of an affiliated group of corporations filing consolidated returns for Federal
income tax purposes, of which the Company is the "common parent" (within the
meaning of Section 1504 of the Code) of such group. The Company and its Domestic
Subsidiaries have filed all Federal income tax returns and all other material
tax returns that are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Company
or any of its Domestic Subsidiaries. The charges, accruals and reserves on the
books of the Company and its Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of the Company, adequate. Except as set
forth in Schedule VI hereto, the Company has not given or been requested to give
a waiver of the statute of limitations relating to the payment of Federal,
state, local and foreign taxes or other impositions.
7.10 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
7.11 Public Utility Holding Company Act. Neither the Company nor
any of its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
7.12 Material Agreements and Liens.
-----------------------------
(a) Part A of Schedule I hereto is a complete and correct list,
as of the Restatement Date, of each credit agreement, loan agreement, indenture,
purchase agreement, guarantee, letter of credit or other arrangement providing
for or otherwise relating to any Indebtedness or any extension of credit (or
commitment for any extension of credit) to, or guarantee by, the Company or any
of its Subsidiaries the aggregate principal or face amount of which equals or
exceeds (or may equal or exceed) $1,000,000, and the aggregate principal or face
amount outstanding or that may become outstanding under each such arrangement is
correctly described in Part A of said Schedule I.
(b) Part B of Schedule I hereto is a complete and correct list,
as of the Restatement Date, of each Lien securing Indebtedness the aggregate
principal or face amount of which equals or exceeds $1,000,000 of any Person and
covering any Property of the Company or any of its Subsidiaries, and the
aggregate amount of such Indebtedness secured (or which may be
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secured) by each such Lien and the Property covered by each such Lien is
correctly described in Part B of said Schedule I.
7.13 Environmental Matters. Except as set forth in Schedule II
hereto, each of the Company and its Subsidiaries has obtained all environmental,
health and safety permits, licenses and other authorizations required under all
Environmental Laws to carry on its business as now being or as proposed to be
conducted, except to the extent failure to have any such permit, license or
authorization would not have a Material Adverse Effect. All of the permits,
licenses and authorizations that have been obtained are in full force and effect
and each of the Company and its Subsidiaries is in compliance with the terms and
conditions thereof, and is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law or in any
regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
failure to comply therewith would not have a Material Adverse Effect.
In addition, except as set forth in Schedule II hereto:
(a) To the Company's knowledge after due inquiry, no written
notice, notification, demand, request for information, citation, summons or
order has been issued, no complaint has been filed, no penalty has been assessed
and no investigation or review is pending or threatened by any governmental or
other entity with respect to any alleged failure by the Company or any of its
Subsidiaries to have any environmental, health or safety permit, license or
other authorization required under any Environmental Law in connection with the
conduct of the business of the Company or any of its Subsidiaries or with
respect to any generation, treatment, storage, recycling, transportation,
discharge or disposal, or any Release of any Hazardous Materials generated by
the Company or any of its Subsidiaries.
(b) Neither the Company nor any of its Subsidiaries owns,
operates or leases a treatment, storage or disposal facility requiring a permit
under the Resource Conservation and Recovery Act of 1976, as amended, or under
any comparable state or local statute; and
(i) to the Company's knowledge after due inquiry, no PCB
Transformers (as defined in the Toxic Substances Control Act, 15 U.S.C.
ss.1601, et seq., as amended, and the regulations relating thereto) are
present at any site or facility owned, operated or leased by the Company
or any of its Subsidiaries;
(ii) to the Company's knowledge after due inquiry, no asbestos or
asbestos-containing materials is present at any site or facility owned,
operated or leased by the Company or any of its Subsidiaries;
(iii) to the Company's knowledge after due inquiry, there are no
underground storage tanks or surface impoundments for Hazardous
Materials, active or abandoned, at any site or facility owned, operated
or leased by the Company or any of its Subsidiaries; and
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(iv) to the Company's knowledge after due inquiry, no Hazardous
Materials have been Released by the Company or any of its Subsidiaries
at, on or under any site or facility now owned, operated or leased by
the Company or any of its Subsidiaries in a reportable quantity
established by any Environmental Law.
(c) To the Company's knowledge after due inquiry, neither the
Company nor any of its Subsidiaries has transported or arranged for the
transportation of any Hazardous Material to any location that is listed on the
National Priorities List ("NPL") under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), listed for
possible inclusion on the NPL by the Environmental Protection Agency, or listed
in the Comprehensive Environmental Response and Liability Information System, as
provided for by 40 C.F.R. ss. 300.5 ("CERCLIS"), or on any similar state or
local list or that is the subject of Federal, state or local enforcement actions
or other investigations that may lead to Environmental Claims against the
Company or any of its Subsidiaries.
(d) No Liens are presently recorded with the appropriate land
records under or pursuant to any Environmental Laws on any site or facility
owned, operated or leased by the Company or any of its Subsidiaries, and to the
Company's knowledge no government action has been taken or is in process that
could subject any such site or facility to such Liens. Neither the Company nor
any of its Subsidiaries would be required to place any notice or restriction
relating to the presence of Hazardous Materials at any site or facility owned by
it in any deed to the real property on which such site or facility is located.
(e) There have been no environmental investigations, written
studies, audits, tests, reviews or other analyses conducted by or that are in
the possession of the Company or any of its Subsidiaries in relation to any site
or facility now or previously owned, operated or leased by the Company or any of
its Subsidiaries which have not been made available to the Lenders.
7.14 Capitalization. The authorized capital stock of the Company
consists, on the Restatement Date, of an aggregate of 51,000,000 shares
consisting of (i) 50,000,000 shares of common stock, par value $0.01 per share,
of which 22,891,918 shares were, as at February 28, 1998 duly and validly issued
and outstanding, each of which shares is fully paid and nonassessable and (ii)
1,000,000 shares of preferred stock, par value $0.01 per share, of which no
shares were outstanding as at February 28, 1998. As of the Restatement Date the
Company is registered with the Securities and Exchange Commission under the
Securities Exchange Act, and its shares of common stock are publicly owned and
traded on the NASDAQ National Market System. As of the Restatement Date, (x)
except for options to purchase 2,902,001 shares of the common stock of the
Company, there are no outstanding Equity Rights with respect to the Company and
(y) there are no outstanding obligations of the Company or any of its
Subsidiaries to repurchase, redeem, or otherwise acquire any shares of capital
stock of the Company nor are there any outstanding obligations of the Company or
any of its Subsidiaries to make payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market value or equity value of the Company or any of its Subsidiaries.
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7.15 Subsidiaries, Etc.
------------------
(a) Set forth in Part A of Schedule III hereto is a complete and
correct list, as of the Restatement Date, of all of the Subsidiaries of the
Company, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests in
such Subsidiary, (iii) the nature of the ownership interests held by each such
Person and the percentage of ownership of such Subsidiary represented by such
ownership interests and (iv) the total book value of the assets of each such
Subsidiary as of May 30, 1998 (or, in the case of Subsidiaries acquired after
May 30, 1998, such other date as specified in Part A of Schedule III hereto).
Except as disclosed in Part A of Schedule III hereto, (x) each of the Company
and its Subsidiaries owns, free and clear of Liens (other than Liens created
pursuant to the Security Documents), and has the unencumbered right to vote, all
outstanding ownership interests in each Person shown to be held by it in Part A
of Schedule III hereto, (y) all of the issued and outstanding capital stock of
each such Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) there are no outstanding Equity Rights with respect to
such Person.
(b) Set forth in Part B of Schedule III hereto is a complete and
correct list, as of the Restatement Date, of all Investments (other than
Investments disclosed in Part A of said Schedule III hereto) of $1,000,000 or
more held by the Company or any of its Subsidiaries in any Person and, for each
such Investment, (x) the identity of the Person or Persons in which such
Investment has been made, (y) the nature of such Investment and (z) the amount
of such Investment. Except as disclosed in Part B of Schedule III hereto, each
of the Company and its Subsidiaries owns, free and clear of all Liens (other
than Liens created pursuant to the Security Documents), all such Investments.
(c) Except as set forth in Schedule III hereto, none of the
Subsidiaries of the Company is, on the Restatement Date, subject to any
indenture, agreement, instrument or other arrangement of the type described in
the last sentence of Section 8.17 hereof.
7.16 Title to Assets. The Company owns and has on the Restatement
Date, and will own and have on the Amendment Effective Date, good and marketable
title (subject only to Liens permitted by Section 8.06 hereof) to the Properties
shown to be owned in the most recent financial statements referred to in Section
7.02 hereof (other than Properties disposed of in the ordinary course of
business or otherwise permitted to be disposed of pursuant to Section 8.05
hereof). The Company owns and has on the Restatement Date, and will own and have
on the Amendment Effective Date, good and marketable title to, and enjoys on the
Restatement Date, and will enjoy on the Amendment Effective Date, peaceful and
undisturbed possession of, all Properties (subject only to Liens permitted by
Section 8.06 hereof) that are necessary for the operation and conduct of its
businesses.
7.17 Compliance with Law. Except as set forth in Schedule IV
hereto, each of the Company and its Subsidiaries is in compliance with all
applicable laws, rules, regulations and orders of, and all applicable
restrictions imposed by, all governmental authorities or bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
Property (including Environmental Laws), except such noncompliance as would not,
in the aggregate,
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have a Material Adverse Effect on the business, properties, assets, operations,
condition (financial or otherwise), or prospects of the Company and its
Subsidiaries, taken as a whole.
7.18 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Company to the Administrative Agent or any Lender prior to the
Amendment Effective Date in connection with the negotiation, preparation or
delivery of this Agreement and the other Basic Documents or included herein or
therein or delivered pursuant hereto or thereto, when taken as a whole (together
with the Information Memorandum which the Lenders acknowledge contains
projections based on certain assumptions therein stated) do not contain any
untrue statement of material fact or omit to state any material fact necessary
to make the statements herein or therein, in light of the circumstances under
which they were made, not misleading. All written information furnished on or
after the Amendment Effective Date by the Company and its Subsidiaries to the
Administrative Agent and the Lenders in connection with this Agreement and the
other Basic Documents and the transactions contemplated hereby and thereby will
be true, complete and accurate in every material respect, or (in the case of
projections) based on reasonable estimates, on the date as of which such
information is stated or certified. There is no fact known to the Company that
could have a Material Adverse Effect that has not been disclosed herein, in the
other Basic Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Lenders for use in
connection with the transactions contemplated hereby or thereby.
7.19 Year 2000. Substantially all reprogramming required to
permit the proper functioning, in and following the year 2000, of (i) the
Company's computer systems and (ii) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the Company's
systems interface) and the testing of all such systems and equipment, as so
reprogrammed, will be materially completed by July 1, 1999. The cost to the
Company of such reprogramming and testing and of the reasonable foreseeable
consequences of year 2000 to the Company (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) will not
result in a Default or a Material Adverse Effect. Nothing herein shall preclude
the Company from making the foregoing representation after the making of an
Acquisition of any Person that is not in compliance with the above, so long as
the Company has prepared a plan prior to such Acquisition that sets forth, in
the reasonable judgment of the chief financial officer of the Company, the
action that the Company has taken or proposes to take to bring such Person into
compliance with the above.
Section 8. Covenants of the Company. The Company covenants and
agrees with the Lenders and the Administrative Agent that, so long as any
Commitment, Loan or Letter of Credit Liability is outstanding and until payment
in full of all amounts payable by the Company hereunder:
8.01 Financial Statements, Etc. The Company shall deliver to each
of the Lenders:
(a) as soon as available and in any event within 60 days after
the end of each of the first three quarterly fiscal periods of each fiscal year
of the Company, consolidated
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statements of earnings, stockholders' equity and cash flows of the Company and
its Subsidiaries, for such period and for the period from the beginning of the
respective fiscal year to the end of such period, setting forth in each case in
comparative form the corresponding consolidated figures for the corresponding
period in the preceding fiscal year, and the related consolidated balance sheet
of the Company and its Subsidiaries, as at the end of such period, setting forth
in comparative form the corresponding consolidated figures for the last day of
the preceding fiscal year, accompanied by a certificate of a senior financial
officer of the Company, which certificate shall state that said consolidated
financial statements present fairly, in all material respects, the consolidated
financial condition and results of operations of the Company and its
Subsidiaries, in accordance with generally accepted accounting principles,
consistently applied, as at the end of, and for, such period (subject to normal
year-end audit adjustments);
(b) as soon as available and in any event within 105 days after
the end of each fiscal year of the Company, consolidated and consolidating
statements of operations and stockholders' equity of the Company and its
Subsidiaries, and consolidated statements of cash flows of the Company and its
Subsidiaries, for such fiscal year and the related consolidated and
consolidating balance sheets of the Company and its Subsidiaries as at the end
of such fiscal year, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the preceding fiscal
year, and accompanied, (i) in the case of said consolidated statements and
balance sheet of the Company, by an opinion thereon of independent certified
public accountants of recognized national standing, which opinion shall state
that said consolidated financial statements present fairly, in all material
respects, the consolidated financial condition and results of operations of the
Company and its Subsidiaries as at the end of, and for, such fiscal year in
accordance with generally accepted accounting principles, and a report of such
accountants stating that, in making the examination necessary for their opinion,
nothing came to their attention, except as specifically stated, that caused them
to believe that the Company had failed to comply with Sections 8.09, 8.10, 8.11
and 8.12 hereof, or any other provisions hereof, insofar as they relate to
accounting matters, and (ii) in the case of said consolidating statements and
balance sheets, by a certificate of a senior financial officer of the Company
which certificate shall state that said consolidating financial statements
fairly present the respective individual unconsolidated financial condition and
results of operations of the Company and of each of its Subsidiaries, in each
case in accordance with generally accepted accounting principles, consistently
applied, as at the end of, and for, such fiscal year;
(c) as soon as available and in any event within 105 days after
the end of each fiscal year of the Company, statements of information concerning
net sales, operating earnings, depreciation and amortization of each division of
the Company and its Subsidiaries (including, without limitation, the Seating
Products Division, Galley Products Division, In-Flight Entertainment Division
and Service Division) for such period setting forth in each case in comparative
form the corresponding figures for the preceding fiscal year;
(d) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which the Company
shall have filed with the Securities and Exchange Commission (or any
governmental agency substituted therefor) or any national securities exchange;
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(e) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed;
(f) as soon as possible, and in any event within ten days after
the Company knows or has reason to believe that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan has occurred or
exists, a statement signed by a senior financial officer of the Company setting
forth details respecting such event or condition and the action, if any, that
the Company or its ERISA Affiliate proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or given to PBGC by the
Company or an ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA
and the regulations issued thereunder, with respect to a Plan, as to
which PBGC has not by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the occurrence of
such event (provided that a failure to meet the minimum funding standard
of Section 412 of the Code or Section 302 of ERISA, including, without
limitation, the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of ERISA,
shall be a reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code); and any request for a
waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice of
intent to terminate any Plan or any action taken by the Company or an
ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan
by the Company or any ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy
secondary liability as a result of a purchaser default) or the receipt
by the Company or any ERISA Affiliate of notice from a Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;
and
(vi) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in
the loss of tax-exempt status of the trust of which such Plan is a part
if the Company or an ERISA
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Affiliate fails to timely provide security to the Plan in accordance
with the provisions of said Sections;
(g) promptly after the Company knows or has reason to believe
that any Default has occurred, a notice of such Default describing the same in
reasonable detail and, together with such notice or as soon thereafter as
possible, a description of the action that the Company has taken or proposes to
take with respect thereto;
(h) Within 10 Business Days after the date of any Acquisition and
at the time of delivery of the financial statements for the first four Fiscal
Dates thereafter, pro forma consolidated statements of earnings of the Company
and its Subsidiaries for the relevant Calculation Period and related pro forma
consolidated balance sheet items necessary for the pro forma calculation of
compliance with the covenants in this Agreement of the Company and its
Subsidiaries as of the last day of each fiscal quarter of the Company occurring
during such Calculation Period, prepared as though such Acquisition had
occurred, and any Funded Debt incurred or assumed by the Company or any of its
Subsidiaries in connection with such Acquisition had been incurred or assumed,
on the first day of such Calculation Period;
(i) with the delivery of the financial statements pursuant to
Sections 8.01(a) and 8.01(b) hereof, a statement of a senior financial officer
of the Company (A) listing each Disposition by the Company and its Subsidiaries
that occurred during the quarterly fiscal period ending on the date of such
financial statements if the Net Available Proceeds thereof exceeded $100,000 and
(B) setting forth in reasonable detail the Net Available Proceeds of each such
Disposition and the aggregate Net Available Proceeds since the first day of the
then current Recapture Period; and
(j) from time to time such other information regarding the
financial condition, operations, business or prospects of the Company or any of
its Subsidiaries (including, without limitation, any Plan or Multiemployer Plan
and any reports or other information required to be filed under ERISA) as any
Lender or the Administrative Agent may reasonably request.
The Company will furnish to each Lender, at the time it furnishes each set of
financial statements pursuant to paragraph (a), (b) or (h) above, a certificate
of a senior financial officer of the Company (i) to the effect that no Default
has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail and describing the action
that the Company has taken or proposes to take with respect thereto) and (ii)
setting forth in reasonable detail (x) the computations necessary to determine
whether the Company is in compliance with Sections 8.07(e), 8.07(h), 8.08(f),
8.08(h), 8.09, 8.10, 8.11 and 8.12 hereof, and (y) the Interest Coverage Ratio
and the Leverage Ratio as of the end of the respective quarterly fiscal period,
fiscal year or Calculation Period.
8.02 Litigation. The Company will promptly give to each Lender
notice of all legal or arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Company or any of
its Subsidiaries, except proceedings which, if adversely determined, would not
have a Material Adverse Effect. Without limiting the generality of the
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foregoing, the Company will give to each Lender notice of the assertion of any
Environmental Claim by any Person against, or with respect to the activities of,
the Company or any of its Subsidiaries and notice of any alleged violation of or
non-compliance with any Environmental Laws or any permits, licenses or
authorizations, other than any Environmental Claim or alleged violation which,
if adversely determined, would not have a Material Adverse Effect.
8.03 Existence, Etc. The Company will, and will cause each of its
Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (provided that nothing in
this Section 8.03 shall prohibit any transaction expressly permitted under
Section 8.05 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if failure to
comply with such requirements could have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is being contested in
good faith and by proper proceedings and against which adequate reserves are
being maintained;
(d) maintain all of its Properties used or useful in its business
in good working order and condition, ordinary wear and tear excepted;
(e) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting principles
consistently applied; and
(f) permit representatives of any Lender or the Administrative
Agent, during normal business hours, to examine, copy and make extracts from its
books and records, to inspect any of its Properties, and to discuss its business
and affairs with its officers, all to the extent reasonably requested by such
Lender or the Administrative Agent (as the case may be).
8.04 Insurance. The Company will, and will cause each of its
Subsidiaries to, keep insured by financially sound and reputable insurers all
Property of a character usually insured by corporations engaged in the same or
similar business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such corporations and carry such
other insurance as is usually carried by such corporations.
8.05 Prohibition of Fundamental Changes. The Company will not,
nor will it permit any of its Subsidiaries to, enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution) or Dispose of all or
substantially all of its Property. The Company will not, nor will it permit any
of its Subsidiaries to, to make any Acquisition except for Investments permitted
under Section 8.08 hereof. Notwithstanding the foregoing provisions of this
Section 8.05:
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(a) any Subsidiary of the Company may be merged or consolidated
with or into: (i) the Company if the Company shall be the continuing or
surviving corporation or (ii) any other such Subsidiary; provided that (x) if
any such transaction shall be between a Subsidiary and a Wholly Owned
Subsidiary, the Wholly Owned Subsidiary shall be the continuing or surviving
corporation;
(b) subject to Section 8.14 hereof, the Company or any Subsidiary
of the Company may make any Acquisition; provided that immediately prior to and
after giving effect to any such Acquisition, (i) no Default shall have occurred
and be continuing and (ii) not more than $50,000,000 of the proceeds of the
Series A Loans then outstanding shall have been applied, directly by the Company
or indirectly through a Subsidiary, for the purposes specified in clause (1)(ii)
of Section 8.16 hereof; and
(c) the Company or any Subsidiary of the Company may make any
Acquisition from any Subsidiary of the Company in each case for consideration
that is not in excess of the fair market value of the Property acquired in such
Acquisition as determined in good faith by the chief financial officer of the
Company.
8.06 Limitation on Liens. The Company will not, nor will it
permit any of its Domestic Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except:
(a) Liens created pursuant to the Security Documents;
(b) Liens outstanding on the Restatement Date and listed in Part
B of Schedule I hereto;
(c) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or which are being contested in good faith
and by appropriate proceedings if, unless the amount thereof is not material
with respect to it or its financial condition, adequate reserves with respect
thereto are maintained on the books of the Company or the affected Domestic
Subsidiaries, as the case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings and Liens securing judgments but
only to the extent, for an amount and for a period not resulting in an Event of
Default under Section 9(h) hereof;
(e) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(f) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
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(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the use
of Property or minor imperfections in title thereto which, in the aggregate, are
not material in amount, and which do not in any case materially detract from the
value of the Property subject thereto or interfere with the ordinary conduct of
the business of the Company or any of its Domestic Subsidiaries;
(h) Liens on Property of any corporation which becomes a Domestic
Subsidiary of the Company after the Restatement Date, provided that such Liens
are in existence at the time such corporation becomes a Domestic Subsidiary of
the Company and were not created in anticipation thereof;
(i) subject to the restrictions contained in the Security
Documents, Liens upon real and/or tangible personal Property and/or software and
license rights with respect to software (including, without limitation, software
and license rights with respect to software under the GE Lease Agreement)
acquired after the Restatement Date (by purchase, construction or otherwise) by
the Company or any of its Domestic Subsidiaries other than in connection with
any Acquisition by the Company or any of its Domestic Subsidiaries, each of
which Liens either (A) existed on such Property before the time of its
acquisition and was not created in anticipation thereof, or (B) was created
solely for the purpose of securing Indebtedness representing, or incurred to
finance, refinance or refund, the cost (including the cost of construction) of
such Property; provided that no such Lien shall extend to or cover any Property
of the Company or such Domestic Subsidiary other than the Property so acquired
and improvements thereon; and provided, further, that the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 100% of the fair
market value (as determined in good faith by a senior financial officer of the
Company) of such Property at the time it was acquired (by purchase, construction
or otherwise);
(j) additional Liens upon real and/or tangible personal Property
of the Company or any of its Domestic Subsidiaries created after the Restatement
Date, provided that the aggregate Indebtedness secured thereby and incurred on
and after the Restatement Date shall not exceed $20,000,000 in the aggregate at
any one time outstanding; and
(k) any extension, renewal or replacement of the foregoing,
provided, however, that the Liens permitted hereunder shall not be spread to
cover any additional Indebtedness or Property (other than a substitution of like
Property).
8.07 Indebtedness. The Company will not, nor will it permit any
of its Subsidiaries to, create, incur or suffer to exist any Indebtedness
except:
(a) Indebtedness to the Lenders hereunder;
(b) Indebtedness outstanding or committed on the Restatement Date
and, if equal to or in excess of $1,000,000, listed in Part A of Schedule I
hereto and any extension, renewal or replacement thereof;
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(c) Indebtedness of Subsidiaries of the Company to the Company to
the extent contemplated by Section 8.08(d) hereof;
(d) Indebtedness of the Company to its Subsidiaries and
Indebtedness of Subsidiaries of the Company to other Subsidiaries of the
Company;
(e) Indebtedness of the Company and its Subsidiaries secured by
Liens permitted under Sections 8.06(i) and 8.06(j) hereof;
(f) Guarantees by any Subsidiary of the Company of Indebtedness
of the Company or any Subsidiary of the Company;
(g) unsecured Indebtedness that has no regularly scheduled
maturity or mandatory prepayments on or before the Series A Commitment
Termination Date, that does not include required prepayments (including, without
limitation, as a result of a change of control or asset sale) on terms less
favorable to the Lenders than the Senior Subordinated Indentures, and that is
subordinated in right of payment to the Loans at least to the extent provided in
the Senior Subordinated Indentures; and
(h) additional unsecured Indebtedness of the Company and its
Subsidiaries up to but not exceeding in the aggregate $40,000,000 at any one
time outstanding; provided that any such Indebtedness of any such individual
Subsidiary may not exceed $10,000,000 in the aggregate at any one time
outstanding.
8.08 Investments. The Company will not, nor will it permit any of
its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(a) Investments outstanding on the Restatement Date and
identified in Schedule III Part B hereto;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Company in Subsidiaries of the Company in
the ordinary course of business; provided that (i) the aggregate amount of the
Investments by the Company or any of its Subsidiaries in the Specified
Subsidiaries shall not exceed $5,000,000 at any one time outstanding and (ii)
the aggregate amount of Customer Obligations (as defined in paragraph (h) below)
that are not fully secured (whether by a perfected Lien on, or an indefeasible
title retention to, the products so sold or leased, or otherwise) plus the
aggregate fair market value of all Property (whether now owned or hereafter
acquired) of the Company or any of its Subsidiaries (as determined in good faith
by the chief financial officer of the Company) sold, assigned, transferred or
otherwise disposed of on or after April 3, 1998 to any Minority-Owned Entities
(as defined in paragraph (h) below) plus the aggregate book value (at the time
of its transfer) of all Property (not including cash and not including any
Property that is subject to a
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Lien in favor of the Administrative Agent for the benefit of the Lenders)
transferred by the Company to any one or more Subsidiaries since April 3, 1998
shall not exceed in the aggregate at any one time outstanding the greater of (x)
$25,000,000 and (y) 5% of Adjusted Net Worth as of the most recent Fiscal Date
for which financial statements have been provided hereunder;
(e) subject to the proviso to clause (d) above, Investments by
Subsidiaries of the Company in other Subsidiaries of the Company and in the
Company in the ordinary course of business;
(f) Interest Rate Protection Agreements so long as the aggregate
credit exposure under all Interest Rate Protection Agreements calculated at the
time any Interest Rate Protection Agreement is entered into does not exceed
$10,000,000;
(g) Investments permitted by clause (b) of the last sentence of
Section 8.05 hereof; and
(h) Investments of the Company and its Subsidiaries (i) in
corporations, companies, limited liability companies, partnerships and other
entities in each case that are not, or do not thereby become, Subsidiaries of
the Company ("Minority-Owned Entities") or (ii) representing obligations of
customers owing to the Company and its Subsidiaries in respect of the deferred
purchase price of products or services sold or the leasing of products to
customers ("Customer Obligations"), in each case in the ordinary course of
business of the Company and its Subsidiaries as provided for in Section 8.14
hereof and on such terms as the management of the Company may determine in its
reasonable business judgment, provided that the aggregate amount of such
Customer Obligations that are not fully secured (whether by a perfected Lien on,
or an indefeasible title retention to, the products so sold or leased, or
otherwise) plus the aggregate fair market value of all Property (whether now
owned or hereafter acquired) of the Company or any of its Subsidiaries (as
determined in good faith by the chief financial officer of the Company) sold,
assigned, transferred or otherwise disposed of on or after April 3, 1998 to any
such Minority-Owned Entities plus the aggregate book value (at the time of its
transfer) of all Property (not including cash and not including Property that is
subject to a Lien in favor of the Administrative Agent for the benefit of the
Lenders) transferred by the Company to any one or more Subsidiaries since April
3, 1998 shall not exceed in the aggregate at any one time outstanding the
greater of (x) $25,000,000 and (y) 5% of Adjusted Net Worth as of the most
recent Fiscal Date for which financial statements have been provided hereunder.
8.09 Restricted Payments. The Company will not, nor will it
permit any of its Subsidiaries to, declare or make any Restricted Payment at any
time; provided that (i) the Company may make Restricted Payments in an amount up
to but not exceeding (A) $25,000,000 in the aggregate plus (B) in any fiscal
year of the Company, an aggregate amount up to but not exceeding 25% of the net
earnings of the Company for the immediately preceding fiscal year ("Available
Net Earnings"), provided that any portion of Available Net Earnings not used for
Restricted Payments in any fiscal year (the "Carry-Over Amount") may be used for
Restricted Payments in the immediately succeeding fiscal year only, for which
purpose Restricted Payments in any fiscal year shall be deemed to have been made
first from Available Net Earnings, and only thereafter from any Carry-Over
Amount, such Restricted Payments set forth in clauses (i)(A) and
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(B) hereof not to exceed $50,000,000 in the aggregate, and (ii) any Subsidiary
of the Company may make Restricted Payments to the Company from time to time.
8.10 Leverage Ratio. The Company will not permit the Leverage
Ratio to exceed the following respective ratios at any time during the following
respective periods:
Period Ratio
------ -----
From (but not including) the
Fiscal Date in November 1997
through the Fiscal Date in
August 1998. 5.25 to 1
From (but not including) the
Fiscal Date in August 1998
through the Fiscal Date in
February 1999 4.90 to 1
From (but not including) the
Fiscal Date in February 1999
through the Fiscal Date in
February 2000 4.50 to 1
From (but not including) the
Fiscal Date in February 2000
through the Fiscal Date in
February 2001 4.00 to 1
Thereafter.... 3.50 to 1
8.11 Adjusted Net Worth. The Company will not at any date permit
Adjusted Net Worth to be less than the sum of (a) $150,000,000 plus (b) 75% of
the aggregate amount of Net Available Proceeds of Equity Issuances received
after November 29,1997 plus (c) 75% of the sum of consolidated net earnings of
the Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) for each fiscal quarter of the Company
ending after November 29, 1997; provided that consolidated net earnings for any
fiscal quarter in which there is a consolidated net loss shall be deemed to be
zero.
8.12 Interest Coverage Ratio. The Company will not permit the
Interest Coverage Ratio to be less than the following respective ratios during
the following respective periods:
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Period Ratio
------ -----
From (but not including) the
Fiscal Date in November 1997
through the Fiscal Date in
August 1998. 2.00 to 1
From (but not including) the
Fiscal Date in August 1998
through the Fiscal Date in
February 1999 2.25 to 1
From (but not including) the
Fiscal Date in February 1999
through the Fiscal Date in
February 2000 2.50 to 1
From (but not including) the
Fiscal Date in February 2000
through the Fiscal Date in
February 2001 2.75 to 1
Thereafter.... 3.00 to 1
8.13 [Intentionally Omitted.]
8.14 Lines of Business. Neither the Company nor any of its
Subsidiaries shall engage to any substantial extent in any line or lines of
business activity other than the business of designing, manufacturing,
distributing, selling, leasing and servicing products used in the interior of
airplanes, buses and trains and servicing and acting as a broker in the sales
and leases of such products together with any other business reasonably related
to the foregoing.
8.15 Transactions with Affiliates. Except as set forth in
Schedule VII hereto or as expressly permitted by this Agreement, the Company
will not, nor will it permit any of its Subsidiaries to, directly or indirectly:
(a) make any Investment in an Affiliate; (b) transfer, sell, lease, assign or
otherwise dispose of any Property to an Affiliate; (c) merge into or consolidate
with or purchase or acquire Property from an Affiliate; or (d) enter into any
other transaction directly or indirectly with or for the benefit of an Affiliate
(including, without limitation, guarantees and assumptions of obligations of an
Affiliate); provided that (x) any Affiliate who is an individual may serve as a
director, officer or employee of the Company or any of its Subsidiaries and
receive reasonable compensation for his or her services in such capacity and (y)
the Company and its Subsidiaries may enter into transactions (other than
extensions of credit by the Company or any of its Subsidiaries to an Affiliate)
providing for the leasing of Property, the rendering or receipt of services or
the purchase or sale of inventory and other Property in the ordinary course of
business if the monetary or business consideration arising therefrom would be
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substantially as advantageous to the Company and its Subsidiaries as the
monetary or business consideration which would obtain in a comparable
transaction with a Person not an Affiliate.
8.16 Use of Proceeds. The Company will use the proceeds of (1)
the Series A Loans hereunder solely (i) to finance ongoing working capital and
other capital requirements of the Company and (ii) to finance Acquisitions and
to refinance Series C Loans outstanding on the Series C Commitment Termination
Date (in compliance with all applicable legal and regulatory requirements), (2)
the Series B Loans hereunder solely to finance Acquisitions (subject to clause
(b) of the last sentence of Section 8.05) and (3) the Series C Loans solely to
finance Series C Reimbursement Obligations; provided that neither the
Administrative Agent nor any Lender shall have any responsibility as to the use
of any of such proceeds; and provided further that no more than $50,000,000 of
the Series A Commitments may be used for the purposes set forth in clause
(1)(ii) above.
8.17 Certain Obligations Respecting Subsidiaries.
(a) The Company will, and will cause each of its Subsidiaries to,
take such action from time to time as shall be necessary to ensure that the
Company and each of its Subsidiaries at all times owns (subject only to the Lien
of the Security Documents) at least the same percentage of the issued and
outstanding shares of each class of stock or partnership or other ownership
interest of each of its Subsidiaries as is owned on the Restatement Date (or,
with respect to any Subsidiary acquired or organized after the date hereof, as
of the date of such acquisition or organization). Without limiting the
generality of the foregoing, none of the Company nor any of its Subsidiaries
shall sell, transfer, pledge or otherwise dispose of any shares of stock or
partnership or other ownership interest in any Subsidiary owned by them, nor
permit any Subsidiary to issue any shares of stock of any class or partnership
or other ownership interest whatsoever to any Person (other than to the Company
or the immediate parent of such Subsidiary which is a Wholly Owned Subsidiary of
the Company). In the event that (a) any such additional shares of stock or
partnership or other ownership interest shall be issued by any such Subsidiary
or (b) the Company shall directly or indirectly create any new Material
Subsidiary or Acquire any additional Material Subsidiary and shall thereby
become the owner, directly or indirectly, of the shares of capital stock or
partnership or other ownership interest of such new or additional Material
Subsidiary, the Company agrees forthwith to deliver to the Administrative Agent
pursuant to security documents satisfactory to the Banks, any shares,
certificates of ownership, membership interests or other evidence of ownership,
or other securities received as a result therefrom (together with undated stock
or other powers executed in blank) and shall give, execute, deliver, file and/or
record any financing statement, notice, instrument, document, agreement or other
papers that may be necessary or desirable (in the judgment of the Administrative
Agent) to create, preserve or validate the security interest created therein,
including, without limitation, causing any or all of the Collateral (as defined
in the Security Agreement and the In-Flight Guarantee and Security Agreement,
respectively) to be transferred of record into the name of the Administrative
Agent; provided that if any such Material Subsidiary is organized under the laws
of a jurisdiction other than the United States of America or a State thereof,
the Company need not pledge to the Administrative Agent more than 65% of the
capital stock, partnership or other ownership interest in such Material
Subsidiary.
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(b) The Company will not permit any of its Subsidiaries to enter
into, after the Restatement Date, any indenture, agreement, instrument or other
arrangement that, directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse conditions
upon, the incurrence or payment of Indebtedness, the granting of Liens, the
declaration or payment of dividends, the making of loans, advances or
Investments or the sale, assignment, transfer or other disposition of Property.
8.18 Modifications of Certain Documents. The Company will not
consent to (i) any modification, supplement or waiver of any of the provisions
of the Senior Subordinated Indentures or (ii) to the creation of any class of
preferred stock that has a mandatory dividend or redemption date prior to the
Series A Commitment Termination Date; provided that any Senior Subordinated
Indenture may be amended in connection with, and to facilitate, the purchase,
redemption, prepayment, defeasance or other retirement in full of the
Indebtedness issued pursuant thereto, which purchase, redemption, prepayment,
defeasance or other retirement is permitted hereunder.
8.19 Environmental Matters.
(a) The Company will, and will cause each of its Subsidiaries to,
comply with all Environmental Laws applicable to the Company and each of its
Subsidiaries, except to the extent that failure to comply with such laws would
not have a Material Adverse Effect, and shall obtain, at or prior to the time
required by applicable Environmental Laws, all environmental, health and safety
permits, licenses and other authorizations necessary for its operations and
maintain such authorizations in full force and effect.
(b) If the Company discovers evidence of the presence of any
Hazardous Materials in any amount that is required to be reported under
Environmental Law, the Company will promptly clean-up such Hazardous Materials
or take such other remedial action as is (a) required by law or (b) deemed
necessary by the Company in its reasonable determination, such determination to
be based in part on the advice of independent environmental consultants
acceptable to the Company and the Administrative Agent.
(c) The Company shall promptly furnish to the Administrative
Agent all written notices of any Environmental Claims received by the Company or
any of its Subsidiaries with respect to any alleged violation of or
non-compliance with any Environmental Laws or any permits, licenses or
authorizations issued thereunder in connection with the ownership, operation or
use of any site or facility or the operation of their businesses or the presence
or Release of Hazardous Substances, which Environmental Claim if determined
adversely to the Company would have a Material Adverse Effect.
8.20 Security for Loans. The Company shall, no later than 90 days
following the request by the Majority Lenders, file in each governmental office
or agency in each appropriate jurisdiction as owner of record of each of the
Foreign Trademarks identified on Annex 4 to the Security Agreement.
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8.21 Redemption of Senior Subordinated Indebtedness. Except as
permitted by Section 8.09 hereof, the Company will not prepay, redeem, effect a
defeasance or covenant defeasance or otherwise retire any of the Indebtedness
issued pursuant to the Senior Subordinated Indentures.
Section 9. Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be continuing:
(a) The Company shall (i) default in the payment of any principal
of any Loan or any Reimbursement Obligation when due (whether at stated maturity
or upon mandatory or optional prepayment) or (ii) default in the payment of any
interest on any Loan, any fee or any other amount payable by it hereunder or
under any other Basic Document when due (whether at stated maturity or upon
mandatory or optional prepayment or otherwise) and such default shall have
continued unremedied for three or more Business Days; or
(b) The Company or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its other
Indebtedness aggregating $5,000,000 or more, or in the payment when due of any
amount aggregating $5,000,000 or more under any Interest Rate Protection
Agreement; or any event specified in any note, agreement, indenture or other
document evidencing or relating to any such Indebtedness or any event specified
in any Interest Rate Protection Agreement shall occur if the effect of such
event is to cause, or (with the giving of any notice or the lapse of time or
both) to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, such Indebtedness to become
due, or to be prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise), prior to its stated maturity or to have the interest
rate thereon reset to a level so that securities evidencing such Indebtedness
trade at a level specified in relation to the par value thereof or, in the case
of an Interest Rate Protection Agreement, to permit the payments owing under
such Interest Rate Protection Agreement to be liquidated in an amount
aggregating $5,000,000 or more; or
(c) Any representation, warranty or certification made or deemed
made herein or in any other Basic Document (or in any modification or supplement
hereto or thereto) by the Company, or any certificate furnished to any Lender or
the Administrative Agent pursuant to the provisions hereof or thereof shall
prove to have been false or misleading in any material respect as of the time
made or furnished; or
(d) The Company shall default in the performance of any of its
obligations under any of Sections 8.01(g), 8.05, 8.06, 8.07, 8.08, 8.09, 8.10,
8.11 or 8.12 hereof or the Company shall default in the performance of any of
its obligations under Section 5.02 of the Security Agreement; or the Company
shall default in the performance of any of its other obligations in this
Agreement or any other Basic Document and such default shall continue unremedied
for a period of thirty days after notice thereof to the Company by the
Administrative Agent or any Lender (through the Administrative Agent); or
In-Flight shall default in the performance of any of its obligations under
Section 6.02 of the In-Flight Guarantee and Security Agreement; or
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(e) The Company or any of its Subsidiaries shall admit in writing
its inability to, or be generally unable to, pay its debts as such debts become
due; or
(f) The Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or a substantial
part of its Property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file
a petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding-up,
or composition or readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code or (vi) take any corporate action
for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the
application or consent of the Company or any of its Subsidiaries, in any court
of competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or readjustment of
its debts, (ii) the appointment of a receiver, custodian, trustee, examiner,
liquidator or the like of the Company or such Subsidiary or of all or any
substantial part of its Property, or (iii) similar relief in respect of the
Company or such Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days; or an order for relief
against the Company or such Subsidiary shall be entered in an involuntary case
under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in
excess of $5,000,000 in the aggregate (exclusive of judgment amounts fully
covered by insurance where the insurer has admitted liability in respect of such
judgment) or in excess of $20,000,000 in the aggregate (regardless of insurance
coverage) shall be rendered by one or more courts, administrative tribunals or
other bodies having jurisdiction against the Company or any of its Subsidiaries
and the same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within 30 days
from the date of entry thereof and the Company or the relevant Subsidiary shall
not, within said period of 30 days, or such longer period during which execution
of the same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 8.01(f) hereof
shall occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur or in the opinion of
the Majority Lenders shall be reasonably likely to incur a liability to a Plan,
a Multiemployer Plan or PBGC (or any combination of the foregoing) which would
constitute, in the determination of the Majority Lenders, a Material Adverse
Effect; or
(j) A reasonable basis shall exist for the assertion against the
Company or any of its Subsidiaries of (or there shall have been asserted against
the Company or any of its Subsidiaries) claims or liabilities, whether accrued,
absolute or contingent, based on or arising
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from the generation, storage, transport, handling or disposal of Hazardous
Materials by the Company or any of its Subsidiaries or Affiliates, or any
predecessor in interest of the Company or any of its Subsidiaries or Affiliates,
or relating to any site or facility owned, operated or leased by the Company or
any of its Subsidiaries or Affiliates, which claims or liabilities (insofar as
they are payable by the Company or any of its Subsidiaries but after deducting
any portion thereof which is reasonably expected to be paid by other
creditworthy Persons jointly and severally liable therefor), in the judgment of
the Majority Lenders are reasonably likely to be determined adversely to the
Company or any of its Subsidiaries, and the amount thereof is, singly or in the
aggregate, reasonably likely to have a Material Adverse Effect; or
(k) Any "person" or "group" (as such terms are defined in
Sections 13(d) and 14(d) of the Securities Exchange Act (other than Amin or
Xxxxxx Xxxxxx, their lineal descendants or trusts established by such Persons
for their respective lineal descendants)) is or becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 30%
or more of the aggregate voting rights of the outstanding capital stock of the
Company (on a fully diluted basis); or during any consecutive 25-month period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by the
stockholders of the Company was approved by a vote of 66-2/3% of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of the Company
then in office; or
(l) Except for expiration in accordance with its terms, any of
the Security Documents shall be terminated or shall cease to be in full force
and effect, for whatever reason;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 9 with respect to the Company, the
Administrative Agent may, by notice to the Company, terminate the Commitments
and/or declare the principal amount then outstanding of, and the accrued
interest on, the Loans, the Reimbursement Obligations and all other amounts
payable by the Company hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.05 or 5.06 hereof) to be
forthwith due and payable (provided that (x) if so requested by the Majority
Series A Lenders, the Administrative Agent shall take such action with respect
to the Series A Commitments and/or the Series A Loans, Series A Reimbursement
Obligations and such interest and other amounts to the extent owed to the Series
A Lenders, (y) if so requested by the Majority Series B Lenders, the
Administrative Agent shall take such action with respect to the Series B
Commitments and the Series B Loans and such interest and other amounts to the
extent owed to the Series B Lenders) and (z) if so requested by the Majority
Series C Lenders, the Administrative Agent shall take such action with respect
to the Series C Commitments and/or the Series C Loans, Series C Reimbursement
Obligations and such interest and other amounts to the extent owed to the Series
C Lenders, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Company; and (2) in the case of the occurrence of
an Event of Default referred to in clause (f) or (g) of this Section 9 with
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respect to the Company, the Commitments shall automatically be terminated and
the principal amount then outstanding of, and the accrued interest on, the
Loans, the Reimbursement Obligations and all other amounts payable by the
Company hereunder and under the Notes (including, without limitation, any
amounts payable under Section 5.05 or 5.06 hereof) shall automatically become
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company.
In addition, upon the occurrence and during the continuance of
any Event of Default (if the Administrative Agent has declared the principal
amount then outstanding of, and accrued interest on, the Series A Loans and all
other amounts payable by the Company hereunder and under the Notes to be due and
payable), the Company agrees that it shall, if requested by the Administrative
Agent, or the Majority Series A Lenders (in the case of Series A Letters of
Credit) or the Majority Series C Lenders (in the case of Series C Letters of
Credit) through the Administrative Agent (and, in the case of any Event of
Default referred to in clause (f) or (g) of this Section 9 with respect to the
Company, forthwith, without any demand or the taking of any other action by the
Administrative Agent or such Lenders) provide cover for such Series A or Series
C Letter of Credit Liabilities by paying to the Administrative Agent immediately
available funds in an amount equal to the then aggregate undrawn face amount of
all such Letters of Credit, which funds shall be held by the Administrative
Agent in the Collateral Account as collateral security in the first instance for
such Series A or Series C Letter of Credit Liabilities and be subject to
withdrawal only as therein provided.
Section 10. The Administrative Agent.
10.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Basic Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and of the other Basic Documents, together with such other powers as
are reasonably incidental thereto. The Administrative Agent (which term as used
in this sentence and in Section 10.05 and the first sentence of Section 10.06
hereof shall include reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement and in the
other Basic Documents, and shall not by reason of this Agreement or any other
Basic Document be a trustee for any Lender; (b) shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained in
this Agreement or in any other Basic Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Basic Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
Note or any other Basic Document or any other document referred to or provided
for herein or therein or for any failure by the Company or any other Person to
perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Basic Document; and (d) shall not be responsible
for any action taken or omitted to be taken by it hereunder or under any other
Basic Document or under any other document or instrument referred to or provided
for herein or therein or in connection herewith or therewith, except for its own
gross negligence or willful misconduct.
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The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Administrative Agent, together
with the consent of the Company to such assignment or transfer (to the extent
provided in Section 11.06(b) hereof).
10.02 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent. As to any matters not expressly provided
for by this Agreement or any other Basic Document, the Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Majority
Lenders or, if provided herein, in accordance with the instructions given by the
Majority Series A Lenders, the Majority Series B Lenders, the Majority Series C
Lenders or all of the Lenders as is required in such circumstance, and such
instructions of such Lenders and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders.
10.03 Defaults. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received notice from a Lender or the Company specifying
such Default and stating that such notice is a "Notice of Default". In the event
that the Administrative Agent receives such a notice of the occurrence of a
Default, the Administrative Agent shall give prompt notice thereof to the
Lenders. The Administrative Agent shall (subject to Section 10.07 hereof) take
such action with respect to such Default as shall be directed by the Majority
Lenders or, if provided herein, the Majority Series A Lenders, the Majority
Series B Lenders or the Majority Series C Lenders, provided that, unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable in the best interest of the Lenders except to the extent that this
Agreement expressly requires that such action be taken, or not be taken, only
with the consent or upon the authorization of the Majority Lenders, the Majority
Series A Lenders, the Majority Series B Lenders, the Majority Series C Lenders
or all of the Lenders.
10.04 Rights as a Lender. With respect to its Commitments and the
Loans made by it, Chase (and any successor acting as Administrative Agent) in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity. Chase (and any successor acting as Administrative Agent)
and its affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, trust or other business with the Company (and any of its
Subsidiaries or Affiliates) as if it were not acting as the Administrative
Agent, and Chase and its affiliates may accept fees and other consideration
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from the Company for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders.
10.05 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 11.03 hereof,
but without limiting the obligations of the Company under said Section 11.03,
and including in any event any payments under any indemnity that the
Administrative Agent is required to issue to any bank referred to in Section
4.02 of the Security Agreement or Section 5.02 of the In-Flight Guarantee and
Security Agreement to which remittances in respect of Accounts, as defined
therein, are to be made) ratably in accordance with the aggregate principal
amount of the Loans and Reimbursement Obligations held by the Lenders (or, if no
Loans or Reimbursement Obligations are at the time outstanding, ratably in
accordance with their respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Administrative Agent (including by any
Lender) arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement or any other Basic Document or any
other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses that the Company is obligated to pay under Section 11.03
hereof, and including also any payments under any indemnity that the
Administrative Agent is required to issue to any bank referred to in Section
4.02 of the Security Agreement or Section 5.02 of the In-Flight Guarantee and
Security Agreement to which remittances in respect of Accounts, as defined
therein, are to be made, but excluding, unless a Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
10.06 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. The Administrative Agent shall
not be required to keep itself informed as to the performance or observance by
the Company of this Agreement or any of the other Basic Documents or any other
document referred to or provided for herein or therein or to inspect the
Properties or books of the Company or any of its Subsidiaries. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of the Company or any of its Subsidiaries (or any of their
affiliates) that may come into the possession of the Administrative Agent or any
of its affiliates.
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10.07 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder and under the other Basic Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 10.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
10.08 Resignation or Removal of Administrative Agent. Subject to
the appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Company, and the Administrative Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, after consultations with the Company, appoint a successor
Administrative Agent, that shall be a bank which has an office in New York, New
York with a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 10 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent.
10.09 Consents under Basic Documents. Except as otherwise
provided in Section 11.04 hereof with respect to this Agreement, the
Administrative Agent may, with the prior consent of the Majority Lenders (but
not otherwise), (i) consent to any modification, supplement or waiver under any
of the Basic Documents or (ii) agree to additional Indebtedness being secured
under the Security Documents if the proceeds of such Indebtedness are used by
the Company directly or indirectly to finance any Acquisition; provided that,
without the consent of each Lender, the Administrative Agent shall not (except
as provided herein or in the Security Documents) release any collateral or
otherwise terminate any Lien under the Security Documents, or (except as
otherwise provided in clause (ii) above) agree to additional obligations being
secured by such collateral security (unless the Lien for such additional
obligations shall be junior to the Lien in favor of the other obligations
secured by such Security Documents), except that no such consent shall be
required, and the Administrative Agent is hereby authorized, to release any Lien
covering Property which (a) is the subject of a Disposition of Property
permitted hereunder or to which the Majority Lenders have consented, (b)
consists of the membership interests in In-Flight to which release the Majority
Lenders have consented or (c) consists of shares of any Subsidiary of the
Company that is no longer a Material Subsidiary.
10.10 Collateral Sub-Agents. Each Lender by its execution and
delivery of this Agreement agrees, as contemplated by Section 4.03 of the
Security Agreement and Section 5.02
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of the In-Flight Guarantee and Security Agreement, that, in the event it shall
hold any Permitted Investments referred to therein, such Permitted Investments
shall be held in the name and under the control of such Lender, and such Lender
shall hold such Permitted Investments as a collateral sub-agent for the
Administrative Agent thereunder. The Company by its execution and delivery of
this Agreement hereby consents to the foregoing.
10.11 Documentation Agent. The Documentation Agent identified on
the front cover page of this Agreement shall have no duties or responsibilities
hereunder other than as a Bank hereunder.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of the Administrative Agent
or any Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege under this Agreement or any Note
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement or any Note preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
11.02 Notices. All notices, requests and other communications
provided for herein and under the Security Documents (including, without
limitation, any modifications of, or waivers or consents under, this Agreement)
shall be given or made in writing (including, without limitation, by telecopy)
delivered to the intended recipient at (i) in the case of the Company and the
Administrative Agent, the "Address for Notices" specified below its name on the
signature pages hereof) and (ii) in the case of each of the Lenders, the address
(or telecopy number) set forth in its Administrative Questionnaire; or, as to
any party, at such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
11.03 Expenses, Etc. The Company agrees to pay or reimburse each
of the Lenders and the Administrative Agent for paying: (a) all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including, without
limitation, the reasonable fees and expenses of Milbank, Tweed, Xxxxxx & XxXxxx,
special New York counsel to Chase), in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement and the other Basic
Documents and the extension of credit hereunder and (ii) any modification,
supplement or waiver of any of the terms of this Agreement or any of the other
Basic Documents; (b) all reasonable costs and expenses of the Lenders and the
Administrative Agent (including, without limitation, reasonable counsels' fees)
in connection with (i) any Default and any enforcement or collection proceedings
resulting therefrom or in connection with the negotiation of any restructuring
or "work-out" (whether or not consummated), or the obligations of the Company
hereunder and (ii) the enforcement of this Section 11.03; and (c) all transfer,
stamp, documentary, intangibles or other similar taxes, assessments or charges
levied by any
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governmental or revenue authority in respect of this Agreement or any of the
other Basic Documents or any other document referred to herein or therein and
all costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated by any Basic Document or any other document referred to therein.
The Company hereby agrees (i) to indemnify the Administrative
Agent and each Lender and their respective directors, officers, employees,
attorneys and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by any of them
(including, without limitation, any and all losses, liabilities, claims, damages
or expenses incurred by the Administrative Agent to any Lender, whether or not
the Administrative Agent or any Lender is a party thereto) arising out of or by
reason of any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to the
extensions of credit hereunder or any actual or proposed use by the Company or
any of its Subsidiaries of the proceeds of any of the extensions of credit
hereunder, including, without limitation, the reasonable fees and disbursements
of counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified) and (ii) not to assert any claim against the
Administrative Agent, any Lender, any of their affiliates, or any of their
respective directors, officers, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to any of the transactions contemplated herein or
in any other Basic Document. Without limiting the generality of the foregoing,
the Company will (x) indemnify the Administrative Agent for any payments that
the Administrative Agent is required to make under any indemnity issued to any
bank referred to in Section 4.02 of the Security Agreement or Section 5.02 of
the In-Flight Guarantee and Security Agreement to which remittances in respect
to Accounts, as defined therein, are to be made and (y) indemnify the
Administrative Agent and each Lender from, and hold the Administrative Agent and
each Lender harmless against, any losses, liabilities, claims, damages or
expenses described in the preceding sentence (but excluding, as provided in the
preceding sentence, any loss, liability, claim, damage or expense incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified) arising under any Environmental Law as a result of the past,
present or future operations of the Company or any of its Subsidiaries (or any
predecessor in interest to the Company or any of its Subsidiaries), or the past,
present or future condition of any site or facility owned, operated or leased by
the Company or any of its Subsidiaries (or any such predecessor in interest), or
any Release or threatened Release of any Hazardous Materials from any such site
or facility, including any such Release or threatened Release which shall occur
during any period when the Administrative Agent or any Lender shall be in
possession of any such site or facility following the exercise by the
Administrative Agent or any Lender of any of its rights and remedies hereunder
or under any of the Security Documents but only to the extent that such Release
or threatened Release is directly or indirectly attributable to facts,
circumstances or Releases of Hazardous Materials existing prior to the date of
such possession.
11.04 Amendments, Etc. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be modified or supplemented
only by an
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instrument in writing signed by the Company, the Administrative Agent and the
Majority Lenders, or by the Company and the Administrative Agent acting with the
consent of the Majority Lenders, and any provision of this Agreement may be
waived by the Majority Lenders or by the Administrative Agent acting with the
consent of the Majority Lenders; provided that: (a) no modification, supplement
or waiver shall, unless by an instrument signed by all of the Lenders or by the
Administrative Agent acting with the consent of all of the Lenders: (i)
increase, or extend the term of any of the Commitments, or extend the time or
waive any requirement for the reduction or termination of any of the
Commitments, (ii) extend the date fixed for the payment of principal of or
interest on any Loan, the Reimbursement Obligations or any fee hereunder, (iii)
reduce the amount of any such payment of principal, (iv) reduce the rate at
which interest is payable thereon or any fee is payable hereunder, (v) alter the
rights or obligations of the Company to prepay Loans, (vi) alter the terms of
this Section 11.04, (vii) modify the definition of the term "Majority Lenders",
"Majority Series A Lenders", "Majority Series B Lenders" or "Majority Series C
Lenders", or modify in any other manner the number or percentage of the Lender
required to make any determinations or waive any rights hereunder or to modify
any provision hereof, or (viii) waive any of the conditions precedent set forth
in Section 6 hereof; (b) any modification or supplement of Section 10 hereof
shall require the consent of the Administrative Agent; and (c) notwithstanding
the above, (i) Sections 2.01(a), 2.03(A), 2.04(a) and 2.05(i), may be modified
or supplemented only by an instrument in writing signed by the Company, the
Administrative Agent and the Series A Lenders, or by the Company and the
Administrative Agent acting with the consent of the Series A Lenders, and any
such provision may be waived by the Series A Lenders or by the Administrative
Agent acting with the consent of the Series A Lenders, (ii) Sections 2.01(b),
2.04(b) and 2.05(ii) may be modified or supplemented only by an instrument in
writing signed by the Company, the Administrative Agent and the Series B
Lenders, or by the Company and the Administrative Agent acting with the consent
of the Series B Lenders, and any such provision may be waived by the Series B
Lenders or by the Administrative Agent acting with the consent of the Series B
Lenders, (iii) Sections 2.01(c), 2.03(B), 2.04(c) and 2.05(iii), may be modified
or supplemented only by an instrument in writing signed by the Company, the
Administrative Agent and the Series C Lenders, or by the Company and the
Administrative Agent acting with the consent of the Series C Lenders, and any
such provision may be waived by the Series C Lenders or by the Administrative
Agent acting with the consent of the Series C Lenders and (iv) Section 5.06 may
be modified or supplemented only by an instrument in writing signed by the
Company, the Administrative Agent and the Series A Lenders and Series C Lenders,
or by the Company and the Administrative Agent acting with the consent of the
Series A Lenders and Series C Lenders, and any such provision may be waived by
the Series A Lenders and Series C Lenders or by the Administrative Agent acting
with the consent of the Series A Lender and Series C Lenders.
11.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11.06 Assignments and Participations.
------------------------------
(a) The Company may not assign any of its rights or obligations
hereunder or under the Notes without the prior consent of all of the Lenders and
the Administrative Agent.
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(b) Each Lender may assign any of its Loans, its Notes, its
Commitments, and, if such Lender is a Series A Lender or Series C Lender, its
Letter of Credit Interest (but only with the consent of the Company and the
Administrative Agent and, in the case of a Series A Commitment, Series A Letter
of Credit Interest or Series C Letter of Credit Interest, the Issuing Lender,
which consents in the case of the Company and the Administrative Agent shall not
be unreasonably withheld or delayed); provided that (i) no such consent by the
Company, the Administrative Agent or the Issuing Lender shall be required in the
case of any assignment by Chase of its Series C Commitment, Series C Letter of
Credit Interest or Series C Loans so long as Chase continues to hold a Series C
Commitment in excess of $25,000,000, (ii) no such consent by the Company or the
Administrative Agent shall be required in the case of any assignment to another
Lender or an affiliate thereof; (iii) any such partial assignment shall be in an
amount at least equal to $5,000,000; (iv) unless the Company and the
Administrative Agent shall otherwise consent (which consents shall not be
unreasonably withheld or delayed), each such assignment by a Lender of its
Series A Loans, Series A Note, Series A Commitment or Series A Letter of Credit
Interest shall be made in such manner so that the same percentage of its Series
A Loans, Series A Note, Series A Commitment and Series A Letter of Credit
Interest, Series B Loans, Series B Note and Series B Commitment is assigned to
the respective assignee; (v) unless the Company and the Administrative Agent
shall otherwise consent (which consents shall not be unreasonably withheld or
delayed), each such assignment by a Lender of its Series B Loans, Series B Note
or Series B Commitment shall be made in such manner so that the same percentage
of its Series B Loans, Series B Note and Series B Commitment, Series A Loans,
Series A Note, Series A Commitment and Series A Letter of Credit Interest is
assigned to the respective assignee and (vi) unless the Company and the
Administrative Agent shall otherwise consent (which consents shall not be
unreasonably withheld or delayed), each such assignment by a Lender of its
Series C Loans, Series C Note, Series C Commitment or Series C Letter of Credit
Interest shall be made in such manner so that the same percentage of its Series
C Loans, Series C Note, Series C Commitment and Series C Letter of Credit
Interest is assigned to the respective assignee. Upon execution and delivery by
the assignee to the Company, the Administrative Agent and the Issuing Lender of
an instrument in writing pursuant to which such assignee agrees to become a
"Lender" hereunder (if not already a Lender) having the Commitment(s), Loans,
and, if applicable, Letter of Credit Interest specified in such instrument, and
upon consent thereto by the Company, the Administrative Agent and the Issuing
Lender, to the extent required above, the assignee shall have, to the extent of
such assignment (unless otherwise provided in such assignment with the consent
of the Company, the Administrative Agent and the Issuing Lender), the
obligations, rights and benefits of a Lender hereunder holding the
Commitment(s), Loans and, if applicable, Letter of Credit Interest (or portions
thereof) assigned to it (in addition to the Commitment(s), Loans and Letter of
Credit Interest, if any, theretofore held by such assignee) and the assigning
Lender shall, to the extent of such assignment, be released from the
Commitment(s) (or portion(s) thereof) so assigned. Upon each such assignment the
assigning Lender shall pay the Administrative Agent an assignment fee of $3,000.
(c) A Lender may sell or agree to sell to one or more other
Persons a participation in all or any part of any Loans or Letter of Credit
Interest held by it, or in its Commitments, in which event each purchaser of a
participation (a "Participant") shall be entitled to the rights and benefits of
the provisions of Section 8.01(j) hereof with respect to its participation in
such Loans,
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Letter of Credit Interest and Commitments as if (and the Company shall be
directly obligated to such Participant under such provisions as if) such
Participant were a "Lender" for purposes of said Section, but, except as
otherwise provided in Section 4.07(c) hereof, shall not have any other rights or
benefits under this Agreement or any Note or any other Basic Document (the
Participant's rights against such Lender in respect of such participation to be
those set forth in the agreements executed by such Lender in favor of the
Participant). All amounts payable by the Company to any Lender under Section 5
hereof in respect of Loans, Letter of Credit Interest held by it, and its
Commitments, shall be determined as if such Lender had not sold or agreed to
sell any participations in such Loans, Letter of Credit Interest and
Commitments, and as if such Lender were funding each of such Loan, Letter of
Credit Interest and Commitments in the same way that it is funding the portion
of such Loan, Letter of Credit Interest and Commitments in which no
participations have been sold. In no event shall a Lender that sells a
participation agree with the Participant to take or refrain from taking any
action hereunder or under any other Basic Document except that such Lender may
agree with the Participant that it will not, without the consent of the
Participant, agree to (i) increase or extend the term, or extend the time or
waive any requirement for the reduction or termination, of such Lender's related
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the related Loan or Loans, Reimbursement Obligations or any portion
of any fee hereunder payable to the Participant, (iii) reduce the amount of any
such payment of principal, (iv) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a level below the
rate at which the Participant is entitled to receive such interest or fee, (v)
alter the rights or obligations of the Company to prepay the related Loans or
(vi) consent to any modification, supplement or waiver hereof or of any of the
other Basic Documents to the extent that the same, under Section 10.10 or 11.04
hereof, requires the consent of each Lender.
(d) In addition to the assignments and participations permitted
under the foregoing provisions of this Section 11.06, any Lender may assign and
pledge all or any portion of its Loans and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release the
assigning Lender from its obligations hereunder.
(e) A Lender may furnish any information concerning the Company
or any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 11.12(b) hereof.
(f) Anything in this Section 11.06 to the contrary
notwithstanding, no Lender may assign or participate any interest in any Loan or
Reimbursement Obligation held by it hereunder to the Company or any of its
Affiliates or Subsidiaries without the prior written consent of each Lender.
11.07 Survival. The obligations of the Company under Sections
5.01, 5.05, 5.06, 5.07 and 11.03 hereof and the obligations of the Lenders under
Sections 10.05 and 11.12 hereof shall survive the repayment of the Loans and
Reimbursement Obligations and the termination of the Commitments. In addition,
each representation and warranty made, or deemed to be made by a notice of any
extension of credit (whether by means of a Loan or a Letter of Credit), herein
or
- 80 -
pursuant hereto shall survive the making of such representation and warranty,
and no Lender shall be deemed to have waived, by reason of making any extension
of credit hereunder (whether by means of a Loan or a Letter of Credit), any
Default which may arise by reason of such representation or warranty proving to
have been false or misleading, notwithstanding that such Lender or the
Administrative Agent may have had notice or knowledge or reason to believe that
such representation or warranty was false or misleading at the time such
extension of credit was made.
11.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
11.09 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.10 Governing Law; Submission to Jurisdiction. This Agreement
and the Notes shall be governed by, and construed in accordance with, the law of
the State of New York. The Company hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of the Supreme Court of the State of New York sitting in New York
County (including its Appellate Division), and any other appellate court in the
State of New York, for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The Company
irrevocably waives, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
11.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.12 Treatment of Certain Information; Confidentiality.
(a) The Company acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Company or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Lender or by one or more subsidiaries or
affiliates of such Lender and the Company hereby authorizes each Lender to share
any information delivered to such Lender by the Company and its Subsidiaries
pursuant to this Agreement, or in connection with the decision of such Lender to
enter into this Agreement, to any such subsidiary or affiliate, it being
understood that any such subsidiary or affiliate receiving such information
shall be bound by the provisions of clause (b) below as if it were a Lender
hereunder.
- 81 -
(b) Each Lender and the Administrative Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Company pursuant to this Agreement
which is identified by the Company as being confidential at the time the same is
delivered to the Lenders or the Administrative Agent, provided that nothing
herein shall limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process, (ii) to counsel for
any of the Lenders or the Administrative Agent, (iii) to bank examiners,
auditors or accountants, (iv) to the Administrative Agent or any other Lender
(or to Chase Securities Inc.), (v) in connection with any litigation to which
any one or more of the Lenders or the Administrative Agent is a party, (vi) to a
subsidiary or affiliate of such Lender as provided in clause (a) above or (vii)
to any assignee or participant (or prospective assignee or participant) so long
as such assignee or participant (or prospective assignee or participant) first
executes and delivers to the respective Lender a Confidentiality Agreement
substantially in the form of Exhibit B hereto; provided, further, that (x)
unless specifically prohibited by applicable law or court order, each Lender and
the Administrative Agent shall, prior to disclosure thereof, notify the Company
of any request for disclosure of any such non-public information (A) by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Lender by such
governmental agency) or (B) pursuant to legal process and (y) in no event shall
any Lender or the Administrative Agent be obligated or required to return any
materials furnished by the Company.
11.13 Amended and Restated Security Agreement. The Company hereby
confirms that all references in the Security Agreement to the "Credit Agreement"
mean this Agreement as modified and supplemented and in effect from time to time
and that, as of the Amendment Effective Date, Annex 1 to the Security Agreement
is amended to read in its entirety as Annex 2 hereto and Annex 7 to the Security
Agreement is amended to read in its entirety as Annex 3 hereto.
- 82 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
BE AEROSPACE, INC.
By
----------------------------
Title:
Address for Notices:
BE Aerospace, Inc.
0000 Xxxxxxxxx Xxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx,
Vice President and Treasurer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
- 83 -
LENDERS
THE CHASE MANHATTAN BANK
By
-------------------------
Title:
NATIONSBANK, N.A.
By
-------------------------
Title:
CREDIT LYONNAIS ATLANTA AGENCY
By
-------------------------
Title:
LASALLE BUSINESS CREDIT, INC.
By
-------------------------
Title:
- 84 -
THE LONG-TERM CREDIT BANK
OF JAPAN, LTD.
By
-------------------------
Title:
THE FUJI BANK AND TRUST COMPANY
By
-------------------------
Title:
WACHOVIA BANK, N.A.
By
-------------------------
Title:
AMSOUTH BANK
By
-------------------------
Title:
THE BANK OF NEW YORK
By
-------------------------
Title:
- 85 -
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH
By
-------------------------
Title:
By
-------------------------
Title:
FIRST UNION NATIONAL BANK
By
-------------------------
Title:
SUNTRUST BANK, SOUTH FLORIDA, N.A.
By
-------------------------
Title:
ABN AMRO BANK N.V.
By
-------------------------
Title:
By
-------------------------
Title:
- 86 -
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
-------------------------
Title:
Address for Notices to
Chase as Administrative Agent:
The Chase Manhattan Bank
Loan and Agency Services Group
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Annex 1
Series A Series B Series C Total
Bank Commitment Commitment Commitments Commitments
---- ---------- ---------- ----------- -----------
The Chase Manhattan Bank $ 11,000,000 $ 11,000,000 $ 15,000,000 $ 37,000,000
NationsBank, N.A. $ 10,000,000 $ 10,000,000 $ 15,000,000 $ 35,000,000
Credit Lyonnais Atlanta Agency $ 9,500,000 $ 9,500,000 $ 9,000,000 $ 28,000,000
LaSalle Business Credit, Inc. $ 9,500,000 $ 9,500,000 $ 12,000,000 $ 31,000,000
The Long-Term Credit Bank $ 9,500,000 $ 9,500,000 $ 9,000,000 $ 28,000,000
of Japan, Ltd.
The Fuji Bank and Trust Company $ 9,500,000 $ 9,500,000 $ 12,000,000 $ 31,000,000
Wachovia Bank, N.A. $ 9,500,000 $ 9,500,000 $ 12,000,000 $ 31,000,000
Amsouth Bank $ 6,000,000 $ 6,000,000 $ 0 $ 12,000,000
The Bank of New York $ 6,000,000 $ 6,000,000 $ 9,000,000 $ 21,000,000
DG Bank Deutsche Genossenschaftsbank $ 6,000,000 $ 6,000,000 $ 9,000,000 $ 21,000,000
Cayman Island Branch
First Union National Bank $ 6,000,000 $ 6,000,000 $ 12,000,000 $ 24,000,000
SunTrust Bank, South Florida, N.A. $ 6,000,000 $ 6,000,000 $ 6,000,000 $ 18,000,000
ABN Amro Bank N.V. $ 1,500,000 $ 1,500,000 $ 0 $ 3,000,000
------------ ------------ ------------ ------------
Totals $100,000,000 $100,000,000 $120,000,000 $320,000,000
SCHEDULE I
Material Agreements and Liens
[See Sections 7.12 and 8.07(b)]
Part A - Material Agreements
-------------------
1. Indenture dated as of February 13, 1998 between the Company, as
issuer, and the United States Trust Company of New York, as
trustee, in connection with $250,000,000 of 8% Senior Subordinated
Notes of the Company.
2. Loan agreement dated February 24, 1993 between the Company's
subsidiary B/E Aerospace (UK) Limited, a Northern Ireland
corporation, ("BEA-UK") and Barclays Bank PLC ("Barclays"), as
amended, providing for an overdraft facility in the aggregate
principal amount of (pound)5,000,000.
3. Guarantee dated February 24, 1993 by the Company to Barclays
Limited to (pound)2,750,000 of the indebtedness of B/E Aerospace
(UK) Limited described in Item 2 above.
4. Loan agreement between Royal Inventum B.V. and InG Bank dated July
14, 1993 in the aggregate principal amount of Dfl. 2,000,000.
5. Acquisition Agreement among the Company, Xxxxxx X. Xxxxxxxx and
Xxxxxxxx Industries, Inc. dated July 27, 1993. (Acquisition
purchase price adjustments unknown).
6. Capitalized lease obligations B/E Aerospace (UK) Limited for
machinery and equipment in the aggregate amount of $600,000.
7. Indebtedness of BE Aerospace (Netherlands) B.V. to the Company in
an aggregate principal amount not in excess of Dfls. 49,385,000.
8. Indenture dated as of January 24, 1996 between the Company and
First National Bank of Connecticut, as trustee, in connection with
$100,000,000 of 9-7/8% Senior Subordinated Notes due 2006.
9. Acquisition Agreement dated as of December 14, 1995, among the
Company, Xxxxx Aerospace Corporation, Eagle Industrial Products
Corporation, Eagle Industries, Inc. and Great American Management
and Investment, Inc. (Acquisition purchase price adjustment
unknown.)
10. Agreement and Plan of Reorganization and Merger by and among BE
Aerospace, Inc., BE Acquisition Corp., Aerospace Interiors, Inc.,
Xxxxxxx and Xxxxxxx
- 2 -
Xxxxxx Partnership, Ltd., Xxxxxxx and Xxxxxxx Xxxxxx Partnership
II, Ltd. and Xxxxxxx X. Xxxxxx dated March 27, 1998 ($5.6 million).
11. Stock Purchase Agreement dated as of March 31, 1998 by and between
Puritan-Xxxxxxx Aero Systems Corp. and BE Aerospace, Inc. ($69.7
million, subject to purchase price adjustments).
12. Re-Formation Agreement dated as of February 10, 1998 among the
Company, In-Flight, Xxxxxx Corporation, In-Flight Phone Corporation
and B/E Xxxxxx LiveTV, LLC.
13. Amended and Restated Limited Liability Company Agreement dated as
of February 10, 1998 of B/E Xxxxxx LiveTV, LLC.
14. Fifth Amended and Restated Credit Agreement dated as of October 29,
1993 amended and restated as of August 7, 1998 between BE
Aerospace, Inc. and The Chase Manhattan Bank.
15. Amended and Restated Security Agreement dated as of October 29,
1993, amended and restated as of April 3, 1998 between BE
Aerospace, Inc. and The Chase Manhattan Bank.
16. Amended and Restated Guarantee and Security Agreement dated as of
November 19, 1997 amended and restated as of August 7, 1998 between
In-Flight Entertainment, LLC and The Chase Manhattan Bank.
17. Asset Purchase Agreement dated as of April 16, 1998 between
Stanford Aerospace Group, Inc. and BE Aerospace, Inc. ($117.3
million).
18. Agreement and Plan of Reorganization and Merger dated as of July
30, 1998 by and among BE Aerospace, Inc., BE Aerospace Acquisition
Corp., Aerospace Lighting Corporation and the Stockholders of
Aerospace Lighting Corporation ($31.3 million).
19. Acquisition Agreement dated as of July 21, 1998 by and among BE
Aerospace, Inc. and the SMR Sellers for the outstanding stock of
SMR Aerospace, Inc. ($142 million).
- 3 -
Part B - Liens
-----
BE Aerospace, Inc.
------------------
1. California
a. UCC - Secretary of State
(i) 1st Source Bank, filed September 3, 1993, file number
93180963. Certain leased machining equipment
(ii) The Chase Manhattan Bank, filed November 3, 1993, file
number 93221435. Blanket filing.
(iii) UJB Leasing Corporation, filed December 1, 1994, file
number 0000000000. Miscellaneous equipment.
(iv) Hewlett-Packard Company Finance and Remark, filed December
4, 1994, file number 9435560656. Miscellaneous equipment.
(v) British Airways PLC, filed May 20, 1996, file number
9614460354. Miscellaneous equipment.
(vi) Hewlett-Packard Company Finance and Remark, filed May 6,
1997, file number 9712861105. Certain leased equipment and
related tangible and intangible property.
(vii) Pullman Bank & Trust Company, filed August 20, 1997, file
number 9723460500. Certain leased equipment and related
tangible property.
(viii) Telogy, Inc., filed December 15, 1997, file number
975360190. Certain leased equipment.
2. Connecticut
-----------
a. UCC - Secretary of State
(i) The Chase Manhattan Bank, filed November 3, 1993, file
number 1034166; Blanket; Amendment filed February 1, 1996,
file number 1678686 (Debtor address change); Partial
Release filed December 16, 1996, file number 1741071
(miscellaneous equipment).
- 4 -
(ii) UJB Leasing Corporation, filed August 23, 1994, file
number 1070220. Miscellaneous leased equipment.
(iii) UJB Leasing Corporation, filed September 8, 1994, file
number 1574243. Miscellaneous leased equipment.
(iv) UJB Leasing Corporation, filed January 23, 1995, file
number 1600177. Miscellaneous Leased Equipment.
(v) Bankers Leasing Association, Inc., filed December 20,
1996, file number 1739286. Miscellaneous office equipment.
(vi) General Electric Capital Corporation, filed March 5, 1997,
file number 1754332. Leased aircraft.
3. Florida
-------
a. UCC - Secretary of State
(i) NationsBanc Leasing Corporation, filed March 22, 1993,
file number 9360950. Certain leased equipment;
Continuation, filed March 3, 1998, file number 9846659.
(ii) The Chase Manhattan Bank, filed November 4, 1993, file
number 930000227345, Blanket; Amendment filed January 31,
1996, file number 960000020922 (Debtor address change);
Partial Release filed December 16, 1996, file number
960000262425 (miscellaneous equipment); Partial Release
filed December 3, 1997, file number 970000271483
(miscellaneous equipment); Amendment filed December 11,
1997, file number 970000277923.
(iii) UJB Leasing Corporation, filed September 6, 1994, file
number 940180451. Miscellaneous leased equipment.
(iv) United Jersey Bank, filed September 7, 1994, file number
940182527. Miscellaneous leased equipment.
(v) General Electric Capital Corporation filed March 5, 1997,
file number 97047206. Leased aircraft.
(vi) General Electric Capital Corporation filed December 3,
1997, file number 970271431. Leased computer system.
(vii) General Electric Capital Corporation filed March 11, 1998,
file number 98054023. Leased computer equipment.
- 5 -
b. UCC - Palm Beach County Clerk of Circuit Court, Florida
(i) General Electric Capital Corporation filed December 3,
1997, file number 97-430801. Leased computer system.
(ii) General Electric Capital Corporation filed March 12, 1998,
file number 98-086001. Leased computer equipment.
4. North Carolina
--------------
a. UCC - Secretary of State
(i) The Chase Manhattan Bank N.A. filed January 30, 1996, file
number 1304283, blanket; partial release filed December 3,
1997, file number 001520696.
(ii) General Electric Capital Corporation filed June 23, 1997,
file number 1467282, leased machinery.
(iii) General Electric Capital Corporation filed December 3,
1997, file number 001528953. Leased computer system.
b. UCC - Forsyth County, North Carolina
(i) The Chase Manhattan Bank, filed January 29, 1996, file
number 215975, blanket; partial release filed December 3,
1997, file number 224501.
(ii) General Electric Capital Corporation filed December 3,
1997, file number 224500. Leased computer system.
(iii) General Electric Capital Corporation filed March 11, 1998,
file number 226702. Leased computer system.
In-Flight Entertainment, LLC
----------------------------
1. California
----------
a. UCC - Secretary of State
(i) The Chase Manhattan Bank, filed December 11, 1997, file
number 9734960163. Blanket filing.
- 6 -
2. In-Flight Entertainment, LLC, doing business as BE Aerospace, Inc.
a. UCC - California Secretary of State
(i) The Chase Manhattan Bank, filed December 11, 1997, file
number 9734960155. Blanket filing.
3. In-Flight Entertainment, LLC, doing business as In-Flight Entertainment
a. UCC - California Secretary of State
(i) The Chase Manhattan Bank, filed December 11, 1997, file
number 9734960171. Blanket filing.
B/E Aerospace (UK) Limited
--------------------------
The Indebtedness of B/E Aerospace (UK) Limited identified in Section 2
of Part A of this Schedule I is cross-collateralized in the U.K. by the
following:
1. A Debenture over the assets of B/E Aerospace (UK) Limited on Barclays'
standard form dated 19th November 1982.
2. The Company's guarantee referred to in Section 4 of Part A of this Schedule
I.
3. A Letter of Set Off allowing Barclays' to combine any account, Sterling or
Currency dated May 8, 1989.
SCHEDULE II
Hazardous Materials
-------------------
[See Section 7.13]
1. Litchfield, CT, facility historically did not have state or federal
clean Water Act permits authorizing discharge of wastewater to the
Bantam River. The discharge has been substantially eliminated as of this
date.
2. Litchfield, CT, facility may not have required air permits for air
emissions associated with paint booths and adhesive operations. A
request for determination of the need for permits has been made to the
state officials.
3. In 1992, the Garden Grove, CA, facility paid a $45,000 penalty for
violation of air pollution regulations.
4. The Route 209 facility of Pullman in Bantam, CT, is an interim status
facility under RCRA. There appears to be documentary evidence that waste
from the Route 209 facility may have been transshipped through the
Litchfield, CT, facility, raising potential issues of RCRA compliance
relating to the Litchfield, CT facility.
5. Asbestos-containing materials may be present in the Litchfield, CT,
facility. A preliminary investigation has been completed and does not
indicate any large-scale concerns.
6. Hazardous Materials have been detected in the soils and groundwater at
the Litchfield, CT facility. A groundwater assessment is ongoing under
the supervision of the CTDEP. The latest groundwater monitoring reports
show that contaminant levels in groundwater meet applicable standards.
7. Certain sites to which the Company and its Subsidiaries may have sent
waste which are listed on CERCLIS, or any similar state or local list or
are under investigation by governmental agencies are set forth in
Exhibits 3-2, 3-3, 3-4 and 3-5 of the ICF Xxxxxx, Engineers report
entitled "Environmental Assessment of PTC Aerospace and Aircraft
Products Companies Final Report" dated February 14, 1992 and, with
respect to the Xxxxx Aerospace facility, in a report entitled "Phase I
Environmental Due Diligence Examination of the Xxxxx Aerospace
Corporation, Winston-Salem, North Carolina, dated January 1994, prepared
by ENSR Consulting and Engineering".
8. The Litchfield, CT, facility has two utility-owned transformers, one
contains less than 50 ppm PCBs. The other contains 63 ppm PCBs.
9. Hazardous waste from the Altamonte Springs, Florida facility was sent to
the Chemical Conservation Corporation landfill in Valdosta, Georgia
which is on the CERCLIS list.
- 2 -
10. Hazardous waste from the Altamonte Springs, Florida site may have been
disposed of at the Seabord Chemical site in North Carolina, which is
being remediated under consent order with the State of North Carolina.
11. Certain xxxxx upgradient of the Anaheim, California site have been
impacted by dichlorodifluoromethane (refrigerant) and trichloroethane
(degreaser), both of which are believed to have been used by the
predecessor of Acurex.
12. At a facility in Santa Ana, California which EECO Incorporated, a former
owner of part of the BE Avionics business, owned and later leased, there
may have been some seepage into the soil of toxic materials involved in
metal plating, including arsenic. The Company purchased the BE Avionics
business from EECO in a 1989 asset acquisition, and EECO has
subsequently filed for bankruptcy protection and is no longer in
operation. The BE Avionics business was never conducted in the affected
facility.
13. Certain of the ovens manufactured by Xxxxxxxx prior to 1981 contain
asbestos.
14. Hazardous waste originating from the Xxxxx Aerospace, Winston-Salem,
North Carolina facility may have been shipped to the Seaboard Chemical
site in North Carolina which is listed on CERCLIS. In 1991, a letter was
received from the North Carolina Department of Environment, Health and
National Resources indicating that Xxxxxxxxx Xxxxx Company was a de
minimis contributor of waste to that site. By letter dated February 26,
1992 Xxxxx Aerospace Corporation notified Xxxxxxxxx Industries, from
whom it had acquired the Winston-Salem facility, that Xxxxxxxxx
Industries was responsible for that liability.
15. In May, 1994, the Company received notice that it was considered a de
minimis PRP with respect to the Frontier Chemical Site in Niagara Falls,
NY relating to a shipment of waste from the Litchfield, CT facility in
1992. The Company joined a group of de minimis PRPs that performed
certain actions under an Administrative Consent Order with EPA. The
Company believes that it has fully settled its liability with respect to
the site through payment to the group.
16. The roof at the Chesham, UK facility may contain asbestos cement-root
sheeting.
Compliance Issues
-----------------
PTC Aerospace, Litchfield, CT
-----------------------------
(1) Facility is listed on the CERCLIS Data Base.
(2) Pursuant to a Notice of Violation issued by the Connecticut DEP in
March, 1992, the Facility has implemented a RCRA closure plan and has
upgraded record keeping and training functions.
- 3 -
PTC Aerospace, Garden Grove, CA
-------------------------------
(1) Oily compressor blowdown is discharged directly to the ground.
(2) Facility does not comply with state RCRA regulations governing
generators of less than 1,000 kilograms of hazardous waste per month.
(3) Facility does not comply with state OSHA requirements governing a
written respiratory protection program, personnel training and record
keeping, personnel medical monitoring, and other worker safety and
health requirements.
(4) Facility may require NPDES storm water discharge permit.
Aircraft Products Company, Delray Beach, FL
-------------------------------------------
(1) Facility has not applied for an air emissions permit or conditional
exemption from the State for its air emission sources.
(2) Paint booth filters, empty drums, and solvent-contaminated rags are
disposed of as nonhazardous solid wastes.
(3) Not all hazardous waste drums were properly labeled.
(4) Unused chemicals are stored onsite that are no longer used in the
production process and should be disposed of as hazardous waste.
(5) Plant does not have a written respiratory protection program or a
hearing conservation program, although such protection is provided to
employees.
(6) Plant may require an NPDES storm water discharge permit.
Aircraft Products Company, Jacksonville, FL
-------------------------------------------
(1) Facility has no data to indicate that its nonhazardous solid wastes,
which include solvent-contaminated rags, are properly disposed of as
nonhazardous waste.
(2) The facility qualifies currently as a large quantity generator of
regulated hazardous wastes but does not comply with the RCRA
requirements applicable to these generators or to the storage of wastes
onsite for less than 90 days.
(3) Unused chemicals are stored onsite that are no longer used in the
production process and should be disposed of as nonhazardous waste.
- 4 -
(4) Areas designed for hazardous waste drum storage are not posted as such
or signs are obscured.
(5) Plant personnel with responsibility to handle hazardous wastes have not
received the requisite health and safety training.
(6) Containers of hazardous materials are not consistently labeled as to the
hazards they may present to worker health and safety.
(7) Plant does not have a written respiratory protection program nor are
employees fit tested to wear respirators as required by OSHA.
(8) Plant may require an NPDES storm water discharge permit.
Xxxxxxxx Industries, Inc., Van Nuys, CA
---------------------------------------
(1) Several facilities to which hazardous waste may have been shipped for
disposal are on the CERCLIS data base, as noted in Table 1 of the June
4, 1993 Draft Phase I Environmental Site Assessment.
(2) There may be a compliance issue concerning the mixing of hazardous and
non-hazardous wastes prior to 1984.
(3) The facility has had historical problems meeting effluent standards for
metal finishing. Wastewater is treated in an on-site clarifier prior to
discharge to the municipal sewer.
(4) Xxxxxxxx received a Notice to Comply dated July 21, 1993 from the South
Coast Air Quality Management District requiring Xxxxxxxx to (i) keep
more detailed usage records as required by Rule 109, including all "VOC"
and vapor pressure information, (ii) use only HLVP or 65% efficient
spray equipment, (iii) use only closed containers for all solvents, and
(iv) use only Rule 1171 and 1124 compliance cleaning solvents.
Status of Mountain View, CA Property
------------------------------------
The Prudential Insurance Company of America ("Prudential") is the owner
of property known as 000 Xxxxx Xxxxxx (Xxxxxxxx 0), Xxxxxxxx Xxxx, Xxxxxxxxxx
(the "Property"). Acurex Corporation ("Acurex") owned the Property in the early
1970s and then entered into a sale-leaseback arrangement with Prudential in
connection with the Property. The Property itself sits on part of a very large
contamination plume said to result from discharges into the soil and groundwater
from a nearby Hewlett Packard manufacturing facility. As of the date hereof, the
Company believes that the municipal authorities in Mountain View do not intend
to commence an environmental clean-up in connection with the plume and do not
intend to permit any owner of property on or contiguous with the plume to
commence a clean-up of such owner's property.
- 5 -
In 1992, pursuant to an Amended and Restated Agreement and Plan of
Merger (the "Merger Agreement") among Acurex, Xeruca, Inc. and others, the lease
was assigned from Acurex to Xeruca. The Merger Agreement included an indemnity
from Xeruca to Acurex for, among other things, those liabilities associated with
the Property. In connection with the expiration of the lease for the Property on
July 13, 1993, Prudential requested that Acurex execute an indemnification
agreement whereby Xeruca would agree to clean-up the Property (if and when
permitted by the municipal authorities) and provide a general indemnity for
matters related to the clean-up while Acurex would agree to guarantee Xeruca's
performance and indemnify Prudential for Xeruca's failure to perform its
obligations. Acurex refused to enter into this agreement, and Prudential
threatened to xxx Acurex to compel it to acknowledge such alleged
indemnification obligations.
This dispute between Acurex and Prudential was resolved by an Agreement
made as of August 27, 1993 (the "Settlement Agreement") among Prudential, Xeruca
and Acurex. Pursuant to the Settlement Agreement, Xeruca agreed to indemnify
Prudential with respect to environmental claims related to the Property. In
addition, Acurex assigned to Prudential the benefit of the indemnification
provisions from Xeruca under the Merger Agreement with respect to environmental
claims related to the Property. As a result of the Settlement Agreement, Acurex
is now a co-beneficiary with Prudential of Xeruca's indemnification obligations
and Prudential has released and forever discharged Acurex from any and all
claims that Acurex is obligated to sign an indemnification agreement with
Prudential.
No lawsuit is currently pending or threatened against Acurex in
connection with the Property.
Xxxxx Aerospace - Winston-Salem, NC
-----------------------------------
Contaminants have been detected in the soil and groundwater at the former
Xxxxx-Aerospace facility at levels that may require remediation under the
regulations of the North Carolina Department of Environmental Health and Natural
Resources. Initial conditions at the site at the time of purchase are described
in a report entitled "Site Characterization Report" dated January 19, 1996,
prepared by Groundwater Technology. Further site assessment work is being
conducted by the Company that includes groundwater and soils testing. The
Company has informed the Seller of the facility, Eagle Industries, that the
environmental remedial costs are subject to the indemnification claims of the
purchase contract. Certain other compliance issues at the facility are
identified in a report entitled "Environmental Survey and Compliance
Evaluation," prepared by Environmental Quality Management, dated February 21,
1996.
SCHEDULE III
Subsidiaries and Investments
[See Sections 7.17 and 8.08(a)]
Part A - Subsidiaries
------------
Book Value
Jurisdiction of Assets
of (in millions)
Subsidiary Organization Owners Ownership as of 5/30/98
---------- ------------ ------ --------- -------------
1BE Aerospace Barbados Acurex 100% Non-material
International, Ltd. ("N.M.")
BE Aerospace (UK) England BEA 100% $107
Holdings Limited
("BEA-Holdings")
BE Aerospace (UK) Northern Ireland BEA Holdings 100% $107
Limited ("BEA-UK")
------
0Xxxx Xxxx Xxxxxxxx Xxxxxxxx Xxxxxxx BEA-UK 100% N.M.
Limited ("AFL")
---
1AFI Holdings Limited Northern Ireland BEA-UK 100% N.M.
1Burns Aerospace France BEA 100% N.M.
S.A.R.L.
1BE Aerospace France BEA 98.00% N.M.
(France) S.A.R.L. K.A.D. 1.00%
Companies, Inc. 1.00%
Xxxx Xxxxxxxx
(director)
BE Aerospace Delaware BEA 100% N.M.
(U.S.A.), Inc.
Puritan-Xxxxxxx California BEA 100% $43
Aero Systems Corp.
- 2 -
Book Value
Jurisdiction of Assets
of (in millions)
Subsidiary Organization Owners Ownership as of 5/30/97
---------- ------------ ------ --------- -------------
BE Intellectual Delaware BEA 100% $ 3
Property, Inc.
BE Aerospace Netherlands BEA 90% $37
(Netherlands) B.V. BEA (U.S.A.) 10%
("XXX-Xxxx")
Royal Inventum B.V. Netherlands XXX-Xxxx 96.60%* $36
BE Aerospace (Sales Netherlands XXX-Xxxx 100% N.M.
and Services) B.V.
Acurex Corporation Delaware BEA 100% $63
("Acurex")
B/E Aerospace Delaware BEA 100% $11
Services, Inc.
B/E Advanced Thermal Delaware BEA 100% $ 1
Technologies, Inc.
1Nordskog California BEA 100% N.M.
Industries, Inc.
Aerospace Interiors, Texas BEA 100% $ 3
Inc.
In-Flight Entertain- Delaware BEA 100% $64
ment, LLC
Aerospace Lighting New York BEA 100% $3**
Corporation
SMR Aerospace, Inc. Ohio BEA 100% $44**
- 3 -
----------------
1 Specified Subsidiary as defined in the Credit Agreement.
* The balance of these shares were lost prior to the sale of the shares of
this entity to BEA.
** Book value of assets as of December 31, 1997.
Part B - Investments
In addition to the Investments set forth in Part A above, as of the
date hereof the Company has the following outstanding Investments:
a. an Investment in a Middle East sales office in an amount not to
exceed $200,000;
b. cash and money market funds in the amount, as of July 31, 1998 of
approximately $20 million.
SCHEDULE IV
Approvals and Compliance
------------------------
[See Section 7.17]
None, except compliance with certain Environmental Laws disclosed
in the materials set forth in Schedule II hereto.
SCHEDULE V
Existing Letters of Credit
--------------------------
[See Section 2.03]
Letters of Credit Outstanding:
Issue Date Amount ($) LC# Expiry Date Beneficiary
---------- ---------- --- ----------- -----------
December 11, 1995 534,000.00 P-258984 December 11, 1998 National Union Fire Ins. Co.
January 10, 1995 800,000.00 P-754546 January 10, 1999 National Union Fire Ins. Co.
January 22, 1996 1,400,000.00 P-259114 January 31, 1999 Eagle Industries
March 25, 1992 307,817.00 P-751178 February 28, 1999 National Union Fire Ins. Co.
March 16, 1995 505,000.00 P-754750 March 16, 1999 National Union fire Ins. Co.
December 20, 1993 313,719.00 P-753306 May 1, 1999 CA Self Insurance Plans
May 30, 1996 786,380.00 P-259468 May 29, 1999 National Union Fire Ins. Co.
Total Letters of Credit 4,646,916.00
Outstanding:
SCHEDULE VI
Taxes
-----
[See Section 7.09]
Jurisdiction Tax Year Extended To
------------ -------- -----------
Federal 2/25/95 1/3/99
Connecticut 7/29/91 - 2/26/94 12/31/98
SCHEDULE VII
Transactions with Affiliates
----------------------------
[See Section 8.15]
[None.]
EXHIBIT C
FORM OF STANDBY LETTER OF CREDIT
The Chase Manhattan Bank
Global Trade Services Group
X.X. Xxx 00, Xxxxxx Xxxxxx Station Cable Address: XXXXXXXXXX Xxx Xxxx
Xxx Xxxx, XX 00000-0000
DATE: AUGUST __, 1998
Irrevocable Standby Letter
Of Credit Number P-374721
Applicant:
BE AEROSPACE
0000 Xxxxxxxxx Xxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
Beneficiaries:
Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxx and Xxxxx X. Xxxxx and
Xxxxx X. Xxxxxx Trust - Xxxxxxx X. Xxxx Trust - Xxxxx X. Xxxxx Trust -
1998 1998 1998
000 Xxxxx Xxxx Xxxx 000 Xxxxxxx Xxxxx 000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000 Xxxxx, XX 00000
Attn: Xxxxx Xxxxxx Attn: Xxxxxxx X. Xxxx Attn: Xxxxx X. Xxxxx
Telecopier: 000-000-0000 Telecopier: 000-000-0000 Telecopier: 000-000-0000
We hereby notify Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx Trust - 1998, Xxxxxxx X. Xxxx,
Xxxxxxx X. Xxxx Trust - 1998, and Xxxxx X. Xxxxx, Xxxxx X. Xxxxx Trust - 1998
that we have issued our Irrevocable Standby Letter of Credit Number P-374721 in
your favor by order and for account of:
BE AEROSPACE
0000 Xxxxxxxxx Xxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
Up to an aggregate amount of One Hundred Twenty Million U.S. Dollars and no
cents ($120,000,000.00)
Available by a single beneficiaries' draft at sight drawn on Xxx Xxxxx Xxxxxxxxx
Xxxx, Xxx Xxxx, Xxx Xxxx 00000.
- 2 -
ACCOMPANIED BY:
A signed certification by all of the beneficiaries that: (1) "The date is
December 31, 1998 and BE Aerospace, Inc., of 0000 Xxxxxxxxx Xxxxxx Xxx,
Xxxxxxxxxx, Xxxxxxx 00000 has failed to pay the amounts owed to the
beneficiaries pursuant to Section 2 of the Share Disposition Agreement dated as
of August 7, 1998 among Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx Trust - 1998, Xxxxxxx
X. Xxxx, Xxxxxxx X. Xxxx Trust - 1998, Xxxxx X. Xxxxx, Xxxxx X. Xxxxx Trust -
1998 and BE Aerospace and the amount of the draft accompanying this
certification is not in excess of the amount owed by BE Aerospace to the
beneficiaries thereunder" or (2) "BE Aerospace, Inc. of 0000 Xxxxxxxxx Xxxxxx
Xxx, Xxxxxxxxxx, Xxxxxxx 00000 has filed a petition for reorganization or other
relief under the Federal Bankruptcy laws and the amount of the draft
accompanying this certification is not in excess of the amount owed by BE
Aerospace to the beneficiaries pursuant to Section 2 of the Share Disposition
Agreement dated as of August 7, 1998 among Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx
Trust - 1998, Xxxxxxx X. Xxxx, Xxxxxxx X. Xxxx Trust- 1998, Xxxxx X. Xxxxx,
Xxxxx X. Xxxxx Trust - 1998 and BE Aerospace."
The available amount hereunder shall be reduced by the amount which the
beneficiaries certify to us has been paid by BE Aerospace to the beneficiaries
pursuant to Section 2 of the Share Disposition Agreement dated as of August 7,
1998 among Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx Trust - 1998, Xxxxxxx X. Xxxx,
Xxxxxxx X. Xxxx Trust - 1998, Xxxxx X. Xxxxx, Xxxxx X.
Xxxxx Trust - 1998 and BE Aerospace.
Draft must be drawn and presented at this office at 00 Xxxxx Xxxxxx, Trade
Services, Xxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 not later than January 19, 1999.
The draft drawn hereunder must be marked: "Drawn under The Chase Manhattan Bank,
New York Letter of Credit Number P-374721" and indicate the date hereof.
We hereby engage with the beneficiary that the draft drawn under and in
compliance with the terms of this credit will be duly honored.
This Letter of Credit shall be governed by the law of the State of New York, and
shall be subject to the Uniform Customs and Practice for Documentary Credits
(1993 Revision) International Chamber of Commerce Publication No. 500 (the
"UCP") and, in the event of any conflict between the law of the State of New
York and the UCP, the UCP shall control.
THE CHASE MANHATTAN BANK
By
---------------------------
Authorized Signatory
ANNEX 2
PLEDGED STOCK
-------------------------------- ----------------------- ------------------------------- ---------------------------------
Issuer Certificate Nos. Registered Owner Number of Shares
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
Flight Equipment and 26 BE Avionics, Inc. (now known 350,000 ordinary shares, 1 (British
Engineering Limited as BE Aerospace, Inc.) Pound) par value
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
BE Aerospace (Netherlands) B.V. 1-23 BE Aerospace, Inc. 23 shares of capital stock,
(uncertificated dfl. 1,000 par value
shares)
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
BE Aerospace (USA), Inc. 2 BE Aerospace, Inc. 65 shares of common stock, par
value $0.01
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
Acurex Inc. 2 BE Aerospace, Inc. 100 shares of common stock, par
value $0.01
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
B/E Services, Inc. 1 BE Aerospace, Inc. 1,000 shares of common stock,
par value $0.01
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
Aerospace Interiors, Inc. 1 BE Aerospace, Inc. 1,000 shares of common stock,
par value $0.01
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
Puritan-Xxxxxxx Aero Systems 43 BE Aerospace, Inc. 77,500 shares of common stock,
Co. par value $0.01
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
BE Intellectual Property, Inc. 1 BE Aerospace, Inc. 100 shares of common stock, par
value $0.01
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
Aerospace Lighting Corporation 49 BE Aerospace, Inc. 660 shares of common stock,
without par value
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
SMR Aerospace, Inc. 7 BE Aerospace, Inc. 300 shares of common stock, par
value $0.01
-------------------------------- ----------------------- ------------------------------- ---------------------------------
-------------------------------- ----------------------- ------------------------------- ---------------------------------
64 637,332.78 shares of common
Flight Structures, Inc. BE Aerospace, Inc. stock
-------------------------------- ----------------------- ------------------------------- ---------------------------------
EXHIBIT A-1
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated as of October
29, 1993, AMENDED AND RESTATED AS OF April 3, 1998, between BE AEROSPACE, INC.,
a corporation duly organized and validly existing under the laws of Delaware
(the "Company"); and THE CHASE MANHATTAN BANK, as agent for certain lenders or
other financial institutions or entities party, as lenders, to the Credit
Agreement referred to below (in such capacity, together with its successors in
such capacity, the "Administrative Agent").
The Company, certain lenders and the Administrative Agent are
parties to a Credit Agreement dated as of October 29, 1993 amended and restated
as of April 3, 1998 (as modified and supplemented and in effect from time to
time, the "Credit Agreement"), providing, subject to the terms and conditions
thereof, for extensions of credit (by making of loans and issuing letters of
credit) to be made by said lenders to the Company.
The Company and the Administrative Agent are party to a
Revolving Credit Security Agreement and a Term Loan Security Agreement, each
dated October 29, 1993.
To induce said lenders to enter into the Credit Agreement and
to extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company has agreed
to amend and restate the foresaid Revolving Credit Security Agreement and Term
Loan Security Agreement so that, as so amended and restated, they are combined
into one document and read in their entirety as herein provided. Accordingly,
the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit Agreement
are used herein as defined therein. In addition, as used herein:
"Accounts" shall have the meaning ascribed thereto in Section
3(d) hereof.
"Collateral" shall have the meaning ascribed thereto in
Section 3 hereof.
"Collateral Account" shall have the meaning ascribed thereto
in Section 4.01 hereof.
"Copyright Collateral" shall mean all Copyrights, whether now
owned or hereafter acquired by the Company, including each Copyright
identified in Annex 2 hereto.
"Copyrights" shall mean all copyrights, copyright
registrations and applications for copyright registrations, including,
without limitation, all renewals and extensions thereof, the right to
recover for all past, present and future infringements thereof, and all
other rights of any kind whatsoever accruing thereunder or pertaining
thereto.
"Documents" shall have the meaning ascribed thereto in Section
3(j) hereof.
"Equipment" shall have the meaning ascribed thereto in Section
3(h) hereof.
"Instruments" shall have the meaning ascribed thereto in
Section 3(e) hereof.
"Intellectual Property" shall mean all Copyright Collateral,
all Patent Collateral and all Trademark Collateral, together with (a)
all inventions, processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or other
agreements granted to the Company with respect to any of the foregoing,
in each case whether now or hereafter owned or used including, without
limitation, the licenses or other agreements with respect to the
Copyright Collateral, the Patent Collateral or the Trademark
Collateral, listed in Annex 5 hereto; (c) all information, customer
lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards,
processing standards, performance standards, catalogs, computer and
automatic machinery software and programs; (d) all field repair data,
sales data and other information relating to sales or service of
products now or hereafter manufactured; (e) all accounting information
and all media in which or on which any information or knowledge or data
or records may be recorded or stored and all computer programs used for
the compilation or printout of such information, knowledge, records or
data; (f) all licenses, consents, permits, variances, certifications
and approvals of governmental agencies now or hereafter held by the
Company; and (g) all causes of action, claims and warranties now or
hereafter owned or acquired by the Company in respect of any of the
items listed above.
"Inventory" shall have the meaning ascribed thereto in Section
3(f) hereof.
"Issuers" shall mean, collectively, (a) the respective
corporations identified on Annex 1 hereto under the caption "Issuer"
and (b) to the extent not otherwise identified on Annex 1 hereto, each
other Subsidiary of the Company.
"LLC Agreements" shall have the meaning ascribed thereto in
Section 3(m) hereof.
-2-
"LLC Collateral" shall have the meaning ascribed thereto in
Section 3(m) hereof.
"LLC Issuers" shall mean the respective limited liability
companies identified on Annex 7 hereto.
"Motor Vehicles" shall mean motor vehicles, tractors, trailers
and other like property, whether or not the title thereto is governed
by a certificate of title or ownership.
"Patent Collateral" shall mean all Patents, whether now owned
or hereafter acquired by the Company, including each Patent identified
in Annex 3 hereto.
"Patents" shall mean all patents and patent applications,
including, without limitation, the inventions and improvements
described and claimed therein together with the reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof,
all income, royalties, damages and payments now or hereafter due and/or
payable under and with respect thereto, including, without limitation,
damages and payments for past or future infringements thereof, the
right to xxx for past, present and future infringements thereof, and
all rights corresponding thereto throughout the world.
"Pledged Membership Interests" shall have the meaning ascribed
thereto in Section 3(m) hereof.
"Pledged Stock" shall have the meaning ascribed thereto in
Section 3(a) hereof.
"Secured Obligations" shall mean, collectively, (a) the
principal of and interest on the Loans made by the Lenders to, and the
Note(s) held by each Lender of, the Company and all other amounts from
time to time owing to the Lenders or the Administrative Agent by the
Company under the Basic Documents including, without limitation, all
Reimbursement Obligations and interest thereon and (b) all obligations
of the Company to the Lenders and the Administrative Agent hereunder.
"Stock Collateral" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 3 hereof and the
proceeds of and to any such property and, to the extent related to any
such property or such proceeds, all books, correspondence, credit
files, records, invoices and other papers.
"Trademark Collateral" shall mean all Trademarks, whether now
owned or hereafter acquired by the Company, including each Trademark
identified in Annex 4 hereto. Notwithstanding the foregoing, the
Trademark Collateral does not and shall not include any Trademark which
would be rendered invalid, abandoned, void or unenforceable by reason
of its being included as part of the Trademark Collateral.
"Trademarks" shall mean all trade names, trademarks and
service marks, logos, trademark and service xxxx registrations, and
applications for trademark and service
-3-
xxxx registrations, including, without limitation, all renewals of
trademark and service xxxx registrations, all rights corresponding
thereto throughout the world, the right to recover for all past,
present and future infringements thereof, all other rights of any kind
whatsoever accruing thereunder or pertaining thereto, together, in
each case, with the product lines and goodwill of the business
connected with the use of, and symbolized by, each such trade name,
trademark and service xxxx.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York.
Section 2. Representations and Warranties. The Company
represents and warrants to the Revolving Credit Lenders and the Agent that:
(a) The Company is the sole beneficial owner of the Collateral
and no Lien exists or will exist upon the Collateral at any time (and
no right or option to acquire the same exists in favor of any other
Person), except for Liens permitted under Section 8.06 of the Credit
Agreement and except for the pledge and security interest in favor of
the Agent for the benefit of the Lenders created or provided for
herein, which pledge and security interest constitute a first priority
perfected pledge and security interest in and to all of the Collateral
(other than Intellectual Property registered or otherwise located
outside of the United States of America).
(b) The Pledged Stock represented by the certificates
identified in Annex 1 hereto is, and all other Pledged Stock in which
the Company shall hereafter grant a security interest pursuant to
Section 3 hereof will be, duly authorized, validly existing, fully paid
and non-assessable and none of such Pledged Stock is or will be subject
to any contractual restriction, or any restriction under the charter or
by-laws of the respective Issuer, upon the transfer of such Pledged
Stock (except for any such restriction contained herein or in the
Credit Agreement).
(c) The Pledged Stock represented by the certificates
identified in Annex 1 hereto constitutes at least 65% of the issued and
outstanding shares of capital stock of any class of the Issuers
beneficially owned by the Company on the date hereof (whether or not
registered in the name of the Company) and said Annex 1 correctly
identifies, as at the date hereof, the respective Issuers of such
Pledged Stock, the respective class and par value of the shares
comprising such Pledged Stock and the respective number of shares (and
registered owners thereof) represented by each such certificate.
(d) Annex 2, 3 and 4 hereto set forth a complete and correct
list of all Copyrights, Patents and Trademarks owned by the Company on
the date hereof; except pursuant to licenses and other user agreements
entered into by the Company in the ordinary course of business, which
are listed in Annex 5 hereto, the Company owns and possesses the right
to use, and has done nothing to authorize or enable any other Person to
use, any
-4-
Copyright, Patent or Trademark listed in said Annex 2, 3 and 4, and
all registrations listed in said Annex 2, 3 and 4 are valid and in
full force and effect; except as may be set forth in said Annex 5, the
owns and possesses the right to use all Copyrights, Patents and
Trademarks.
(e) Annex 5 hereto sets forth a complete and correct list of
all licenses and other user agreements included in the Intellectual
Property on the date hereof.
(f) To the Company's knowledge, (i) except as set forth in
Annex 5 hereto, there is no violation by others of any right of the
Company with respect to any Copyright, Patent or Trademark listed in
Xxxxx 0, 0 xxx 0 xxxxxx xxx (xx) the Company is not infringing in any
respect upon any Copyright, Patent or Trademark of any other Person;
and no proceedings have been instituted or are pending against the
Company or, to the Company's knowledge, threatened, and no claim
against the Company has been received by the Company, alleging any such
violation, except as may be set forth in said Annex 5.
(g) The Company does not own any Trademarks registered in the
United States of America to which the last sentence of the definition
of Trademark Collateral applies.
(h) Any goods now or hereafter produced by the Company or any
of its Subsidiaries included in the Collateral have been and will be
produced in compliance with the requirements of the Fair Labor
Standards Act, as amended.
(i) the Pledged Membership Interests, and all other Pledged
Membership Interests in which the Company shall hereafter grant a
security interest pursuant to Section 3 hereof, will be duly
authorized, validly existing, fully paid and non-assessable and none of
such Pledged Membership Interests is or will be subject to any
contractual restriction, upon the transfer of such Pledged Membership
Interests (except for any such restriction contained herein).
(j) the Pledged Membership Interests constitute all of the
ownership interests in the LLC Issuers held by the Company on the date
hereof (whether or not registered in the name of the Company), and the
Company is the registered owner of all such ownership interests."
Section 3. Collateral. As collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Company hereby pledges and grants to
the Administrative Agent, for the benefit of the Lenders as hereinafter
provided, a security interest in all of the Company's right, title and interest
in the following property, whether now owned by the Company or hereafter
acquired and whether now existing or hereafter coming into existence (all being
collectively referred to herein as "Collateral"):
-5-
(a) the shares of capital stock of the Issuers represented by
the certificates identified in Annex 1 hereto and, subject to the
limitation set forth in Section 5.04(a)(1) hereof, all other shares of
capital stock of whatever class of the Issuers, now or hereafter owned
by the Company, in each case together with the certificates evidencing
the same (collectively, the "Pledged Stock");
(b) all shares, securities, moneys or property representing a
dividend on any of the Pledged Stock, or representing a distribution or
return of capital upon or in respect of the Pledged Stock, or resulting
from a split-up, revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or
otherwise in respect of, the Pledged Stock;
(c) without affecting the obligations of the Company under any
provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger in which the
Issuer is not the surviving corporation, all shares of each class of
the capital stock of the successor corporation formed by or resulting
from such consolidation or merger (the Pledged Stock, together with all
other certificates, shares, securities, properties or moneys as may
from time to time be pledged hereunder pursuant to clause (a) or (b)
above and this clause (c) being herein collectively called the "Stock
Collateral");
(d) all accounts and general intangibles (each as defined in
the Uniform Commercial Code) of the Company constituting any right to
the payment of money, including (but not limited to) all moneys due and
to become due to the Company in respect of any loans or advances or for
Inventory or Equipment or other goods sold or leased or for services
rendered, all moneys due and to become due to the Company under any
guarantee (not including a letter of credit) of the purchase price of
Inventory or Equipment sold by the Company and all tax refunds (such
accounts, general intangibles and moneys due and to become due being
herein called collectively "Accounts");
(e) all instruments, chattel paper or letters of credit (each
as defined in the Uniform Commercial Code) of the Company evidencing,
representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the Accounts,
including (but not limited to) promissory notes, drafts, bills of
exchange and trade acceptances (herein collectively called
"Instruments");
(f) all inventory (as defined in the Uniform Commercial Code)
of the Company, including Motor Vehicles held by the Company for lease
(including lease to Subsidiaries of the Company), fuel, tires and other
spare parts, all goods obtained by the Company in exchange for such
inventory, and any products made or processed from such inventory
including all substances, if any, commingled therewith or added thereto
(herein collectively called "Inventory");
-6-
(g) all Intellectual Property and all other accounts or
general intangibles of the Company not constituting Intellectual
Property or Accounts;
(h) all equipment (as defined in the Uniform Commercial Code)
of the Company, including all Motor Vehicles (herein collectively
called "Equipment");
(i) each contract and other agreement of the Company relating
to the sale or other disposition of Inventory or Equipment;
(j) all documents of title (as defined in the Uniform
Commercial Code) or other receipts of the Company covering, evidencing
or representing Inventory or Equipment (herein collectively called
"Documents");
(k) all rights, claims and benefits of the Company against any
Person arising out of, relating to or in connection with Inventory or
Equipment purchased by the Company, including, without limitation, any
such rights, claims or benefits against any Person storing or
transporting such Inventory or Equipment;
(l) the balance from time to time in the Collateral Account;
(m) the ownership interests of the Company in the LLC Issuers
identified in Annex 7 hereto, all certificates (if any) representing or
evidencing such ownership interests, and all right, title and interest
in, to and under the limited liability company agreements (the "LLC
Agreements") of such LLC Issuers (including without limitation all of
the right, title and interest (if any) as a member to participate in
the operation or management of the LLC Issuers and all of its ownership
interests under the LLC Agreements), and all present and future rights
of the Company to receive payment of money or other distribution of
payments arising out of or in connection with its ownership interests
and its rights under the LLC Agreements, now or hereafter owned by the
Company, in each case together with any certificates evidencing the
same (collectively, the "Pledged Membership Interests" and, together
with the Collateral pledged hereunder pursuant to clauses (n) through
(r) being herein collectively called the "LLC Collateral");
(n) any and all moneys, and any and all rights to receive such
moneys, due or to become due to the Company now or in the future by way
of a distribution made to the Company in its capacity as a member of
any of the LLC Issuers or otherwise pursuant to the LLC Agreements;
(o) any other property or assets, and any and all rights to
receive such property or assets, of any of the LLC Issuers to which the
Company now or in the future may be entitled in its capacity as a
member of such LLC Issuers;
-7-
(p) any other claim which the Company now has or may in the
future acquire in its capacity as a member of any of the LLC Issuers
against any such LLC Issuer and its property or arising out of or for
breach of or default under the LLC Agreements or otherwise relating to
the property of any of the LLC Issuers;
(q) all rights to terminate, amend, supplement, modify or
waive performance under the LLC Agreements, to perform thereunder and
to compel performance and to otherwise exercise all remedies
thereunder;
(r) all other tangible and intangible property of the Company,
including, without limitation, all proceeds, products, offspring,
accessions, rents, profits, income, benefits, substitutions and
replacements of and to any of the property of the Company described in
the preceding clauses of this Section 3 (including, without limitation,
any proceeds of insurance thereon) and, to the extent related to any
property described in said clauses or such proceeds, products and
accessions, all books, correspondence, credit files, records, invoices
and other papers, including without limitation all tapes, cards,
computer runs and other papers and documents in the possession or under
the control of the Company or any computer bureau or service company
from time to time acting for the Company.
Section 4. Cash Proceeds of Collateral.
4.01 Collateral Account. The Administrative Agent may
establish with Chase a cash collateral account (the "Collateral Account"), which
may be a "securities account" (within the meaning of Section 8-501 of the
Uniform Commercial Code), in the name and under the sole control of the
Administrative Agent into which there shall be deposited from time to time the
cash proceeds of any of the Collateral (including proceeds of insurance thereon)
required to be delivered to the Administrative Agent pursuant hereto and into
which the Company may from time to time deposit any additional amounts which it
wishes to pledge to the Administrative Agent for the benefit of the Lenders as
additional collateral security hereunder. The balance from time to time in the
Collateral Account shall constitute part of the Collateral hereunder and shall
not constitute payment of the Secured Obligations until applied as hereinafter
provided. Except as expressly provided in the next sentence, the Administrative
Agent shall remit the collected balance outstanding to the credit of the
Collateral Account to or upon the order of the Company as the Company shall from
time to time instruct; provided that the Net Available Proceeds from
Dispositions deposited in the Collateral Account (but not the investment
earnings thereof) shall remain in the Collateral Account until withdrawn as
permitted or required by Section 2.10(c) of the Credit Agreement. However, at
any time following the occurrence and during the continuance of an Event of
Default, the Administrative Agent may (and, if instructed by the Lenders as
specified in Section 10.03 of the Credit Agreement, shall) in its (or their)
discretion apply or cause to be applied (subject to collection) the balance from
time to time outstanding to the credit of the Collateral Account to the payment
of the Secured Obligations in the manner specified in Section 5.09 hereof. The
balance from time to time in the Collateral
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Account shall be subject to withdrawal only as provided herein and in Section
2.10(c) of the Credit Agreement.
4.02 Proceeds of Accounts. At any time after the occurrence
and during the continuance of an Event of Default, the Company shall, upon the
request of the Administrative Agent, instruct all account debtors and other
Persons obligated in respect of all Accounts to make all payments in respect of
the Accounts either (a) directly to the Administrative Agent (by instructing
that such payments be remitted to a post office box which shall be in the name
and under the control of the Administrative Agent) or (b) to one or more other
banks in the United States of America (by instructing that such payments be
remitted to a post office box which shall be in the name and under the control
of the Administrative Agent) under arrangements, in form and substance
satisfactory to the Administrative Agent pursuant to which the Company shall
have irrevocably instructed such other bank (and such other bank shall have
agreed) to remit all proceeds of such payments directly to the Administrative
Agent for deposit into the Collateral Account. All payments made to the
Administrative Agent, as provided in the preceding sentence, shall be
immediately deposited in the Collateral Account. In addition to the foregoing,
the Company agrees that, at any time after the occurrence and during the
continuance of an Event of Default, if the proceeds of any Collateral hereunder
(including the payments made in respect of Accounts) shall be received by it,
the Company shall as promptly as possible deposit such proceeds into the
Collateral Account. Until so deposited, all such proceeds shall be held in trust
by the Company for and as the property of the Administrative Agent and shall not
be commingled with any other funds or property of the Company.
4.03 Investment of Balance in Collateral Account. Amounts on
deposit in the Collateral Account shall be invested from time to time in such
Permitted Investments as the Company (or, after the occurrence and during the
continuance of a Default, the Administrative Agent) shall determine, which
Permitted Investments shall if the Collateral Account is a "securities account"
(within the meaning of Section 8-501 of the Uniform Commercial Code) be credited
to the Collateral Account and otherwise shall be held in the name and be under
the control of the Administrative Agent and may be credited to the Collateral
Account; provided that (i) at any time after the occurrence and during the
continuance of an Event of Default, the Administrative Agent may (and, if
instructed by the Lenders as specified in Section 10.03 of the Credit Agreement,
shall) in its (or their) discretion at any time and from time to time elect to
liquidate any such Permitted Investments and to apply or cause to be applied the
proceeds thereof to the payment of the Secured Obligations in the manner
specified in Section 5.09 hereof and (ii) if requested by the Company, such
Permitted Investments may be held in the name and under the control of one or
more of the Lenders (and in that connection each Lender, pursuant to Section
10.10 of the Credit Agreement, has agreed that such Permitted Investments shall
be held by such Lender as a collateral sub-Administrative Agent for the
Administrative Agent hereunder).
4.04 Cover for Letter of Credit Liabilities. Amounts deposited
into the Collateral Account as cover for Letter of Credit Liabilities under the
Credit Agreement pursuant to Section 2.10(f) or Section 9 thereof shall be held
by the Administrative Agent in a separate
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sub-account (designated "Letter of Credit Liabilities Sub-Account") and all
amounts held in such sub-account shall constitute collateral security first for
the Letter of Credit Liabilities outstanding from time to time and second as
collateral security for the other Secured Obligations hereunder.
Section 5. Further Assurances; Remedies. In furtherance of the
grant of the pledge and security interest pursuant to Section 3 hereof, the
Company hereby agrees with each Lender and the Administrative Agent as follows:
5.01 Delivery and Other Perfection. The Company shall:
(a) (i) with respect to any Pledged Membership Interests
acquired, received or hereafter held by the Company, take such action
as the Agent shall deem necessary or appropriate to perfect the pledge
and security interest granted by Section 3 of this Agreement in such
Pledged Membership Interests, including without limitation (a) to the
extent that they constitute Securities (as defined in Section
8-102(a)(15) of the Uniform Commercial Code) which are not represented
by a certificate, cause the LLC Issuer of such Pledged Membership
Interests to either register the Agent as the registered owner thereof
or agree that it will comply with Instructions (as defined in Section
8-102(a)(12) of the Uniform Commercial Code) originated by the Agent
with respect to such Pledged Membership Interests without further
consent by the Company and (b) to the extent that they constitute
Securities (as defined in Section 8-102(a)(15) of the Uniform
Commercial Code) which are represented by a certificate, deliver to the
Agent any such certificates representing the Pledged Membership
Interests and (ii) subject to Section 5.04(a)(1) hereof, if any of the
above-described shares, securities, moneys or property required to be
pledged by the Company under clauses (a), (b) and (c) of Section 3
hereof are received by the Company, forthwith either (x) transfer and
deliver to the Administrative Agent such shares or securities so
received by the Company (together with the certificates for any such
shares and securities duly endorsed in blank or accompanied by undated
stock powers duly executed in blank), all of which thereafter shall be
held by the Administrative Agent, pursuant to the terms of this
Agreement, as part of the Collateral or (y) take such other action as
the Administrative Agent shall deem necessary or appropriate to duly
record the Lien created hereunder in such shares, securities, moneys or
property in said clauses (a), (b) and (c);
(b) deliver and pledge to the Administrative Agent any and all
Instruments, endorsed and/or accompanied by such instruments of
assignment and transfer in such form and substance as the
Administrative Agent may request; provided, that so long as no Default
shall have occurred and be continuing, the Company may retain for
collection in the ordinary course any Instruments received by the
Company in the ordinary course of business and the Administrative Agent
shall, promptly upon request of the Company, make appropriate
arrangements for making any other Instrument pledged by the Company
available to the Company for purposes of presentation, collection or
renewal
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(any such arrangement to be effected, to the extent deemed appropriate
by the Administrative Agent, against trust receipt or like document);
(c) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable (in the judgment of the Administrative
Agent) to create, preserve, perfect or validate the security interest
granted pursuant hereto or to enable the Administrative Agent to
exercise and enforce its rights hereunder with respect to such pledge
and security interest, including, without limitation, causing any or
all of the Stock Collateral to be transferred of record into the name
of the Administrative Agent or its nominee (and the Administrative
Agent agrees that if any Stock Collateral is transferred into its name
or the name of its nominee, the Administrative Agent will thereafter
promptly give to the Company copies of any notices and communications
received by it with respect to the Stock Collateral), provided that
notices to account debtors in respect of any Accounts or Instruments
shall be subject to the provisions of clause (i) below;
(d) from time to time as requested by any Lender, cause the
Administrative Agent to be listed as the lienholder of any Equipment
covered by a certificate of title or ownership and within 120 days of
such request deliver evidence of the same to the Administrative Agent;
(e) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise xxxx such books and records in such
manner as the Administrative Agent may reasonably require in order to
reflect the security interests granted by this Agreement;
(f) furnish to the Administrative Agent from time to time
(but, unless a Default shall have occurred and be continuing, no more
frequently than quarterly) statements and schedules further identifying
and describing the Copyright Collateral, the Patent Collateral and the
Trademark Collateral and such other reports in connection with the
Copyright Collateral, the Patent Collateral and the Trademark
Collateral, as the Administrative Agent may reasonably request, all in
reasonable detail;
(g) promptly upon request of the Administrative Agent,
following receipt by the Administrative Agent of any statements,
schedules or reports pursuant to clause (f) above, modify this
Agreement by amending Annex 2, 3 and/or 4 hereto to include any
Copyright, Patent or Trademark which becomes part of the Collateral
under this Agreement;
(h) permit representatives of the Administrative Agent, upon
reasonable notice, at any time during normal business hours to inspect
and make abstracts from its books and records pertaining to the
Collateral, and permit representatives of the Administrative Agent to
be present at the Company's place of business to receive copies of all
communications and remittances relating to the Collateral, and forward
copies of any
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notices or communications received by the Company with respect to the
Collateral, all in such manner as the Administrative Agent may
require;
(i) upon the occurrence and during the continuance of any Event
of Default, upon request of the Administrative Agent, promptly notify
(and the Company hereby authorizes the Administrative Agent so to
notify) each account debtor in respect of any Accounts or Instruments
that such Collateral has been assigned to the Administrative Agent
hereunder, and that any payments due or to become due in respect of
such Collateral are to be made directly to the Administrative Agent.
5.02 Other Financing Statements and Liens. Except as otherwise
permitted under Section 8.06 of the Credit Agreement, without the prior written
consent of the Administrative Agent (granted with the authorization of the
Lenders as specified in Section 10.09 of the Credit Agreement), the Company
shall not file or suffer to be on file, or authorize or permit to be filed or to
be on file, in any jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Administrative Agent is not named as the
sole secured party for the benefit of the Lenders.
5.03 Preservation of Rights. The Administrative Agent shall
not be required to take steps necessary to preserve any rights against prior
parties to any of the Collateral.
5.04 Special Provisions Relating to Certain Collateral.
(a) Stock Collateral.
(1) The Company will cause the Stock Collateral to constitute
at all times 100% of the total number of shares of each class of capital stock
of each Issuer then outstanding; provided that if any such Issuer is organized
under the laws of jurisdiction other than the United States of America or a
State thereof, the Company need only cause the Stock Collateral of such Issuer
to constitute not less than 65% of the total number of shares of each class of
capital stock of such Issuer then outstanding.
(2) So long as no Event of Default shall have occurred and be
continuing, the Company shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the Stock Collateral for all
purposes not inconsistent with the terms of this Agreement, the Credit
Agreement, the Notes or any other instrument or agreement referred to herein or
therein, provided that the Company agrees that it will not vote the Stock
Collateral in any manner that is inconsistent with the terms of this Agreement,
the Credit Agreement, the Notes or any such other instrument or agreement; and
the Administrative Agent shall execute and deliver to the Company or cause to be
executed and delivered to the Company all such proxies, powers of attorney,
dividend and other orders, and all such instruments, without recourse, as the
Company may reasonably request for the purpose of enabling the Company to
exercise the rights and powers which it is entitled to exercise pursuant to this
Section 5.04(a)(2).
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(3) Unless and until an Event of Default has occurred and is
continuing, the Company shall be entitled to receive and retain any dividends on
the Stock Collateral paid in cash out of earned surplus.
(4) If any Event of Default shall have occurred, then so long
as such Event of Default shall continue, and whether or not the Administrative
Agent or any Lender exercises any available right to declare any Secured
Obligations due and payable or seeks or pursues any other relief or remedy
available to it under applicable law or under this Agreement, the Credit
Agreement, the Notes or any other agreement relating to such Secured
Obligations, all dividends and other distributions on the Stock Collateral shall
be paid directly to the Administrative Agent and retained by it in the
Collateral Account as part of the Stock Collateral, subject to the terms of this
Agreement, and, if the Administrative Agent shall so request in writing, the
Company agrees to execute and deliver to the Administrative Agent appropriate
additional dividend, distribution and other orders and documents to that end,
provided that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Administrative Agent shall, upon request of
the Company (except to the extent theretofore applied to the Secured
Obligations), be returned by the Administrative Agent to the Company.
(b) Intellectual Property.
(1) For the purpose of enabling the Administrative Agent to
exercise rights and remedies under Section 5.05 hereof at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, the Company hereby grants to the
Administrative Agent, to the extent assignable, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to the
Company) to use, assign, license or sublicense any of the Intellectual Property
now owned or hereafter acquired by the Company, wherever the same may be
located, including in such license reasonable access to all media in which any
of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof.
(2) Notwithstanding anything contained herein to the contrary,
but subject to the provisions of Section 8.05 of the Credit Agreement which
limit the right of the Company to dispose of its property, so long as no Event
of Default shall have occurred and be continuing, the Company will be permitted
to exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of
or take other actions with respect to the Intellectual Property in the ordinary
course of the business of the Company. In furtherance of the foregoing, unless
an Event of Default shall have occurred and be continuing the Administrative
Agent shall from time to time, upon the request of the Company, execute and
deliver any instruments, certificates or other documents, in the form so
requested, which the Company shall have certified are appropriate (in its
judgment) to allow it to take any action permitted above (including
relinquishment of the license provided pursuant to clause (1) immediately above
as to any specific Intellectual Property). Further, upon the payment in full of
all of the Secured Obligations and cancellation or termination of the
Commitments and Letter of Credit Liabilities or earlier expiration of this
Agreement or release of the Collateral, the Administrative Agent shall grant
back to the Company the license granted
-13-
pursuant to clause (1) immediately above. The exercise of rights and remedies
under Section 5.05 hereof by the Administrative Agent shall not terminate the
rights of the holders of any licenses or sublicenses theretofore granted by the
Company in accordance with the first sentence of this clause (2).
(c) LLC Collateral.
(1) The Company will cause the LLC Collateral to constitute at
all times 100% of the aggregate ownership and membership interests of each LLC
Issuer then outstanding.
(2) So long as no Event of Default shall have occurred and be
continuing, the Company shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the LLC Collateral for all purposes
not inconsistent with the terms of this Agreement, the Credit Agreement, the
Notes or any other instrument or agreement referred to herein or therein,
provided that the Company agrees that it will not vote the LLC Collateral in any
manner that is inconsistent with the terms of this Agreement, the Credit
Agreement, the Notes or any such other instrument or agreement; and the Agent
shall execute and deliver to the Company or cause to be executed and delivered
to the Company all such proxies, powers of attorney, dividend and other orders,
and all such instruments, without recourse, as the Company may reasonably
request for the purpose of enabling the Company to exercise the rights and
powers that they are entitled to exercise pursuant to this Section 5.04(c).
(3) Unless and until an Event of Default has occurred and is
continuing, the Company shall be entitled to receive and retain any
distributions and dividends payable in respect of the LLC Collateral.
(4) If any Event of Default shall have occurred, then so long
as such Event of Default shall continue, and whether or not the Agent or any
Lender exercises any available right to declare any Secured Obligations due and
payable or seeks or pursues any other relief or remedy available to it under
applicable law or under this Agreement, the Credit Agreement, the Notes or any
other agreement relating to such Secured Obligations, all distributions and
dividends on the LLC Collateral, whether consisting of cash, checks and other
near-cash items, shall be paid directly to the Agent and retained by it as part
of the Collateral, subject to the terms of this Agreement, and, if the Agent
shall so request in writing, the Company agrees to execute and deliver to the
Agent appropriate additional dividend, distribution and other orders and
documents to that end, and if the Company shall receive any such amounts, it
shall hold the same in trust for the Agent and deliver the same forthwith to the
Agent in the exact form received, duly indorsed by the Company to the Agent, if
required; provided that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Agent shall, upon request of the Company
(except to the extent theretofore applied to the Secured Obligations), be
returned by the Agent to the Company.
5.05 Events of Default, Etc. During the period during which an
Event of Default shall have occurred and be continuing:
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(a) the Company shall, at the request of the Administrative
Agent, assemble the Collateral owned by it at such place or places,
reasonably convenient to both the Administrative Agent and the Company,
designated in the Administrative Agent's request;
(b) the Administrative Agent may make any reasonable
compromise or settlement deemed desirable with respect to any of the
Collateral and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, any of the Collateral;
(c) the Administrative Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under the
Uniform Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral
as if the Administrative Agent were the sole and absolute owner thereof
(and the Company agrees to take all such action as may be appropriate
to give effect to such right);
(d) the Administrative Agent in its discretion may, in its
name or in the name of the Company or otherwise, demand, xxx for,
collect or receive any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral, but
shall be under no obligation to do so; and
(e) the Administrative Agent may, upon ten Business Days'
prior written notice to the Company of the time and place, with respect
to the Collateral or any part thereof which shall then be or shall
thereafter come into the possession, custody or control of the
Administrative Agent, the Lenders or any of their respective agents,
sell, lease, assign or otherwise dispose of all or any part of such
Collateral, at such place or places as the Administrative Agent deems
best, and for cash or for credit or for future delivery (without
thereby assuming any credit risk), at public or private sale, without
demand of performance or notice of intention to effect any such
disposition or of the time or place thereof (except such notice as is
required above or by applicable statute and cannot be waived), and the
Administrative Agent or any Lender or anyone else may be the purchaser,
lessee, assignee or recipient of any or all of the Collateral so
disposed of at any public sale (or, to the extent permitted by law, at
any private sale) and thereafter hold the same absolutely, free from
any claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of the Company, any such demand,
notice and right or equity being hereby expressly waived and released.
In the event of any sale, assignment, or other disposition of any of
the Trademark Collateral, the goodwill connected with and symbolized by
the Trademark Collateral subject to such disposition
-15-
shall be included, and the Company shall supply to the Administrative
Agent or its designee, for inclusion in such sale, assignment or other
disposition, all Intellectual Property relating to such Trademark
Collateral. The Administrative Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed
for the sale, and such sale may be made at any time or place to which
the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
5.05, including by virtue of the exercise of the license granted to the
Administrative Agent in Section 5.04(b) hereof, shall be applied in accordance
with Section 5.09 hereof.
The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Administrative Agent may be compelled, with respect to any
sale of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Company acknowledges that any such private sales may be at prices and on terms
less favorable to the Administrative Agent than those obtainable through a
public sale without such restrictions, and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Administrative Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the Administrative Agent
or issuer thereof to register it for public sale.
5.06 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 5.05 hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured Obligations, the Company shall remain liable for any
deficiency.
5.07 Removals, Etc. Without at least 30 days' prior written
notice to the Administrative Agent, the Company shall not (i) maintain any of
its books and records with respect to the Collateral at any office or maintain
its principal place of business at any place, or permit any Inventory or
Equipment to be located anywhere, other than at the address indicated beneath
the signature of the Company to the Credit Agreement or at one of the locations
identified in Part A of Annex 6 hereto or in transit from one of such locations
to another or (ii) change its name, or the name under which it does business,
from the name shown on the signature pages hereto; provided, however, that the
Company may do business in the states and under the names specified in Part B of
Annex 6 hereto.
5.08 Private Sale. The Administrative Agent and the Lenders
shall incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 5.05 hereof conducted in a
commercially reasonable manner. The Company hereby waives any claims against the
Administrative Agent or any Lender arising by reason of the fact that the price
at which the Collateral may have been sold at such a private sale was less than
the
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price which might have been obtained at a public sale or was less than the
aggregate amount of the Secured Obligations, even if the Administrative Agent
accepts the first offer received and does not offer the Collateral to more than
one offeree.
5.09 Application of Proceeds. Except as otherwise herein
expressly provided and except as provided below in this Section 5.09, the
proceeds of any collection, sale or other realization of all or any part of the
Collateral pursuant hereto, and any other cash at the time held by the
Administrative Agent under Section 4 hereof or this Section 5, shall be applied
by the Administrative Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Administrative Agent and the
reasonable fees and expenses of its agents and counsel, and all
reasonable expenses incurred and advances made by the Administrative
Agent in connection therewith;
Next, to the payment in full of the Secured Obligations, in
each case equally and ratably in accordance with the respective amounts
thereof then due and owing or as the Lenders holding the same may
otherwise agree; and
Finally, to the payment to the Company, or its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining.
Notwithstanding the foregoing, the proceeds of any cash or other amounts held in
the "Letter of Credit Liabilities Sub-Account" of the Collateral Account
pursuant to Section 4.04 hereof shall be applied first to the Letter of Credit
Liabilities outstanding from time to time and second to the other Secured
Obligations in the manner provided above in this Section 5.09.
As used in this Section 5, "proceeds" of Collateral shall mean cash, securities
and other property realized in respect of, and distributions in kind of,
Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of the Company or any issuer of or obligor on any of the
Collateral.
5.10 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Administrative Agent while no Event of Default
has occurred and is continuing, upon the occurrence and during the continuance
of any Event of Default the Administrative Agent is hereby appointed the
attorney-in-fact of the Company for the purpose of carrying out the provisions
of this Section 5 and taking any action and executing any instruments which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, so long as the
Administrative Agent shall be entitled under this Section 5 to make collections
in respect of the Collateral, the Administrative Agent shall have the right and
power to receive, endorse and collect all checks made payable to
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the order of the Company representing any dividend, payment or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.
5.11 Perfection. Prior to or concurrently with the execution
and delivery of this Agreement, the Company shall (i) file such financing
statements and other documents in such offices as the Administrative Agent may
request to perfect the security interests granted by Section 3 of this
Agreement, (ii) cause the Administrative Agent (to the extent requested by any
Lender) to be listed as the lienholder on all certificates of title or ownership
relating to Motor Vehicles owned by the Company, (iii) deliver to the
Administrative Agent all certificates identified in Annex 1 hereto, accompanied
by undated stock powers duly executed in blank and (iv) in the case of the
Pledged Membership Interests, take such action as the Agent shall deem necessary
or appropriate to perfect the pledge and security interest granted by Section 3
of this Agreement in such Pledged Membership Interests, including without
limitation (x) to the extent that they constitute Securities (as defined in
Section 8-102(a)(15) of the Uniform Commercial Code) which are not represented
by a certificate, cause the LLC Issuer of such Pledged Membership Interests to
either register the Agent as the registered owner thereof or agree that it will
comply with Instructions (as defined in Section 8-102(a)(12) of the Uniform
Commercial Code) originated by the Agent with respect to such Pledged Membership
Interests without further consent by the Company and (y) to the extent that they
constitute Securities (as defined in Section 8-102(a)(15) of the Uniform
Commercial Code) which are represented by a certificate, deliver to the Agent
any such certificates representing the Pledged Membership Interests.
5.12 Termination. When all Secured Obligations shall have been
paid in full and the Commitments of the Lenders under the Credit Agreement and
all Letter of Credit Liabilities shall have expired or been terminated, this
Agreement shall terminate, and the Administrative Agent shall forthwith cause to
be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and
money received in respect thereof, to or on the order of the Company and to be
released and canceled all licenses and rights referred to in Section 5.04(b)
hereof. The Administrative Agent shall also execute and deliver to the Company
upon such termination such Uniform Commercial Code termination statements,
certificates for terminating the Liens on the Motor Vehicles and such other
documentation as shall be reasonably requested by the Company to effect the
termination and release of the Liens on the Collateral.
5.13 Expenses. The Company agrees to pay to the Administrative
Agent all reasonable out-of-pocket expenses (including reasonable expenses for
legal services of every kind) of, or incident to, the enforcement of any of the
provisions of this Section 5, or performance by the Administrative Agent of any
obligations of the Company in respect of the Collateral which the Company has
failed or refused to perform, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or asserting rights
and claims of the Administrative Agent in respect thereof, by litigation or
otherwise, including expenses of
-18-
insurance, and all such expenses shall be Secured Obligations to the
Administrative Agent secured under Section 3 hereof.
5.14 Further Assurances. The Company agrees that, from time to
time upon the written request of the Administrative Agent, the Company will
execute and deliver such further documents and do such other acts and things as
the Administrative Agent may reasonably request in order fully to effect the
purposes of this Agreement.
5.15 Release of Motor Vehicles. So long as no Event of Default
shall have occurred and be continuing, upon the request of the Company, the
Administrative Agent shall execute and deliver to the Company such instruments
as the Company shall reasonably request to remove the notation of the
Administrative Agent as lienholder on any certificate of title for any Motor
Vehicle; provided that any such instruments shall be delivered, and the release
effective only upon receipt by the Administrative Agent of a certificate from
the Company stating that the Motor Vehicle the lien on which is to be released
is to be sold or has suffered a casualty loss (with title thereto passing to the
casualty insurance company therefor in settlement of the claim for such loss).
Section 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Administrative
Agent or any of its agents to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by the
Administrative Agent or any of its agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
6.02 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
6.03 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telexed, telecopied or delivered to the
intended recipient at its "Address for Notices" specified pursuant to Section
11.02 of the Credit Agreement and shall be deemed to have been given at the
times specified in said Section 11.02.
6.04 Waivers, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the Company
and the Administrative Agent (with the consent of the Lenders as specified in
Section 10.09 of the Credit Agreement). Any such amendment or waiver shall be
binding upon the Administrative Agent and each Lender, each holder of any of the
Secured Obligations and the Company.
-19-
6.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Administrative Agent, the Lenders and each holder of any of the
Secured Obligations (provided, however, that the Company shall not assign or
transfer its rights hereunder without the prior written consent of the
Administrative Agent).
6.06 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and either of the parties hereto may execute this Agreement by
signing any such counterpart.
6.07 Agents. The Administrative Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith.
6.08 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Administrative
Agent and the Lenders in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed and delivered as of the day and year
first above written.
BE AEROSPACE, INC.
By
--------------------------------
Title:
THE CHASE MANHATTAN BANK
as Administrative Agent
By
--------------------------------
Title:
-00-
XXXXX 0
XXXXXXX XXXXX
[See Section 2(b) and (c).]
------------------------------- ------------------- ------------------------ ------------------------------------
Certificate Nos.
Issuer Registered Owner Number of Shares
------------------------------- ------------------- ------------------------ ------------------------------------
------------------------------- ------------------- ------------------------ ------------------------------------
BE Avionics, Inc. (now
Flight Equipment and known as BE Aerospace, 325,000 ordinary shares ,(pound)1 par
Engineering Limited 26 Inc.) value
------------------------------- ------------------- ------------------------ ------------------------------------
------------------------------- ------------------- ------------------------ ------------------------------------
1-23
BE Aerospace (Netherlands) (uncertificated BE Aerospace, Inc. 23 shares of capital stock, dfl.
B.V. shares) 1,000 par value
------------------------------- ------------------- ------------------------ ------------------------------------
------------------------------- ------------------- ------------------------ ------------------------------------
BE Aerospace (USA), Inc. BE Aerospace, Inc. 65 shares of common stock, par
2 value $0.01
------------------------------- ------------------- ------------------------ ------------------------------------
------------------------------- ------------------- ------------------------ ------------------------------------
BE Aerospace, Inc. 100 shares of common stock, par
Acurex Inc. 2 value $0.01
------------------------------- ------------------- ------------------------ ------------------------------------
------------------------------- ------------------- ------------------------ ------------------------------------
BE Aerospace, Inc. 1,000 shares of common stock, par
B/E Services, Inc. 1 value $0.01
------------------------------- ------------------- ------------------------ ------------------------------------
ANNEX 2
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
[See Section 2(d).]
Title Date Filed Registration No. Effective Date
---------------------------------------------------------------
ANNEX 3
LIST OF PATENTS AND PATENT APPLICATIONS
[See Section 2(d).]
File Patent Country Registration No. Date
---------------------------------------------------------
ANNEX 4
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE XXXX REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE XXXX REGISTRATIONS
[See Section 2(d).]
U.S. Trademarks
---------------
Application (A)
Registration (R) Registration
Xxxx or Series No. (S) or Filing Date
Foreign Trademarks
------------------
Application (A) Registration or
Xxxx Registration (R) Country Filing Date (F)
ANNEX 5
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
[See Section 2(d), (e) and (f).]
ANNEX 6
LIST OF LOCATIONS AND TRADE NAMES
[See Section 5.07.]
Part A - List of Locations
Part B - Trade Names/State
ANNEX 7
PLEDGED MEMBERSHIP INTERESTS
=========================== -------------------------- ---------------------------- ===========================
Certificate Nos. Percentage of Ownership
LLC Issuer (if any) Registered Owner Interest
=========================== ========================== ============================ ===========================
In-Flight Entertainment,
LLC None BE Aerospace, Inc. 100%
=========================== ========================== ============================ ===========================
EXHIBIT A-2
AMENDED AND RESTATED GUARANTEE AND SECURITY AGREEMENT
AMENDED AND RESTATED GUARANTEE AND SECURITY AGREEMENT dated as
of November 19, 1997, amended and restated as of April 3, 1998, between
In-Flight Entertainment, LLC, a limited liability company duly organized and
validly existing under the laws of Delaware (the "Guarantor"); and THE CHASE
MANHATTAN BANK, as agent for the lenders or other financial institutions or
entities party, as lenders, to the Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the "Administrative
Agent").
BE Aerospace, Inc., a Delaware corporation (the "Company"),
certain lenders (the "Lenders") and the Administrative Agent are parties to a
Credit Agreement dated as of October 29, 1993, as amended and restated as of
April 3, 1998 (as modified and supplemented and in effect from time to time, the
"Credit Agreement"), providing, subject to the terms and conditions thereof, for
extensions of credit (by making of loans and issuing letters of credit) to be
made by said Lenders to the Company.
To induce the Lenders to enter into the Credit Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Guarantor has agreed to guarantee the Guaranteed
Obligations (as hereinafter defined), and to pledge and grant a security
interest in the Collateral (as so defined) as security for the Secured
Obligations (as so defined). Accordingly, the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit Agreement
(as amended by Amendment No. 1) are used herein as defined therein. In addition,
as used herein:
"Accounts" shall have the meaning ascribed thereto in Section
4(a) hereof.
"Collateral" shall have the meaning ascribed thereto in
Section 4 hereof.
"Collateral Account" shall have the meaning ascribed thereto
in Section 5.01 hereof.
"Copyright Collateral" shall mean all Copyrights, whether now
owned or hereafter acquired by the Guarantor, including each Copyright
identified in Annex 1 hereto.
"Copyrights" shall mean all copyrights, copyright
registrations and applications for copyright registrations, including,
without limitation, all renewals and extensions
thereof, the right to recover for all past, present and future
infringements thereof, and all other rights of any kind whatsoever
accruing thereunder or pertaining thereto.
"Documents" shall have the meaning ascribed thereto in Section
4(g) hereof.
"Equipment" shall have the meaning ascribed thereto in Section
4(e) hereof.
"Guaranteed Obligations" shall have the meaning ascribed
thereto in Section 2.01 hereof.
"Instruments" shall have the meaning ascribed thereto in
Section 4(b) hereof.
"Intellectual Property" shall mean, collectively, all
Copyright Collateral, all Patent Collateral and all Trademark
Collateral, together with (a) all inventions, processes, production
methods, proprietary information, know-how and trade secrets; (b) all
licenses or user or other agreements granted to the Guarantor with
respect to any of the foregoing, in each case whether now or hereafter
owned or used including, without limitation, the licenses or other
agreements with respect to the Copyright Collateral, the Patent
Collateral or the Trademark Collateral, listed in Annex 4 hereto; (c)
all information, customer lists, identification of suppliers, data,
plans, blueprints, specifications, designs, drawings, recorded
knowledge, surveys, engineering reports, test reports, manuals,
materials standards, processing standards, performance standards,
catalogs, computer and automatic machinery software and programs; (d)
all field repair data, sales data and other information relating to
sales or service of products now or hereafter manufactured; (e) all
accounting information and all media in which or on which any
information or knowledge or data or records may be recorded or stored
and all computer programs used for the compilation or printout of such
information, knowledge, records or data; (f) all licenses, consents,
permits, variances, certifications and approvals of governmental
agencies now or hereafter held by the Guarantor; and (g) all causes of
action, claims and warranties now or hereafter owned or acquired by the
Guarantor in respect of any of the items listed above.
"Inventory" shall have the meaning ascribed thereto in Section
4(c) hereof.
"LiveTV LLC" shall mean B/E Xxxxxx LiveTV LLC, a Delaware
limited liability company.
"LiveTV LLC Agreement" shall mean the Limited Liability
Company Agreement of B/E Xxxxxx LiveTV LLC.
"Motor Vehicles" shall mean motor vehicles, tractors, trailers
and other like property, whether or not the title thereto is governed
by a certificate of title or ownership.
-2-
"Patent Collateral" shall mean all Patents, whether now owned
or hereafter acquired by the Guarantor, including each Patent
identified in Annex 2 hereto.
"Patents" shall mean all patents and patent applications,
including, without limitation, the inventions and improvements
described and claimed therein together with the reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof,
all income, royalties, damages and payments now or hereafter due and/or
payable under and with respect thereto, including, without limitation,
damages and payments for past or future infringements thereof, the
right to xxx for past, present and future infringements thereof, and
all rights corresponding thereto throughout the world.
"Secured Obligations" shall mean, collectively, (a) all
obligations of the Guarantor in respect of its Guarantee under Section
2 hereof and (b) all other obligations of the Guarantor to the Lenders
and the Administrative Agent hereunder.
"Trademark Collateral" shall mean all Trademarks, whether now
owned or hereafter acquired by the Guarantor, including each Trademark
identified in Annex 3 hereto. Notwithstanding the foregoing, the
Trademark Collateral does not and shall not include any Trademark that
would be rendered invalid, abandoned, void or unenforceable by reason
of its being included as part of the Trademark Collateral.
"Trademarks" shall mean all trade names, trademarks and
service marks, logos, trademark and service xxxx registrations, and
applications for trademark and service xxxx registrations, including,
without limitation, all renewals of trademark and service xxxx
registrations, all rights corresponding thereto throughout the world,
the right to recover for all past, present and future infringements
thereof, all other rights of any kind whatsoever accruing thereunder or
pertaining thereto, together, in each case, with the product lines and
goodwill of the business connected with the use of, and symbolized by,
each such trade name, trademark and service xxxx.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York.
Section 2. The Guarantee.
2.01 The Guarantee. The Guarantor hereby guarantees to each
Lender and the Administrative Agent and their respective successors and assigns
the prompt payment in full when due (whether at stated maturity, by acceleration
or otherwise) of the principal of and interest on the Loans made by the Lenders
to, and the Note(s) held by each Lender of, the Company and all other amounts
from time to time owing to the Lenders or the Administrative Agent by the
Company under the Credit Agreement and under the Basic Documents and all
Reimbursement Obligations and interest thereon, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations").
-3-
The Guarantor hereby further agrees that if the Company shall fail to pay in
full when due (whether at stated maturity, by acceleration or otherwise) any of
the Guaranteed Obligations, the Guarantor will promptly pay the same, without
any demand or notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
2.02 Obligations Unconditional. The obligations of the
Guarantor under Section 2.01 hereof are absolute and unconditional irrespective
of the value, genuineness, validity, regularity or enforceability of the Credit
Agreement, the Basic Documents or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 2.02 that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of the Guarantor
hereunder which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Guarantor, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of the
Credit Agreement or the Basic Documents or any other agreement or
instrument referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under the Credit
Agreement or the Basic Documents or any other agreement or instrument
referred to herein or therein shall be waived or any other guarantee of
any of the Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent or any Lender or Lenders as security for any
of the Guaranteed Obligations shall fail to be perfected.
The Guarantor hereby expressly waives diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against the
Company under the Credit Agreement or the Basic Documents or any other agreement
or instrument referred to herein or therein, or against
-4-
any other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations.
2.03 Reinstatement. The obligations of the Guarantor under
this Section 2 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of the Company in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Guarantor agrees that it will
indemnify the Administrative Agent and each Lender on demand for all reasonable
costs and expenses (including, without limitation, fees of counsel) incurred by
the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
2.04 Subrogation. The Guarantor hereby agrees that until the
payment and satisfaction in full of all Guaranteed Obligations and the
expiration or termination of the Commitments and all Letter of Credit
Liabilities of the Lenders under the Credit Agreement it shall not exercise any
right or remedy arising by reason of any performance by it of its guarantee in
Section 2.01 hereof, whether by subrogation or otherwise, against the Company or
any other guarantor of any of the Guaranteed Obligations or any security for any
of the Guaranteed Obligations.
2.05 Remedies. The Guarantor agrees that, as between the
Guarantor and the Lenders, the obligations of the Company under the Credit
Agreement and the Basic Documents may be declared to be forthwith due and
payable as provided in Section 9 of the Credit Agreement (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 9) for purposes of Section 2.01 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations
from becoming automatically due and payable) as against the Company and that, in
the event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by the Company) shall forthwith become due and payable by the Guarantor for
purposes of said Section 2.01.
2.06 Instrument for the Payment of Money. The Guarantor hereby
acknowledges that the guarantee in this Section 2 constitutes an instrument for
the payment of money, and consents and agrees that any Lender or the
Administrative Agent, at its sole option, in the event of a dispute by the
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
2.07 Continuing Guarantee. The guarantee in this Section 2 is
a continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
-5-
2.08 General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of the Guarantor under Section 2.01
hereof would otherwise be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under said Section 2.01, then, notwithstanding
any other provision hereof to the contrary, the amount of such liability shall,
without any further action by the Guarantor, the Administrative Agent, the
Lenders or any other Person, be automatically limited and reduced to the highest
amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
Section 3. Representations and Warranties. The Guarantor
represents and warrants to the Lenders and the Administrative Agent that:
3.01 Action. The Guarantor has all necessary power and
authority to execute, deliver and perform its obligations under this Agreement;
the execution, delivery and performance by the Guarantor of this Agreement have
been duly authorized by all necessary action on its part; and this Agreement has
been duly and validly executed and delivered by the Guarantor and constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights and the application of general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3.02 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency, or any securities exchange are necessary for the execution, delivery
or performance by the Guarantor of this Agreement or for the validity or
enforceability hereof, except for filings and recordings of the Liens created
pursuant to this Agreement.
3.03 Collateral.
(a) When the Guarantor acquires any rights therein, the
Guarantor will be the sole beneficial owner of the Collateral and no
Lien will exist upon the Collateral at any time (and no right or option
to acquire the same will exist in favor of any other Person), except
for Liens permitted under Section 8.06 of the Credit Agreement and
except for the pledge and security interest in favor of the
Administrative Agent for the benefit of the Lenders created or provided
for herein, which pledge and security interest constitute a first
priority perfected pledge and security interest in and to all of the
Collateral (other than Intellectual Property registered or otherwise
located outside of the United States of America).
-6-
(b) Annexes 1, 2 and 3 hereto, respectively, set forth a
complete and correct list of all Copyrights, Patents and Trademarks
owned by the Guarantor on the date hereof; except pursuant to licenses
and other user agreements entered into by the Guarantor in the ordinary
course of business, that are listed in Annex 4 hereto, the Guarantor
owns and possesses the right to use, and has done nothing to authorize
or enable any other Person to use, any Copyright, Patent or Trademark
listed in said Annexes 1, 2 and 3, and all registrations listed in said
Annexes 1, 2 and 3 are valid and in full force and effect; except as
may be set forth in said Annex 4, the Guarantor owns and possesses the
right to use all Copyrights, Patents and Trademarks.
(c) Annex 4 hereto sets forth a complete and correct list of
all licenses and other user agreements included in the Intellectual
Property on the date hereof.
(d) To the Guarantor's knowledge, (i) except as set forth in
Annex 4 hereto, there is no violation by others of any right of the
Guarantor with respect to any Copyright, Patent or Trademark listed in
Annexes 1, 2 and 3 hereto, respectively, and (ii) the Guarantor is not
infringing in any respect upon any Copyright, Patent or Trademark of
any other Person; and no proceedings have been instituted or are
pending against the Guarantor or, to the Guarantor's knowledge,
threatened, and no claim against the Guarantor has been received by the
Guarantor, alleging any such violation, except as may be set forth in
said Annex 4.
(e) The Guarantor does not own any Trademarks registered in
the United States of America to which the last sentence of the
definition of Trademark Collateral applies.
(f) Any goods now or hereafter produced by the Guarantor
included in the Collateral have been and will be produced in compliance
with the requirements of the Fair Labor Standards Act, as amended.
Section 4. Collateral. As collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Guarantor hereby pledges and grants
to the Administrative Agent, for the benefit of the Lenders as hereinafter
provided, a security interest in all of the Guarantor's right, title and
interest in the following property, whether now owned by the Guarantor or
hereafter acquired and whether now existing or hereafter coming into existence
(all being collectively referred to herein as "Collateral"):
(a) all accounts and general intangibles (each as defined in
the Uniform Commercial Code) of the Guarantor constituting any right to
the payment of money, including (but not limited to) all moneys due and
to become due to the Guarantor in respect of any loans or advances or
for Inventory or Equipment or other goods sold or leased or for
services rendered, all moneys due and to become due to the Guarantor
under any guarantee (not including a letter of credit) of the purchase
price of Inventory or
-7-
Equipment sold by the Guarantor and all tax refunds (such accounts,
general intangibles and moneys due and to become due being herein
called collectively "Accounts");
(b) all instruments, chattel paper or letters of credit (each
as defined in the Uniform Commercial Code) of the Guarantor evidencing,
representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the Accounts,
including (but not limited to) promissory notes, drafts, bills of
exchange and trade acceptances (herein collectively called
"Instruments");
(c) all inventory (as defined in the Uniform Commercial Code)
of the Guarantor, including Motor Vehicles held by the Guarantor for
lease (including lease to Subsidiaries of the Guarantor), fuel, tires
and other spare parts, all goods obtained by the Guarantor in exchange
for such inventory, and any products made or processed from such
inventory including all substances, if any, commingled therewith or
added thereto (herein collectively called "Inventory");
(d) all Intellectual Property and all other accounts or
general intangibles not constituting Intellectual Property or Accounts;
(e) all equipment (as defined in the Uniform Commercial Code)
of the Guarantor, including all Motor Vehicles (herein collectively
called "Equipment");
(f) each contract and other agreement of the Guarantor
relating to the sale or other disposition of Inventory or Equipment;
(g) all documents of title (as defined in the Uniform
Commercial Code) or other receipts of the Guarantor covering,
evidencing or representing Inventory or Equipment (herein collectively
called "Documents");
(h) all rights, claims and benefits of the Guarantor against
any Person arising out of, relating to or in connection with Inventory
or Equipment purchased by the Guarantor, including, without limitation,
any such rights, claims or benefits against any Person storing or
transporting such Inventory or Equipment;
(i) the balance from time to time in the Collateral Account;
and
(j) all other tangible and intangible personal property of the
Guarantor, including, without limitation, all proceeds, products,
offspring, accessions, rents, profits, income, benefits, substitutions
and replacements of and to any of the property of the Guarantor
described in the preceding clauses of this Section 4 (including,
without limitation, any proceeds of insurance thereon) and, to the
extent related to any property described in said clauses or such
proceeds, products and accessions, all books, correspondence, credit
files, records, invoices and other papers, including without limitation
all tapes, cards, computer runs and other papers and documents in the
possession or under the control of the
-8-
Guarantor or any computer bureau or service company from time to time
acting for the Guarantor.
Notwithstanding the foregoing, the Collateral does not and shall not
include:
(i) any ownership interest in, or right, title or interest of
the Guarantor as a member in LiveTV LLC, but shall include (w) any and
all moneys, and any and all rights to receive such moneys, due or to
become due to the Guarantor now or in the future by way of distribution
made to the Guarantor in its capacity as a member of LiveTV LLC or
otherwise pursuant to the LiveTV LLC Agreement, (x) any other property
or assets, and any and all rights to receive such property or assets,
of LiveTV LLC to which the Guarantor now or in the future may be
entitled in its capacity as a member of LiveTV LLC, (y) any other claim
which the Guarantor now has or may acquire in its capacity as a member
of LiveTV LLC against LiveTV LLC and its property or arising out of or
for breach or default under the LiveTV Limited Liability Agreement and
(z) all proceeds of and to any of the foregoing clauses (w) through
(y); and
(ii) the assets to be transferred to LiveTV LLC, including,
without limitation, rights and claims of the Company against In-Flight
Phone Corporation transferred to the Guarantor, whether asserted or
unasserted with respect to matters prior to the formation of LiveTV LLC
and the rights to certain technology, trademarks and trade names
licensed to the Guarantor by the Company and to be licensed by the
Guarantor to LiveTV LLC.
Section 5. Cash Proceeds of Collateral.
5.01 Collateral Account. The Administrative Agent may
establish with Chase a cash collateral account (the "Collateral Account"), which
may be a "securities account" (within the meaning of Section 8-501 of the
Uniform Commercial Code), in the name and under the sole control of the
Administrative Agent into which there shall be deposited from time to time the
cash proceeds of any of the Collateral (including proceeds of insurance thereon)
required to be delivered to the Administrative Agent pursuant hereto and into
which the Guarantor may from time to time deposit any additional amounts that it
wishes to pledge to the Administrative Agent for the benefit of the Lenders as
additional collateral security hereunder. The balance from time to time in the
Collateral Account shall constitute part of the Collateral hereunder and shall
not constitute payment of the Secured Obligations until applied as hereinafter
provided. Except as expressly provided in the next sentence, the Administrative
Agent shall remit the collected balance outstanding to the credit of the
Collateral Account to or upon the order of the Guarantor as the Guarantor shall
from time to time instruct. However, at any time following the occurrence and
during the continuance of an Event of Default, the Administrative Agent may
(and, if instructed by the Lenders as specified in Section 10.03 of the Credit
Agreement, shall) in its (or their) discretion apply or cause to be applied
(subject to collection) the balance from time to time outstanding to the credit
of the Collateral Account to the payment of the Secured Obligations in
-9-
the manner specified in Section 6.09 hereof. The balance from time to time in
the Collateral Account shall be subject to withdrawal only as provided herein.
5.02 Proceeds of Accounts. At any time after the occurrence
and during the continuance of an Event of Default, the Guarantor shall, upon the
request of the Administrative Agent, instruct all account debtors and other
Persons obligated in respect of all Accounts to make all payments in respect of
the Accounts either (a) directly to the Administrative Agent (by instructing
that such payments be remitted to a post office box which shall be in the name
and under the control of the Administrative Agent) or (b) to one or more other
banks in the United States of America (by instructing that such payments be
remitted to a post office box which shall be in the name and under the control
of the Administrative Agent) under arrangements, in form and substance
satisfactory to the Administrative Agent pursuant to which the Guarantor shall
have irrevocably instructed such other bank (and such other bank shall have
agreed) to remit all proceeds of such payments directly to the Administrative
Agent for deposit into the Collateral Account. All payments made to the
Administrative Agent, as provided in the preceding sentence, shall be
immediately deposited in the Collateral Account. In addition to the foregoing,
the Guarantor agrees that, at any time after the occurrence and during the
continuance of an Event of Default, if the proceeds of any Collateral hereunder
(including the payments made in respect of Accounts) shall be received by it,
the Guarantor shall as promptly as possible deposit such proceeds into the
Collateral Account. Until so deposited, all such proceeds shall be held in trust
by the Guarantor for and as the property of the Administrative Agent and shall
not be commingled with any other funds or property of the Guarantor.
5.03 Investment of Balance in Collateral Account. Amounts on
deposit in the Collateral Account shall be invested from time to time in such
Permitted Investments as the Guarantor (or, after the occurrence and during the
continuance of a Default, the Administrative Agent) shall determine, which
Permitted Investments shall if the Collateral Account is a "securities account"
(within the meaning of Section 8-501 of the Uniform Commercial Code) be credited
to the Collateral Account and otherwise shall be held in the name and be under
the control of the Administrative Agent, provided that (i) at any time after the
occurrence and during the continuance of an Event of Default, the Administrative
Agent may (and, if instructed by the Lenders as specified in Section 10.03 of
the Credit Agreement, shall) in its (or their) discretion at any time and from
time to time elect to liquidate any such Permitted Investments and to apply or
cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 6.09 hereof and (ii) if requested
by the Guarantor, such Permitted Investments may be held in the name and under
the control of one or more of the Lenders (and in that connection each Lender,
pursuant to Section 10.10 of the Credit Agreement) has agreed that such
Permitted Investments shall be held by such Lender as a collateral sub-agent for
the Administrative Agent hereunder).
5.04 Cover for Letter of Credit Liabilities. Amounts deposited
into the Collateral Account as cover for Letter of Credit Liabilities under the
Credit Agreement pursuant to Section 2.10(f) or Section 9 thereof shall be held
by the Administrative Agent in a separate sub-account (designated "Letter of
Credit Liabilities Sub-Account") and all amounts held in such
-10-
sub-account shall constitute collateral security first for the Letter of Credit
Liabilities outstanding from time to time and second as collateral security for
the other Secured Obligations hereunder.
Section 6. Further Assurances; Remedies. In furtherance of the
grant of the pledge and security interest pursuant to Section 4 hereof, the
Guarantor hereby agrees with each Lender and the Administrative Agent as
follows:
6.01 Delivery and Other Perfection. The Guarantor shall:
(a) deliver and pledge to the Administrative Agent any and all
Instruments, endorsed and/or accompanied by such instruments of
assignment and transfer in such form and substance as the
Administrative Agent may request; provided, that so long as no Default
shall have occurred and be continuing, the Guarantor may retain for
collection in the ordinary course any Instruments received by the
Guarantor in the ordinary course of business and the Administrative
Agent shall, promptly upon request of the Guarantor, make appropriate
arrangements for making any Instrument pledged by the Guarantor
available to the Guarantor for purposes of presentation, collection or
renewal (any such arrangement to be effected, to the extent deemed
appropriate by the Administrative Agent, against trust receipt or like
document);
(b) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable (in the judgment of the Administrative
Agent) to create, preserve, perfect or validate the security interest
granted pursuant hereto or to enable the Administrative Agent to
exercise and enforce its rights hereunder with respect to such pledge
and security interest, provided that notices to account debtors in
respect of any Accounts or Instruments shall be subject to the
provisions of clause (h) below;
(c) from time to time as requested by any Lender, cause the
Administrative Agent to be listed as Lienholder of any Equipment
covered by a certificate of title or ownership, and within 120 days of
such request deliver evidence of the same to the Administrative Agent;
(d) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise xxxx such books and records in such
manner as the Administrative Agent may reasonably require in order to
reflect the security interests granted by this Agreement;
(e) furnish to the Administrative Agent from time to time
(but, unless a Default shall have occurred and be continuing, no more
frequently than quarterly) statements and schedules further identifying
and describing the Copyright Collateral, the Patent Collateral and the
Trademark Collateral, and such other reports in connection with the
-11-
Copyright Collateral, the Patent Collateral and the Trademark
Collateral, as the Administrative Agent may reasonably request, all in
reasonable detail;
(f) promptly upon request of the Administrative Agent,
following receipt by the Administrative Agent of any statements,
schedules or reports pursuant to clause (e) above, modify this
Agreement by amending Annexes 1, 2 and/or 3 hereto, as the case may be,
to include any Copyright, Patent or Trademark which becomes part of the
Collateral under this Agreement;
(g) permit representatives of the Administrative Agent, upon
reasonable notice, at any time during normal business hours to inspect
and make abstracts from its books and records pertaining to the
Collateral, and permit representatives of the Administrative Agent to
be present at the Guarantor's place of business to receive copies of
all communications and remittances relating to the Collateral, and
forward copies of any notices or communications received by the
Guarantor with respect to the Collateral, all in such manner as the
Administrative Agent may require; and
(h) upon the occurrence and during the continuance of any
Event of Default, upon request of the Administrative Agent, promptly
notify (and the Guarantor hereby authorizes the Administrative Agent so
to notify) each account debtor in respect of any Accounts or
Instruments that such Collateral has been assigned to the
Administrative Agent hereunder, and that any payments due or to become
due in respect of such Collateral are to be made directly to the
Administrative Agent.
6.02 Other Financing Statements and Liens. Except as otherwise
permitted under Section 8.06 of the Credit Agreement, without the prior written
consent of the Administrative Agent (granted with the authorization of the
Lenders as specified in Section 10.09 of the Credit Agreement), the Guarantor
shall not file or suffer to be on file, or authorize or permit to be filed or to
be on file, in any jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Administrative Agent is not named as the
sole secured party for the benefit of the Lenders.
6.03 Preservation of Rights. The Administrative Agent shall
not be required to take steps necessary to preserve any rights against prior
parties to any of the Collateral.
6.04 Special Provisions Relating to Certain Collateral.
(a) Intellectual Property.
(1) For the purpose of enabling the Administrative Agent to
exercise rights and remedies under Section 6.05 hereof at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, the Guarantor hereby grants to the
Administrative Agent, to the extent assignable, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to the
Guarantor) to use,
-12-
assign, license or sublicense any of the Intellectual Property now owned or
hereafter acquired by the Guarantor, wherever the same may be located, including
in such license reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the
compilation or printout thereof.
(2) Notwithstanding anything contained herein to the contrary,
but subject to the provisions of Section 8.05 of the Credit Agreement which
limit the right of the Company and its Subsidiaries to dispose of their
property, so long as no Event of Default shall have occurred and be continuing,
the Guarantor will be permitted to exploit, use, enjoy, protect, license,
sublicense, assign, sell, dispose of or take other actions with respect to the
Intellectual Property in the ordinary course of the business of the Guarantor.
In furtherance of the foregoing, unless an Event of Default shall have occurred
and be continuing the Administrative Agent shall from time to time, upon the
request of the Guarantor, execute and deliver any instruments, certificates or
other documents, in the form so requested, that the Guarantor shall have
certified are appropriate (in its judgment) to allow it to take any action
permitted above (including relinquishment of the license provided pursuant to
clause (1) immediately above as to any specific Intellectual Property). Further,
upon the payment in full of all of the Secured Obligations and cancellation or
termination of the Commitments and Letter of Credit Liabilities or earlier
expiration of this Agreement or release of the Collateral, the Administrative
Agent shall grant back to the Guarantor the license granted pursuant to clause
(1) immediately above. The exercise of rights and remedies under Section 6.05
hereof by the Administrative Agent shall not terminate the rights of the holders
of any licenses or sublicenses theretofore granted by the Guarantor in
accordance with the first sentence of this clause (2).
6.05 Events of Default, Etc. During the period during which an
Event of Default shall have occurred and be continuing:
(a) the Guarantor shall, at the request of the Administrative
Agent, assemble the Collateral owned by it at such place or places,
reasonably convenient to both the Administrative Agent and the
Guarantor, designated in its request;
(b) the Administrative Agent may make any reasonable
compromise or settlement deemed desirable with respect to any of the
Collateral and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, any of the Collateral;
(c) the Administrative Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under the
Uniform Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral
as if the Administrative Agent were the sole and absolute owner thereof
(and
-13-
the Guarantor agrees to take all such action as may be appropriate to
give effect to such right);
(d) the Administrative Agent in its discretion may, in its
name or in the name of the Guarantor or otherwise, demand, xxx for,
collect or receive any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral, but
shall be under no obligation to do so; and
(e) the Administrative Agent may, upon ten Business Days prior
written notice to the Guarantor of the time and place, with respect to
the Collateral or any part thereof that shall then be or shall
thereafter come into the possession, custody or control of the
Administrative Agent, the Lenders or any of their respective agents,
sell, lease, assign or otherwise dispose of all or any part of such
Collateral, at such place or places as the Administrative Agent deems
best, and for cash or for credit or for future delivery (without
thereby assuming any credit risk), at public or private sale, without
demand of performance or notice of intention to effect any such
disposition or of the time or place thereof (except such notice as is
required above or by applicable statute and cannot be waived), and the
Administrative Agent or any Lender or anyone else may be the purchaser,
lessee, assignee or recipient of any or all of the Collateral so
disposed of at any public sale (or, to the extent permitted by law, at
any private sale) and thereafter hold the same absolutely, free from
any claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of the Guarantor, any such demand,
notice and right or equity being hereby expressly waived and released.
In the event of any sale, assignment, or other disposition of any of
the Trademark Collateral, the goodwill connected with and symbolized by
the Trademark Collateral subject to such disposition shall be included,
and the Guarantor shall supply to the Administrative Agent or its
designee, for inclusion in such sale, assignment or other disposition,
all Intellectual Property relating to such Trademark Collateral. The
Administrative Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for the sale, and such
sale may be made at any time or place to which the sale may be so
adjourned.
The proceeds of each collection, sale or other disposition under this Section
6.05, including by virtue of the exercise of the license granted to the
Administrative Agent in Section 6.04(b) hereof, shall be applied in accordance
with Section 6.09 hereof.
The Guarantor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and applicable
state securities laws, the Administrative Agent may be compelled, with respect
to any sale of all or any part of the Collateral, to limit purchasers to those
who will agree, among other things, to acquire the Collateral for their own
account, for investment and not with a view to the distribution or resale
thereof. The Guarantor acknowledges that any such private sales may be at prices
and on terms less favorable to the Administrative Agent than those obtainable
through a public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have
-14-
been made in a commercially reasonable manner and that the Administrative Agent
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Collateral for the period of time necessary to permit the
respective Issuer or issuer thereof to register it for public sale.
6.06 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 6.05 hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured Obligations, the Guarantor shall remain liable for any
deficiency.
6.07 Removals, Etc. Without at least 30 days prior written
notice to the Administrative Agent, the Guarantor shall not (i) maintain any of
its books and records with respect to the Collateral at any office or maintain
its principal place of business at any place, or permit any Inventory or
Equipment to be located anywhere, other than at the address indicated beneath
its signature hereto or at one of the locations identified in Part A of Annex 5
hereto or in transit from one of such locations to another or (ii) change its
corporate name, or the name under which it does business, from the name shown on
the signature pages hereto; provided, however, that the Guarantor may do
business in the states and under the names specified in Part B of Annex 5
hereto.
6.08 Private Sale. The Administrative Agent and the Lenders
shall incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 6.05 hereof conducted in a
commercially reasonable manner. The Guarantor hereby waives any claims against
the Administrative Agent or any Lender arising by reason of the fact that the
price at which the Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale or was less than
the aggregate amount of the Secured Obligations, even if the Administrative
Agent accepts the first offer received and does not offer the Collateral to more
than one offeree.
6.09 Application of Proceeds. Except as otherwise herein
expressly provided and except as provided below in this Section 6.09, the
proceeds of any collection, sale or other realization of all or any part of the
Collateral pursuant hereto, and any other cash at the time held by the
Administrative Agent under Section 5 hereof or this Section 6, shall be applied
by the Administrative Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Administrative Agent and the
reasonable fees and expenses of its agents and counsel, and all
reasonable expenses incurred and advances made by the Administrative
Agent in connection therewith;
Next, to the payment in full of the Secured Obligations, in
each case equally and ratably in accordance with the respective amounts
thereof then due and owing or as the Lenders holding the same may
otherwise agree; and
-15-
Finally, to the payment to the Guarantor, or its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining.
Notwithstanding the foregoing, the proceeds of any cash or other amounts held in
the "Letter of Credit Liabilities Sub-Account" of the Collateral Account
pursuant to Section 5.04 hereof shall be applied first to the Letter of Credit
Liabilities outstanding from time to time and second to the other Secured
Obligations in the manner provided above in this Section 6.09.
As used in this Section 6, "proceeds" of Collateral shall mean
cash, securities and other property realized in respect of, and distributions in
kind of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Guarantor or any issuer of or obligor
on any of the Collateral.
6.10 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Administrative Agent while no Event of Default
has occurred and is continuing, upon the occurrence and during the continuance
of any Event of Default the Administrative Agent is hereby appointed the
attorney-in-fact of the Guarantor for the purpose of carrying out the provisions
of this Section 6 and taking any action and executing any instruments that the
Administrative Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, so long as the
Administrative Agent shall be entitled under this Section 6 to make collections
in respect of the Collateral, the Administrative Agent shall have the right and
power to receive, endorse and collect all checks made payable to the order of
the Guarantor representing any dividend, payment or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same.
6.11 Termination. When all Secured Obligations shall have been
paid in full and the Commitments of the Lenders under the Credit Agreement and
all Letter of Credit Liabilities shall have expired or been terminated, this
Agreement shall terminate, and the Administrative Agent shall forthwith cause to
be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and
money received in respect thereof, to or on the order of the Guarantor and to be
released and canceled all licenses and rights referred to in Section 6.04(a)
hereof. The Administrative Agent shall also execute and deliver to the Guarantor
upon such termination such Uniform Commercial Code termination statements,
certificates for terminating the Liens on the Motor Vehicles and such other
documentation as shall be reasonably requested by the Guarantor to effect the
termination and release of the Liens on the Collateral.
6.12 Further Assurances. The Guarantor agrees that, from time
to time upon the written request of the Administrative Agent, the Guarantor will
execute and deliver such further documents and do such other acts and things as
the Administrative Agent may reasonably request in order fully to effect the
purposes of this Agreement.
-16-
6.13 Release of Motor Vehicles. So long as no Event of Default
shall have occurred and be continuing, upon the request of the Guarantor, the
Administrative Agent shall execute and deliver to the Guarantor such instruments
as the Guarantor shall reasonably request to remove the notation of the
Administrative Agent as lienholder on any certificate of title for any Motor
Vehicle; provided that any such instruments shall be delivered, and the release
effective only upon receipt by the Administrative Agent of a certificate from
the Guarantor stating that the Motor Vehicle the lien on which is to be released
is to be sold or has suffered a casualty loss (with title thereto passing to the
casualty insurance company therefor in settlement of the claim for such loss).
Section 7. Miscellaneous.
7.01 No Waiver. No failure on the part of the Administrative
Agent or any of its agents to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by the
Administrative Agent or any of its agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
7.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telexed, telecopied or delivered to the
intended recipient at the "Address for Notices" specified beneath its name on
the signature pages hereof or, as to either party, at such other address as
shall be designated by such party in a notice to the other party. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telecopier or personally delivered or,
in the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
7.03 Expenses. The Guarantor agrees to reimburse each of the
Lenders and the Administrative Agent for all reasonable out-of-pocket costs and
expenses of the Lenders and the Administrative Agent (including, without
limitation, the reasonable fees and expenses of legal counsel) in connection
with (i) any Default and any enforcement or collection proceeding resulting
therefrom, including, without limitation, all manner of participation in or
other involvement with (w) performance by the Administrative Agent of any
obligations of the Guarantor in respect of the Collateral that the Guarantor has
failed or refused to perform, (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, or any actual or attempted
sale, or any exchange, enforcement, collection, compromise or settlement in
respect of any of the Collateral, and for the care of the Collateral and
defending or asserting rights and claims of the Administrative Agent in respect
thereof, by litigation or otherwise, including expenses of insurance, (y)
judicial or regulatory proceedings and (z) workout, restructuring or other
negotiations or proceedings (whether or not the workout, restructuring or
transaction contemplated thereby is consummated) and (ii) the enforcement of
this Section 7.03,
-17-
and all such costs and expenses shall be Secured Obligations entitled to the
benefits of the collateral security provided pursuant to Section 4 hereof.
7.04 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by the
Guarantor and the Administrative Agent (with the consent of the Majority Lenders
as specified in Section 10.09 of the Credit Agreement). Any such amendment or
waiver shall be binding upon the Administrative Agent and each Lender, each
holder of any of the Secured Obligations and the Guarantor.
7.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Guarantor, the Administrative Agent, the Lenders and each holder of any of the
Secured Obligations (provided, however, that the Guarantor shall not assign or
transfer its rights hereunder without the prior written consent of the
Administrative Agent).
7.06 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
7.07 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and either of the parties hereto may execute this Agreement by
signing any such counterpart.
7.08 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the law of the State of
New York. The Guarantor hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of the
Supreme Court of the State of New York sitting in New York County (including its
Appellate Division), and of any other appellate court in the State of New York,
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
7.09 Waiver of Jury Trial. EACH OF THE GUARANTOR, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
-18-
7.10 Agents and Attorneys-in-Fact. The Administrative Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
7.11 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Administrative
Agent and the Lenders in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
-19-
IN WITNESS WHEREOF, the parties hereto have caused this
Guarantee and Security Agreement to be duly executed and delivered as of the day
and year first above written.
IN-FLIGHT ENTERTAINMENT, LLC
By: BE Aerospace, Inc., Member
By
--------------------------
Title:
Address for Notices:
In-Flight Entertainment, LLC
00000 Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. XxXxxxxxx
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
-------------------------
Title:
Address for Notices:
The Chase Manhattan Bank, as
Administrative Agent
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
The Chase Manhattan Bank
Agent Bank Services Group
0xx Xxxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
ANNEX 1
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATION AND
APPLICATIONS FOR CORPYRIGHT REGISTRATIONS
Title Date Filed Registration No. Effective Date
---------------------------------------------------------------------------
[None]
ANNEX 2
LIST OF PATENTS AND PATENT APPLICATIONS
File Patent Country Registration No. Date
----------------------------------------------------------------------------
[None]
ANNEX 3
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE XXXX REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE XXXX REGISTRATIONS
U.S. Trademarks
---------------
Application (A)
Registration (R) Registration
Xxxx or Series No. (S) or Filing Date
------------------------------------------------------------------------------
[None]
Foreign Trademarks
------------------
Application (A) Registration or
Xxxx Registration (R) Country Filing Date (F)
----------------------------------------------------------------------------
[None]
ANNEX 4
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
[None]
ANNEX 5
LIST OF LOCATIONS
Part A - List of Locations.
Part B - Trade Names/State
Trade Name State
BE Aerospace, Inc. California
In-Flight Entertainment California
EXHIBIT B
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Fourth Amended and Restated Credit Agreement dated as
of October 29, 1993 and amended and restated as of
April 3, 1998 (as so amended and restated, the
"Credit Agreement"), between BE Aerospace, Inc. (the
"Company"), the lenders named therein and The Chase
Manhattan Bank, as Administrative Agent.
Ladies and Gentlemen:
As a Lender party to the Credit Agreement, we have agreed with
the Company pursuant to Section 11.12 of the Credit Agreement to use reasonable
precautions to keep confidential, except as otherwise provided therein, all
non-public information identified by the Company as being confidential at the
time the same is delivered to us pursuant to the Credit Agreement.
As provided in said Section 11.12, we are permitted to provide
you, as a prospective [holder of a participation in the Loans (as defined in the
Credit Agreement)] [assignee Lender], with certain of such non-public
information subject to the execution and delivery by you, prior to receiving
such non-public information, of a Confidentiality Agreement in this form. Such
information will not be made available to you until your execution and return to
us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on
behalf of yourself and each of your affiliates, directors, officers, employees
and representatives) that (A) such information will not be used by you except in
connection with the proposed [participation][assignment] mentioned above and (B)
you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any
of the Lenders or the Administrative Agent, (iii) to bank examiners, auditors or
accountants, (iv) to the Administrative Agent or any other Lender (or to Chase
Securities Inc.), (v) in connection with any litigation to which you or any one
or more of the Lenders or the Administrative Agent are a party, (vi) to a
subsidiary or affiliate of yours as provided in Section 11.12(a) of the Credit
Agreement or (vii) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) first executes and delivers to you a Confidentiality Agreement
substantially in the form hereof; provided, further, that (x) unless
specifically prohibited by applicable law or court order, you agree, prior to
disclosure thereof, to notify the Company of any request for disclosure of any
such non-public information (A) by any governmental agency or representative
thereof (other than any such request in connection with an examination of your
financial condition by such governmental agency) or (B) pursuant to legal
process and (y) that in no event shall you be obligated to return any materials
furnished to you pursuant to this Confidentiality Agreement.
Please indicate your agreement to the foregoing by signing as
provided below the enclosed copy of this Confidentiality Agreement and returning
the same to us.
Very truly yours,
[INSERT NAME OF LENDER]
By
--------------------------
The foregoing is agreed to as of the date of this letter.
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By
------------------------
