REVOLVING LOAN AGREEMENT
This REVOLVING LOAN AGREEMENT dated as of April 11, 2001 (the
"Agreement"), is entered into by and between AAR CORP., a Delaware corporation
(the "Borrower"), whose address is 0000 Xxxxx Xxxx Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxx 00000 and LASALLE BANK NATIONAL ASSOCIATION, a national banking
association (the "Bank"), whose address is 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000.
In consideration of the mutual agreements hereinafter set forth, the
Borrower and the Bank hereby agree as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. For the purposes of this Agreement, the
following capitalized words and phrases shall have the meanings set forth below.
"ACCOUNT" shall have the meaning set forth in Section 12.1.
"ACCOUNTS RECEIVABLE" shall have the meaning set forth in
Section 8.4.
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by
which the Borrower or any of its Subsidiaries (i) acquires any going
business or all or substantially all of the assets of any firm,
corporation or division thereof, whether through purchase of assets,
merger or otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the
election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding partnership interests of a
partnership.
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person owns 10% or more of any class of voting securities
(or other ownership interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a legal holiday on which banks are authorized or required to
be closed for the conduct of commercial banking business in Chicago,
Illinois.
"BORROWER'S UNSECURED LENDERS" shall mean any lender extending
credit to Borrower on an unsecured basis under similar revolving loan
facilities, including, but not
limited to, Bank One, Bank of America, N.A. The Northern Trust Company
and any other lenders who may replace these lenders or be added to
these facilities from time to time.
"CAPITAL LEASE" shall mean, as to any person or entity, a
lease of any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, by such person or entity
as lessee that is, or should be, in accordance with Financial
Accounting Standards Board Statement No. 13, as amended from time to
time, or, if such Statement is not then in effect, such statement of
GAAP as may be applicable, recorded as a "capital lease" on the balance
sheet of the Borrower prepared in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" of a person means the amount
of the obligations of such person under Capitalized Leases which would
be shown as a liability on a balance sheet of such person prepared in
accordance with GAAP.
"CHANGE IN CONTROL" means (i) the acquisition by any person,
or two or more persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of
20% or more of the outstanding shares of voting stock of the Borrower
or (ii) a majority of the directors on the Borrower's Board of
Directors shall cease to be directors of the Borrower during an twelve
month period.
"CODE" shall mean the United States Bankruptcy Code, as now
existing or hereafter amended.
"CONSOLIDATED ASSETS" means the total consolidated assets of
the Borrower and its Subsidiaries determined in accordance with GAAP.
"CONSOLIDATED CURRENT ASSETS" means the total consolidated
current assets of the Borrower and its Subsidiaries determined in
accordance with GAAP.
"CONSOLIDATED CURRENT LIABILITIES" means the total
consolidated current liabilities of the Borrower and its Subsidiaries
determined in accordance with GAAP.
"CONSOLIDATED EARNINGS AVAILABLE FOR FIXED CHARGES" means, for
any period, the sum of (i) Consolidated Net Income (excluding gains and
losses from the sale of assets other than in the ordinary course of
business and income or losses derived from discontinued operations),
PLUS to the extent deducted in determining Consolidated Net Income (ii)
all provisions for any federal, state, or other income taxes made by
the Borrower and its Subsidiaries during such period, PLUS (iii)
Consolidated Fixed Charges during such period, and PLUS (iv) deferred
financing costs for such period.
"CONSOLIDATED FIXED CHARGES" means, without duplication, for
any period, the sum of (i) current maturities for such period, (ii)
interest expense on indebtedness (excluding capitalized leases) for
such period, PLUS (iii) total rental expense under all
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leases other than capitalized leases, and PLUS (iv) imputed interest
expense under capitalized leases for the Borrower and its Subsidiaries
for such period.
"CONSOLIDATED FUNDED DEBT" means all Indebtedness having a
final maturity of more than one year plus unsecured Indebtedness to the
Bank.. Consolidated Funded Debt shall not include payments due within
one year from the date as of which a calculation of Consolidated Funded
Debt is made.
"CONSOLIDATED LIABILITIES" means the total consolidated
liabilities of the Borrower and its Subsidiaries determined in
accordance with GAAP.
"CONSOLIDATED NET INCOME" shall mean, for any period, the net
income (or loss) of the Borrower and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
accordance with GAAP; PROVIDED, that there shall be excluded (i) the
income (or loss) of any Affiliate of the Borrower or other Person(other
than a Subsidiary of the Borrower) in which any Person (other than the
Borrower or any of its Subsidiaries) has a joint interest, except to
the extent of the amount of dividends or other distributions actually
paid to the Borrower, or any of its Subsidiaries by such Affiliate or
other Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of the
Borrower or is merged into or consolidated with the Borrower or any of
its Subsidiaries or that Person's assets are acquired by the Borrower
or any of its Subsidiaries, and (iii) the income of any Subsidiary of
the Borrower to the extent that the declaration or payment of dividends
or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.
"CONSOLIDATED NET WORTH" means, as of any date of
determination, the consolidated stockholders' equity of the Borrower
and its Subsidiaries determined in accordance with GAAP.
"CONSOLIDATED SECURED LIABILITIES" means the aggregate amount
of Consolidated Liabilities which are secured by any Lien (other than
Liens permitted pursuant to any of clauses (a), (d), (e), (f), (h) and
(k) of Section 8.6) on any property of the Borrower or any of its
Subsidiaries.
"CONSOLIDATED TANGIBLE NET WORTH" means, as of any date of
determination, the sum of (a) Consolidated Net Worth, less consolidated
Intangible Assets of the Borrower and its Subsidiaries, plus (b)
Subordinated Debt. For purposes of this definition "Intangible Assets"
means the amount (to the extent reflected in determining such
Consolidated Net Worth ) of (i) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of assets of
a going concern business made within twelve months after the
acquisition of such business) in the book value of any asset owned by
the Borrower or a Consolidated Subsidiary subsequent to May 31, 2000,
and (ii) all unamortized debt discount and expense, unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade
names, copyrights, organization or development
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expenses, costs in excess of underlying assets of acquired companies,
covenants to not compete, and other intangible items, for purposes of
this clause (ii), in each case, to the extent such items are disclosed
as separate line items on the Borrower's financial statements required
under Section 9.7.
"CONSOLIDATED TOTAL CAPITALIZATION" means the sum of (i) the
remainder of (a) Consolidated Tangible Net Worth, minus (b)
Subordinated Debt, plus (ii) Consolidated Funded Debt.
"CONTINGENT OBLIGATION" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the
obligation or liability of any other Person, or agrees to maintain the
net worth or working capital or other financial condition of any other
Person, or otherwise assures any creditor of such other Person against
loss, including, without limitation, a comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit
or similar instrument; provided, however, that Contingent Obligations
shall not include (i) Contingent Obligations resulting from endorsement
of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of the Borrower's and each
Subsidiary's business, (ii) Contingent Obligations by the Borrower of
any Subsidiary's Indebtedness (including, for the avoidance of doubt,
obligations arising out of overdraft and similar cash management
facilities) permitted to exist pursuant to this Agreement and any
Subsidiary's obligations for Rentals permitted by Section 8.7, (iii)
any obligations in connection with the Receivables Securitization.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower or any of its
Subsidiaries, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"DEFAULT RATE" shall mean a floating per annum rate of
interest equal to the Prime Rate plus two percent (2.00%).
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Borrower
organized under the laws of any State of the United States of America
or the District of Columbia, all or substantially all of whose assets
are located, and whose business is conducted, in one or more of any
such States or District.
"ENVIRONMENTAL LAWS" shall mean all federal, state, district,
local and foreign laws, rules, regulations, ordinances, and consent
decrees relating to health, safety, hazardous substances, pollution and
environmental matters, as now or at any time hereafter in effect,
applicable to the Borrower's business or facilities owned or operated
by the Borrower, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contamination,
chemicals, or hazardous, toxic or dangerous substances, materials or
wastes in the environment (including, without limitation, ambient air,
surface water, land surface or subsurface strata) or otherwise relating
to the
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generation, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials.
"ERISA" means the United States Employee Retirement Income
Security Act of 1974, as amended.
"EVENT OF DEFAULT" shall mean any of the events or conditions
set forth in Section 11 hereof.
"FACILITY FEE" means a facility fee on the Commitment in an
amount equal to (a) 0.175% per annum when the Borrower has an
Investment Grade Rating or (b) 0.25% per annum when the Borrower does
not have an Investment Grade Rating.
"FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio
of (a) Consolidated Earnings Available for Fixed Charges to (b)
Consolidated Fixed Charges for such period.
"FOREIGN ACCOUNTS" means Accounts with respect to which the
obligor is a Person which is (i) organized under the laws of a
jurisdiction other than the United States of America, any State of the
United States of America or the District of Columbia, in the case of a
Person which is not a natural person, or (ii) a citizen of a country
other than the United States of America, in the case of a natural
person.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Borrower,
which is not a Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles,
using the accrual basis of accounting and consistently applied.
"HAZARDOUS MATERIALS" shall mean any hazardous, toxic or
dangerous substance, materials and wastes, including, without
limitation, hydrocarbons (including naturally occurring or man-made
petroleum and hydrocarbons), flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, biological substances,
polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or contaminants (including, without
limitation, materials which include hazardous constituents), sewage,
sludge, industrial slag, solvents and/or any other similar substances,
materials or wastes that are or become regulated under any
Environmental Law (including without limitation, any that are or become
classified as hazardous or toxic under any Environmental Law).
"INDEBTEDNESS" shall mean as determined in accordance with
GAAP (i) obligations for borrowed money other than those incurred on a
non-recourse basis, (ii) obligations representing the deferred purchase
price of property or services (other than accounts payable and other
accrued liabilities arising in the ordinary course of such Person's
business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by Liens (other than Liens permitted
pursuant to any of clauses (a),
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(d), (e), (f), (h) and (k) of Section 8.6) or payable out of the
proceeds or production from property now or hereafter owned or acquired
(iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease Obligations and (vi) net liabilities
under currency or interest rate swap, exchange or cap agreements;
provided, however, that Indebtedness shall not include obligations in
connection with operating leases and leveraged leases.
"INTEREST PERIOD" shall mean, with regard to any LIBOR Loan,
successive two week, one, two, three or six month periods as selected
from time to time by the Borrower by notice given to the Bank not less
than three Business Days prior to the first day of each respective
Interest Period; provided, however, that (i) each such Interest Period
occurring after the initial Interest Period of any LIBOR Loan shall
commence on the day on which the preceding Interest Period for such
LIBOR Loan expires, (ii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that if such extension
would cause the last day of such Interest period to occur in the next
following calendar month, then the last day of such Interest Period
shall occur on the immediately preceding Business Day; (iii) whenever
the first day of any Interest Period occurs on a day of a month for
which there is no numerically corresponding day in the calendar month
in which such Interest Period terminates, such Interest Period shall
end on the last Business Day of such calendar month; and (iv)the final
Interest Period must be such that this expiration occurs on or before
the Maturity Date.
"INTEREST RATE" shall mean the Borrower's option of,
(i) LIBOR for the relevant Interest Period (rounded
upward if necessary, to the nearest 1/16 of 1.00%) plus (1)
.40% at all times when the Borrower has an Investment Grade
Rating; and (2) 1.00% at all times when the Borrower does not
have an Investment Grade Rating. The LIBOR Rate shall be fixed
for each Interest Period; or
(ii) the Prime Rate plus zero % at all times when the
Borrower has in Investment Grade Rating and 0.50% at all
times when the Borrower does not have an Investment Grade
Rating.
Provided, however, that in no event shall the Interest Rate be
less than the highest rate charged at any time by the
Borrower's Unsecured Lenders.
"INTERNAL REVENUE CODE" means the United States Internal
Revenue Code of 1986, as amended from time to time.
"INVESTMENT" of a person means any loan, advance (other than
commission, travel and similar advances to its officers, employees,
agents and representatives made in the ordinary course of business),
extension of credit (other than accounts receivable arising in
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the ordinary course of business), deposit account or contribution of
capital by such person to any other person or any investment in, or
purchase or other acquisition of, the stock, partnership interests,
notes, debentures or other securities of any other person made by such
person.
"INVESTMENT GRADE RATING" means, the context of the Borrower
having an Investment Grade Rating, that the Borrower's senior unsecured
long term debt is rated both (a) BBB- or better by Standard & Poor's
Ratings Services, a division of the McGraw Hill Companies, Inc. and (b)
Baa3 or better by Xxxxx'x Investor Service, Inc.
"LIABILITIES" shall mean at all times all liabilities of the
Borrower that would be shown as such on a balance sheet of the Borrower
prepared in accordance with GAAP.
"LIBOR" shall mean a rate of interest equal to the per annum
rate of interest at which United States dollar deposits in an amount
comparable to the amount of the relevant LIBOR Loan and for a period
equal to the relevant Interest Period are offered generally to the Bank
(rounded upward if necessary, to the nearest 1/16 of 1.00%) in the
London Interbank Eurodollar market at 11:00 a.m. (London time) two
Business Days prior to the commencement of each Interest Period, or as
LIBOR is otherwise determined by the Bank in its sole and absolute
discretion, such rate to remain fixed for such Interest Period. The
Bank's determination of LIBOR shall be conclusive, absent manifest
error.
"LIBOR LOAN" or "LIBOR LOANS" shall mean that portion, and
collectively those portions, of the aggregate outstanding principal
balance of the Revolving Loans that will bear interest at the LIBOR
Rate, of which at any time and from time to time, the Borrower may
identify no more than five advances of the Revolving Loans which will
bear interest at the LIBOR Rate, of which each particular LIBOR Loan
must be in the amount of $1,000,000 or a higher integral multiple of
$500,000.
"LIEN" shall mean any mortgage, pledge, hypothecation,
judgment lien or similar legal process, title retention lien, or other
lien or security interest, including, without limitation, the interest
of a vendor under any conditional sale or other title retention
agreement and the interest of a lessor under a lease of any interest in
any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, by such person or entity as lessee that is, or
should be, a Capital Lease on the balance sheet of the Borrower
prepared in accordance with GAAP.
"LOANS" shall mean, collectively, all Revolving Loans made by
the Bank to the Borrower under and pursuant to this Agreement.
"LOAN DOCUMENTS" shall have the meaning set forth in Section
3.1.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the business, properties, financial condition, or results of
operations on the Borrower and its Subsidiaries taken as a whole, (ii)
the ability of the Borrower to perform its Obligations
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under this Agreement, or (iii) the validity or enforceability of this
Agreement or the rights or remedies of the Bank thereunder.
"MATURITY DATE" shall mean April 10, 2002.
"MULTIEMPLOYER PLAN" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the
Borrower or any member of the Controlled Group is a party to which more
than one employer is obligated to make contributions.
"NOTE" shall mean the Revolving Note.
"OBLIGATIONS" shall mean the Loans, as evidenced by the Note,
all interest accrued thereon, any accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the
Borrower to the Bank arising under the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PLAN" means an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Internal Revenue Code, as to which the Borrower or
any member of the Controlled Group may have any liability.
"PRIME RATE" shall mean the floating per annum rate of
interest which at any time, and from time to time, shall be most
recently announced by the Bank as its Prime Rate, which is not intended
to be the Bank's lowest or most favorable rate of interest at any one
time. The effective date of any change in the Prime Rate shall for
purposes hereof be the date the Prime Rate is changed by the Bank. The
Bank shall not be obligated to give notice of any change in the Prime
Rate.
"REGULATORY CHANGE" means any change in law or any
governmental or quasi-governmental rule, regulation, policy, guideline
or directive, to which the Bank must comply.
"RENTALS" of a person means the aggregate fixed amounts
payable by such person under any lease or real or personal property
having an original term (including any required renewals or any
renewals at the option of the lessor or lessee) on one year or more,
but does not include any amounts payable under Capitalized Leases of
such person.
"REPORTABLE EVENT" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such section,
with respect to a Plan, excluding, however, such events as to which the
PBGC by regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such event,
provide, however, that a failure to meet the minimum funding standard
of Section 412 of the Internal Revenue Code and of Section 302 of ERISA
shall be a Reportable
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Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Internal Revenue Code.
"RESTRICTED PAYMENTS" means collectively, all dividends (cash,
stock, asset or otherwise) and all payments on any class of securities
(specifically including all Subordinated Debt, but excluding any other
debt securities) issued by the Borrower or any Subsidiary, whether such
securities are now, or may hereafter be, authorized or outstanding and
any payment by the Borrower or any Subsidiary on account of the
purchase, redemption or retirement of any class of securities
(specifically including all Subordinated Debt, but excluding all other
debt securities) issued by it, and any distribution in respect to any
of the foregoing, whether directly or indirectly.
"REVOLVING LOAN" or "REVOLVING LOANS" shall mean,
respectively, each direct advance and the aggregate of all such direct
advances, made by the Bank to the Borrower under and pursuant to this
Agreement, as set forth in Section 2.1 of this Agreement.
"REVOLVING LOAN COMMITMENT" shall mean Twenty Five Million and
00/100 Dollars ($25,000,000.00).
"REVOLVING NOTE" shall have the meanings set forth in Section
4 hereof.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the
Borrower of any member of the Controlled Group for employees of the
Borrower or any member of the Controlled Group.
"SUBORDINATED DEBT" means indebtedness of the Borrower or any
Subsidiary evidenced by instruments containing provisions by which the
payment of such indebtedness is postponed and subordinated to the
payment of the Revolving Note, which subordination provisions and the
provisions for payment shall be in form and substance satisfactory to
the Bank as evidenced by its prior written consent thereto.
"SUBSIDIARY" and "SUBSIDIARIES" shall mean, respectively, each
and all such corporations, partnerships, limited partnerships, limited
liability companies, limited liability partnerships or other entities
of which or in which the Borrower owns directly or indirectly more than
fifty percent (50.00%) of (i) the combined voting power of all classes
of stock having general voting power under ordinary circumstances to
elect a majority of the board of directors of such entity if a
corporation, (ii) the management authority and capital interest or
profits interest of such entity, if a partnership, limited partnership,
limited liability company, limited liability partnership, joint venture
or similar entity, or (iii) the beneficial interest of such entity, if
a trust, association or other unincorporated organization.
"UCC" shall mean the Uniform Commercial Code in effect in
Illinois from time to time.
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"UNFUNDED LIABILITIES" means the aggregate unfunded value of
accumulated benefits under all Single Employer Plans, all determined in
accordance with GAAP as of the then most recent valuation date for such
Plans.
1.2 ACCOUNTING TERMS. Any accounting terms used in this Agreement which
are not specifically defined herein shall have the meanings customarily given
them in accordance with GAAP. Calculations and determinations of financial and
accounting terms used and not otherwise specifically defined hereunder and the
preparation of financial statements to be furnished to the Bank pursuant hereto
shall be made and prepared, both as to classification of items and as to amount,
in accordance with GAAP as used in the preparation of the financial statements
of the Borrower on the date of this Agreement. If any changes in accounting
principles or practices from those used in the preparation of the financial
statements are hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or any
successor thereto or agencies with similar functions), which results in a
material change in the method of accounting in the financial statements required
to be furnished to the Bank hereunder or in the calculation of financial
covenants, standards or terms contained in this Agreement, the parties hereto
agree to enter into good faith negotiations to amend such provisions so as
equitably to reflect such changes to the end that the criteria for evaluating
the financial condition and performance of the Borrower will be the same after
such changes as they were before such changes; and if the parties fail to agree
on the amendment of such provisions, the Borrower will furnish financial
statements in accordance with such changes but shall provide calculations for
all financial covenants, perform all financial covenants and otherwise observe
all financial standards and terms in accordance with applicable accounting
principles and practices in effect immediately prior to such changes.
Calculations with respect to financial covenants required to be stated in
accordance with applicable accounting principles and practices in effect
immediately prior to such changes shall be reviewed and certified by the
Borrower's accountants.
1.3 OTHER TERMS DEFINED IN UCC. All other capitalized words and phrases
used herein and not otherwise specifically defined shall have the respective
meanings assigned to such terms as in the UCC in effect from time to time.
1.4 OTHER DEFINITIONAL PROVISIONS; CONSTRUCTION. Whenever the context
so requires, the neuter gender includes the masculine and feminine, the single
number includes the plural, and vice versa, and in particular the word
"Borrower" shall be so construed. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
references to Article, Section, Subsection, Annex, Schedule, Exhibit and like
references are references to this Agreement unless otherwise specified. An Event
of Default shall "continue" or be "continuing" until such Event of Default has
been cured to the reasonable satisfaction of the Bank or waived in accordance
with Section 13.3 hereof. References in this Agreement to any party shall
include such party's successors and permitted assigns. References to any
"Section" shall be a reference to such Section of this Agreement unless
otherwise stated. To the extent any of the provisions of the other Loan
Documents are inconsistent with the terms of this Loan Agreement, the provisions
of this Loan Agreement shall govern.
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2. COMMITMENT OF THE BANK.
2.1 REVOLVING LOANS.
(a) REVOLVING LOAN COMMITMENT. Subject to the terms and
conditions of this Agreement and the other Loan Documents, and in
reliance upon the representations and warranties of the Borrower set
forth herein and in the other Loan Documents, the Bank agrees to make
such Revolving Loans at such times as the Borrower may from time to
time request until, but not including, the Maturity Date, and in such
amounts as the Borrower may from time to time request, provided,
however, that the aggregate principal balance of all Revolving Loans
outstanding at any time shall not exceed the Revolving Loan Commitment.
Revolving Loans made by the Bank may be repaid and, subject to the
terms and conditions hereof, borrowed again up to, but not including
the Maturity Date unless the Revolving Loans are otherwise terminated
or extended as provided in this Agreement. The Revolving Loans shall be
used by the Borrower for general corporate needs of the Borrower.
(b) REVOLVING LOAN INTEREST AND PAYMENTS. Except as otherwise
provided in this Section 2.1(b), the principal amount of the Revolving
Loans outstanding from time to time shall bear interest at the Interest
Rate. Accrued and unpaid interest on the unpaid principal balance of
all Revolving Loans outstanding from time to time which are Prime
Loans, shall be due and payable monthly, in arrears, commencing on May
1, 2001 and continuing on the first day of each calendar month
thereafter, and on the Maturity Date. Accrued and unpaid interest on
the unpaid principal balance of all Revolving Loans outstanding from
time to time which are LIBOR Loans shall be payable LIBOR on the last
Business Day of each Interest Period, commencing on the first such date
to occur after the date hereof, on the date of any principal repayment
of a LIBOR Loan and on the Maturity Date; provided however, that
interest on six month LIBOR borrowings shall be payable quarterly. Any
amount of principal or interest on the Revolving Loans which is not
paid when due, whether at stated maturity, by acceleration or
otherwise, shall bear interest payable on demand at the Default Rate.
(c) REVOLVING LOAN PRINCIPAL REPAYMENTS.
(i) MANDATORY PRINCIPAL PREPAYMENTS. All Revolving
Loans hereunder shall be repaid by the Borrower on the
Maturity Date, unless payable sooner pursuant to the
provisions of this Agreement. In the event the aggregate
outstanding principal balance of all Revolving Loans hereunder
at any time exceed the Revolving Loan Commitment, the Borrower
shall, without notice or demand of any kind, immediately make
such repayments of the Revolving Loans or take such other
actions as shall be necessary to eliminate such excess.
(ii) OPTIONAL PREPAYMENTS. The Borrower may from time
to time prepay the Revolving Loans, in whole or in part,
without any prepayment penalty whatsoever.
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2.2 ADDITIONAL LIBOR LOAN PROVISIONS.
(a) LIBOR LOAN PREPAYMENTS. Notwithstanding anything to the
contrary contained herein, the principal balance of any LIBOR Loan may
not be prepaid in whole or in part at any time. If, for any reason, a
LIBOR Loan is paid prior to the last Business Day of any Interest
Period, the Borrower agrees to indemnify the Bank against any loss
(including any loss on redeployment of the funds repaid), cost or
expense incurred by the Bank as a result of such prepayment.
(b) LIBOR UNAVAILABILITY. If the Bank determines in good faith
(which determination shall be conclusive, absent manifest error) prior
to the commencement of any Interest Period that (i) United States
dollar deposits of sufficient amount and maturity for funding any LIBOR
Loan are not available to the Bank in the London Interbank Eurodollar
market in the ordinary course of business, or (ii) by reason of
circumstances affecting the London Interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the rate of
interest to be applicable to the relevant LIBOR Loan, the Bank shall
promptly notify the Borrower thereof and, so long as the foregoing
conditions continue, a Revolving Loan may not be advanced as a LIBOR
Loan thereafter. In addition, at the Borrower's option, each existing
LIBOR Loan shall be immediately (i) converted to a Prime Loan on the
last Business Day of the then existing Interest Period, or (ii) due and
payable on the last Business Day of the then existing Interest Period,
without further demand, presentment, protest or notice of any kind, all
of which are hereby waived by the Borrower.
(c) REGULATORY CHANGE. In addition, if, after the date hereof,
a Regulatory Change shall, in the reasonable determination of the Bank,
make it unlawful for the Bank to make or maintain the LIBOR Loans, then
the Bank shall promptly notify the Borrower and Revolving Loans may not
be advanced as a LIBOR Loan thereafter. In addition, at the Borrower's
option, each existing LIBOR Loan shall be immediately (i) converted to
a Prime Loan on the last Business Day of the then existing Interest
Period or on such earlier date as required by law, or (ii) due and
payable on the last Business Day of the then existing Interest Period
or on such earlier date as required by law, all without further demand,
presentment, protest or notice of any kind, all of which are hereby
waived by the Borrower.
(d) LIBOR LOAN INDEMNITY. If any Regulatory Change shall (a)
impose, modify or deem applicable any assessment, reserve, special
deposit or similar requirement against assets held by, or deposits in
or for the account of or loans by, or any other acquisition of funds or
disbursements by, the Bank; (b) subject the Bank or any LIBOR Loan to
any tax, duty, charge, stamp tax or fee or change the basis of taxation
of payments to the Bank of principal or interest due from the Borrower
to the Bank hereunder (other than a change in the taxation of the
overall net income of the Bank); or (c) impose on the Bank any other
condition regarding such LIBOR Loan or the Bank's funding thereof, and
the Bank shall reasonably determine (which determination shall be
conclusive, absent manifest error) that the result of the foregoing is
to increase the cost to
12
the Bank of making or maintaining such LIBOR Loan or to reduce the
amount of principal or interest received by the Bank hereunder, then
the Borrower shall pay to the Bank, within 15 days of demand by the
Bank, such additional amounts as the Bank shall, from time to time,
determine are sufficient to compensate and indemnify the Bank for that
portion of such increased cost or reduced amount attributable to
making, funding and maintaining such LIBOR Loan.
2.3 INTEREST AND FEE COMPUTATION; COLLECTION OF FUNDS. Except as
otherwise set forth herein, all interest and fees shall be calculated on the
basis of a year consisting of 360 days and shall be paid for the actual number
of days elapsed. Principal payments submitted in funds not immediately available
shall continue to bear interest until collected. If any payment to be made by
the Borrower hereunder or under the Note shall become due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall be included in computing any interest in respect of
such payment.
2.4 FEES. The Borrower further agrees to pay to the Bank the Facility
Fee for the period from the date hereof to and including the Maturity Date. The
Facility Fee shall be payable quarterly in advance on the date hereof and on
each Payment Date thereafter. The obligations of the Borrower under this Section
2.4 shall survive the payment of the Advances and the termination of this
Agreement.
3. CONDITIONS OF BORROWING.
Notwithstanding any other provision of this Agreement, the Bank shall
not be required to disburse or make all or any portion of the Loans if any of
the following conditions shall have occurred.
3.1 LOAN DOCUMENTS. The Borrower shall have failed to execute and
deliver to the Bank any of the following Loan Documents (collectively, the "Loan
Documents"), all of which must be satisfactory to the Bank and the Bank's
counsel in form, substance and execution:
(a) Revolving Loan Agreement. Two copies of this Agreement
clearly executed by the Borrower.
(b) Revolving Note. A Revolving Note duly executed by the
Borrower in the form of Exhibit A.
(c) A copy, certified as of the date hereof by the secretary
or assistant secretary of the Borrower, of its board of directors'
resolutions (and resolutions of other bodies, if any are deemed
necessary by counsel for the Bank) authorizing the execution of the
Loan Documents.
(d) An incumbency certificate dated the date hereof, executed
by the secretary or assistant secretary of the Borrower, which shall
identify by name and title and bear the signature of the officers of
the Borrower authorized to sign the Loan Documents and to
13
make borrowings hereunder, upon which certificate the Bank shall be
entitled to rely until informed of any change in writing by the
Borrower.
(e) A certificate signed by the chief financial officer of the
Borrower stating that on the closing date no Default or Unmatured
Default has occurred and is continuing.
(f) A written opinion dated the date hereof of the Borrower's
counsel, addressed to the Bank.
(g) A certified copy of articles of incorporation.
(h) A certified copy of a good standing certificate.
(i) Such other documents as the Bank or its counsel may have
reasonably requested.
3.2 EVENT OF DEFAULT. Any Event of Default, or any event which, with
notice or lapse of time, or both would constitute an Event of Default, shall
have occurred and be continuing.
3.3 ADVERSE EFFECT. There exists no Material Adverse Effect.
3.4 LITIGATION. Any litigation or governmental proceeding shall have
been instituted against the Borrower or any of its Subsidiaries which in the
discretion of the Bank, reasonably exercised, has a Material Adverse Effect on
the financial condition or continued operation of the Borrower and its
Subsidiaries taken as a whole.
3.5 REPRESENTATIONS AND WARRANTIES. Any representation or warranty of
the Borrower contained herein or in any Loan Document shall be untrue or
incorrect in any material way as of the date of any Loan as though made on such
date, except to the extent such representation or warranty expressly relates to
an earlier date.
4. NOTES EVIDENCING LOANS.
The Revolving Loans shall be evidenced by a single Revolving Note
(together with any and all renewal, extension, modification or replacement notes
executed by the Borrower and delivered to the Bank and given in substitution
therefor, the "Revolving Note") dated as of the date hereof in the form of
EXHIBIT "A" attached hereto, duly executed by the Borrower and payable to the
order of the Bank. At the time of the initial disbursement of a Revolving Loan
and at each time an additional Revolving Loan shall be requested hereunder or a
repayment made in whole or in part thereon, an appropriate notation thereof
shall be made on the books and records of the Bank. All amounts recorded shall
be, absent demonstrable error, conclusive and binding evidence of (i) the
principal amount of the Revolving Loans advanced hereunder (ii) any unpaid
interest owing on the Revolving Loans, and (iii) all amounts repaid on the
Revolving Loans. The failure to record any such amount or any error in recording
such amounts shall not, however, limit or otherwise affect the obligations of
the Borrower under the Revolving Note to repay the principal amount of the
Revolving Loans, together with all interest accruing thereon.
14
5. MANNER OF BORROWING.
Each Revolving Loan shall be made available to the Borrower upon its
written request in the form of EXHIBIT B, from any person whose authority to so
act has not been revoked by the Borrower in writing previously received by the
Bank. Each Revolving Loan may be advanced either as a Prime Loan or a LIBOR
Loan, provided, however, that at any time and from time to time, the Borrower
may identify no more than five (5) Revolving Loans, which may be LIBOR Loans. A
request for a Prime Loan must be received by no later than 12:00 p.m. Chicago,
Illinois time, on the day it is to be funded. A request for a LIBOR Loan must be
(i) received by no later than 12:00 p.m. Chicago, Illinois time, two days before
the day it is to be funded, and (ii) in an amount equal to One Million and
00/100 Dollars ($1,000,000.00) or a higher integral multiple of Five Hundred
Thousand and 00/100 Dollars ($500,000.00). If for any reason the Borrower shall
fail to select timely an Interest Period for an existing LIBOR Loan, then such
LIBOR Loan shall be immediately converted to a Prime Loan on the last Business
Day of the then existing Interest Period, all without demand, presentment,
protest or notice of any kind, all of which are hereby waived by the Borrower.
The proceeds of each Prime Loan or LIBOR Loan shall be made available at the
office of the Bank by credit to the account of the Borrower or by other means
requested by the Borrower and acceptable to the Bank.
The Bank is authorized to rely on the telephonic, telecopy (including
facsimile copy) or telegraphic loan requests which the Bank believes in its good
faith judgment to emanate from a properly authorized representative of the
Borrower, whether or not that is in fact the case. The Borrower does hereby
irrevocably confirm, ratify and approve all such forms of loan requests referred
to in the aforementioned sentence and advances by the Bank in reasonable
reliance thereon and does hereby indemnify the Bank against losses and expenses
(including court costs, attorneys' and paralegals' fees) and shall hold the Bank
harmless with respect thereto.
6. INTENTIONALLY OMITTED.
7. REPRESENTATIONS AND WARRANTIES.
To induce the Bank to make the Loans, the Borrower makes the following
representations and warranties to the Bank, each of which shall be true and
correct as of the date of the execution and delivery of this Agreement, and
which shall survive the execution and delivery of this Agreement:
7.1 ORGANIZATION. The Borrower is duly organized, existing and in good
standing under the laws of the State of Delaware and it has full and adequate
power to carry on and conduct its business as presently conducted, and it is
duly licensed or qualified in all foreign jurisdictions wherein the failure to
qualify would have a Material Adverse Effect , and each Subsidiary of the
Borrower is duly organized, existing and in good standing under the laws of the
state wherein such Subsidiary was organized or formed, with full and adequate
power to carry on and conduct its business as presently conducted, and is duly
licensed or qualified in all foreign jurisdictions wherein the failure to
qualify would have a Material Adverse Effect.
15
7.2 AUTHORIZATION; VALIDITY. The Borrower has full right, power and
authority to enter into this Agreement, to make the borrowings and execute and
deliver the Loan Documents as provided herein and to perform all of its duties
and obligations under this Agreement and the Loan Documents. The execution and
delivery of this Agreement and the Loan Documents will not, nor will the
observance or performance of any of the matters and things herein or therein set
forth, violate or contravene any provision of law to which the Borrower is
subject. All necessary and appropriate action has been taken on the part of the
Borrower to authorize the execution and delivery of this Agreement and the Loan
Documents. This Agreement and the Loan Documents are valid and binding
agreements and contracts of the Borrower enforceable against the Borrower in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, equity or similar laws affecting the enforcement of
creditors rights generally.
7.3 COMPLIANCE WITH LAWS. The nature and transaction of the business
and operations of the Borrower, and the use of its properties and assets,
including, but not limited to, any real estate owned or occupied by the Borrower
or its Subsidiaries, do not and during the term of the Loans shall not, violate
or conflict with any applicable law, statute, ordinance, rule, regulation or
order of any kind or nature binding on the Borrower or any of its Subsidiaries,
including, without limitation, the provisions of the Fair Labor Standards Act or
any zoning, land use, building, noise abatement, occupational health and safety
or other laws, any building permit or any condition, grant, easement, covenant,
condition or restriction, whether recorded or not binding on the Borrower or any
or its Subsidiaries except where the failure to comply would not be reasonably
expected to have a Material Adverse Effect.
7.4 ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES. Neither the Borrower
or any Subsidiary has received any notice to the effect that its operations are
not in material compliance with any applicable Environmental Laws or the subject
of any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of Hazardous Materials into the environment which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
7.5 ABSENCE OF BREACH. The execution, delivery and performance of this
Agreement, the Loan Documents and any other documents or instruments to be
executed and delivered by the Borrower in connection with the Loans shall not:
(i) violate any provisions of law or any applicable regulation, order, writ,
injunction or decree of any court or governmental authority binding on the
Borrower, or (ii) violate or result in any breach or default of any of the
terms, covenants, conditions, or provisions of any indenture, mortgage, deed of
trust, other instrument, agreement or contract of any kind to which the
Borrower, is a party or by which the Borrower, or any of its property or assets
may be bound.
7.6 FINANCIAL STATEMENTS. All financial statements submitted to the
Bank have been prepared in accordance with GAAP on a basis, except as otherwise
noted therein, consistent with the previous fiscal year and fairly present the
financial condition of the Borrower and the consolidated results of the
operations for the Borrower and its Subsidiaries as of such date and for the
periods indicated. Since the November 30, 2000 financial statement submitted by
the
16
Borrower to the Bank, there has been no Material Adverse Effect in the
financial condition or in the assets or liabilities of the Borrower and its
Subsidiaries taken as a whole.
7.7 LITIGATION . There is no litigation or governmental proceeding
pending, or to the knowledge of the Borrower, threatened, against the Borrower,
which, if adversely determined, would result in any Material Adverse Effect in
the financial condition or properties, business or operations of the Borrower.
The Borrower has filed or will file all applicable material income or other
material tax returns and has paid or will pay all material income or other
material taxes when due. There is no material controversy or objection pending,
or to the knowledge of the Borrower, threatened in respect of any material tax
returns of the Borrower.
7.8 EVENT OF DEFAULT. No Event of Default has occurred and is
continuing, and no event has occurred and is continuing which, with the lapse of
time, the giving of notice, or both, would constitute such an Event of Default
under this Agreement or any of the Loan Documents and the Borrower and/or
Subsidiaries are not in default (without regard to grace or cure periods) under
any contract or agreement to which it is a party, the effect of which default
shall materially adversely affect the performance by the Borrower of its
obligations pursuant to and as contemplated by the terms and provisions of this
Agreement.
7.9 ERISA OBLIGATIONS. The Borrower and its Subsidiaries have promptly
paid and discharged all obligations and liabilities arising under the Employee
Retirement Income Security Act of 1974 ("ERISA") of a character which if unpaid
or unperformed might result in the imposition of a Lien against any of its
properties or assets.
7.10 ADVERSE CIRCUMSTANCES. There is no Material Averse Effect.
7.11 LENDING RELATIONSHIP. The Borrower acknowledges and agrees that
the relationship hereby created with the Bank is and has been conducted on an
open and arm's length basis in which no fiduciary relationship exists and that
the Borrower has not relied and is not relying on any such fiduciary
relationship in executing this Agreement and in consummating the Loans. The Bank
represents that it will receive the Note payable to its order as evidence of a
bank loan.
7.12 INTENTIONALLY OMITTED.
7.13 COMPLIANCE WITH REGULATION U. No portion of the proceeds of the
Loans shall be used by the Borrower, or its Subsidiaries, either directly or
indirectly, for the purpose of purchasing or carrying any margin stock, within
the meaning of Regulation U as adopted by the Board of Governors of the Federal
Reserve System.
7.14 COMPLETE INFORMATION. This Agreement and all financial statements,
schedules, certificates, confirmations, agreements, contracts, and other
materials submitted to the Bank in connection with or in furtherance of this
Agreement by or on behalf of the Borrower fully and fairly state the matters
with which they purport to deal, and neither misstate any material fact nor,
separately or in the aggregate, fail to state any material fact necessary to
make the statements made not misleading.
17
7.15 PLACE OF BUSINESS. The principal place of business of the Borrower
is 0000 Xxxxx Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxx 00000 and the Borrower shall
promptly notify the Bank of any change in such location.
7.16 PLACE OF INCORPORATION. The place of incorporation of the Borrower
is the State of Delaware and the Borrower shall promptly notify the Bank of any
change in such location.
8. NEGATIVE COVENANTS.
8.1 RESTRICTED PAYMENTS. The Borrower will not, nor will it permit any
Subsidiary to, declare or make any Restricted Payments, which together with all
Restricted Payments made on or after May 31, 1995 would exceed an amount equal
to the sum of (i) $20,000,000 plus (ii) 50% of Consolidated Net Income for the
period commencing June 1, 1994 and extending to and including the last day of
the fiscal year of the Borrower immediately preceding the date on which such
Restricted Payment was made, said period to be taken as one accounting period,
except that:
(a) The Borrower may declare and pay dividends payable solely
in stock of the Borrower of the same class as that on which such
dividend is paid.
(b) The Borrower may purchase, redeem or otherwise acquire or
retire any class of its stock out of the proceeds of, or in exchange
for, a substantially concurrent issue and sale of such stock in
addition to that now issued and outstanding; provided that Borrower is
in compliance with all affirmative, negative and financial covenants
herein.
(c) Any Subsidiary may declare and pay dividends to the
Borrower.
8.2 MERGER. The Borrower will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except that:
(a) Any Domestic Subsidiary may merge or consolidate with the
Borrower (providing the Borrower shall be the continuing or surviving
corporation).
(b) Any Domestic Subsidiary may merge or consolidate with any
other Domestic Subsidiary, which is a Wholly Owned Subsidiary.
(c) Any Foreign Subsidiary may merge or consolidate with any
other Subsidiary, which is a Wholly Owned Subsidiary (provided that if
a Domestic Subsidiary is involved, such Domestic Subsidiary shall be
the continuing or surviving corporation).
8.3 SALE OF ASSETS. The Borrower will not, nor will it permit any
Subsidiary to, sell, lease, transfer, assign or otherwise dispose of (including,
for the avoidance of doubt, in connection with a sale leaseback transaction),
any of its assets (including, for the avoidance of doubt, the capital stock of
Subsidiaries, but excluding (i) inventory sold in the ordinary course of the
Borrower's or any Subsidiary's business, (ii) property formerly used in the
Borrower's or any
18
Subsidiary's business which is worn out or obsolete, (iii) assets of any
Domestic Subsidiary transferred to the Borrower or to another Domestic
Subsidiary which is a Wholly-Owned Subsidiary, (iv) assets of any Foreign
Subsidiary transferred to the Borrower or to another Subsidiary which is a
Wholly-Owned Subsidiary, (v) assets permitted to be sold or otherwise
transferred pursuant to Section 8.4 and (vi) promissory note ("Payment Note")
received as partial or full payment for assets sold if, after giving effect
thereto, the sum of all such assets transferred, assigned or otherwise disposed
of during the twelve-month period ending with (and including) the month of such
disposition either (a) represents more than 10% of Consolidated Assets
determined as of the date of (and after giving effect to ) such disposition or
(b) were responsible for more than 10% of the consolidated net sales or of the
consolidated net income of the Borrower and its Subsidiaries during such
twelve-month period.
8.4 SALE OF ACCOUNTS RECEIVABLE. Anything in Section 8.3 to the
contrary notwithstanding, the Borrower will not, nor will it permit any
Subsidiary to, sell, with or without recourse, transfer, assign, encumber or
otherwise dispose of any of its note or accounts receivable, leases or chattel
paper (collectively referred to in this Section as "Accounts Receivable") to any
Person, except that:
(a) The Borrower or any Subsidiary may sell or otherwise
dispose of any of its Accounts Receivable to the Borrower or any
Subsidiary on terms and conditions, which are in compliance with
Section 8.9.
(b) The Borrower or any Subsidiary may enter into any
arrangement with another Person pursuant to which such Person collects
the Accounts Receivable of the Borrower or such Subsidiary on behalf of
the Borrower or such Subsidiary, so long as such arrangement does not
provide for any transfer of title to, or any other interest in, such
Accounts Receivable to such Person.
(c) The Borrower or any Subsidiary may sell or otherwise
dispose of its Foreign Accounts to any Person for the purposes of
collection, provided that the aggregate face amount of all such Foreign
Accounts so transferred by the Borrower and its Subsidiaries during any
fiscal year of the Borrower shall not exceed an amount equal to 20% of
the gross Accounts Receivable of the Borrower and its Subsidiaries as
of the last day of the Borrower's immediately preceding fiscal year and
determined from the Borrower's consolidated balance sheet delivered
pursuant to Section 9.7(a).
(d) The Borrower or any Subsidiary may sell or otherwise
dispose of its interest in notes or accounts receivable on a limited
recourse basis, provided that such transfer qualifies as a sale under
GAAP and that the amount of such financing does not exceed $50,000,000
at any one time outstanding (the "Receivables Securitization").
(e) The Borrower or any Subsidiary may sell or otherwise
dispose of a Payment Note.
8.5 INVESTMENTS AND ACQUISITIONS. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and
19
advances to, and other Investments in, Subsidiaries), or commitments therefor,
or to create any Subsidiary or to become or remain a partner in any partnership
or joint venture, or to make any Acquisition of any Person, except:
(a) Short-term obligations of, or fully guaranteed by, the
United States of America.
(b) Commercial paper rated A-1 or better by Standard and
Poor's Ratings Services, a division of McGraw Hill Companies, Inc. or
P-1 or better by Xxxxx'x Investors Service, Inc.
(c) Demand deposit accounts maintained in the ordinary course
of business.
(d) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and
surplus in excess of $100,000,000.
(e) Existing Investments in Subsidiaries and other Investments
in existence on the date hereof.
(f) Loans by the Borrower to its Domestic Subsidiaries.
(g) Equity Investment by the Borrower or any of its
Subsidiaries, AAR Financial Services Corp. in leveraged leases of
aircraft, aircraft engines and related products, including investments
in partnerships and/or joint ventures related thereto not to exceed
$50,000,000.00.
(h) Loans by the Borrower and its Subsidiaries to their
respective officers and key employees in an aggregate amount not to
exceed $4,000,000 at any one-time outstanding.
(i) Investments in any institutional money market fund (i)
rated A-1 or better by Standard and Poor's Ratings Services, a division
of McGraw Hill Companies, Inc., (ii) rated P-1 by Xxxxx'x Investors
Service, Inc. or (iii) that invests in High Quality Money Market
Instruments. For purposes of this Agreement, "High Quality Money Market
Instruments" are (i) U.S. dollar-denominated instruments that have a
remaining maturity of 397 days or less and (ii) issued by an issuer
that is rated in one of the two highest rating categories for
short-term debt by any two nationally recognized statistical rating
organizations ("NRSROs") or, if only one NRSRO has issued a rating, by
that NRSRO, or if unrated, the investment advisor determines the issuer
is of comparable quality.
(j) Investments evidenced by Payment Notes.
(k) Any Acquisition that after giving effect thereto does not
cause the sum of (i) Consolidated Funded Debt, plus (ii) the aggregate
amount of Contingent Obligations of the Borrower and its Subsidiaries
to exceed 55% of Consolidated Total Capitalization.
20
(l) Investments (including without limitation Investments in
funds (insured or uninsured) managed by banks federally chartered by
the United States of America and having stockholders' equity in excess
of $150,000,000) in addition to those permitted under clauses (a)
through (k) of this Section, provided that after giving effect thereto
the aggregate amount of all such Investments for the Borrower and all
Subsidiaries during the term of this Agreement shall not exceed the
greater of (i) $6,000,000 or (ii) 20% of Consolidated Tangible Net
Worth as of the last day of the Borrower's fiscal year immediately
preceding the date on which any such Investment is made.
In determining the amount of Investments permitted under this
Section, Investments shall always be taken at the original cost
thereof, regardless of any subsequent appreciation or depreciation
therein, and loans and advances shall be taken at the principal amount
thereof then remaining unpaid from time to time.
8.6 LIENS. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the property of the
Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or
levies on its property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its
books.
(b) Deposits or pledges to secure performance of bids,
tenders, contracts (other than contracts for the repayment of
Indebtedness), leases, public or statutory obligations, surety or
appeal bonds, or other deposits or pledges for purposes of like general
nature in the ordinary course of the Borrower's business or any
Subsidiary's business.
(c) Liens incurred by the Borrower or any Subsidiary in
connection with the acquisition of property provided such Liens shall
attach only to the property acquired in the transactions in which such
Liens were created or assumed and shall secure only the Indebtedness
incurred to finance the cost of acquiring such property.
(d) Liens arising out of pledges or deposits under workers'
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
(e) Liens incidental to the conduct of business or the
ownership of properties and assets, including, those imposed by law,
such as carrier's, warehousemen's and mechanics' liens and other
similar liens arising in the ordinary course of business which secure
payment of obligations not more than 60 days past due or which are
being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books in accordance
with GAAP, or other Liens incurred in the ordinary course of business
and not in connection with borrowed money.
21
(f) Utility easements, other easements, leases, sub-leases,
rights-of-way, building restrictions and such other encumbrances or
charges against real property as are of a nature generally existing
with respect to properties of a similar character and which do not in
any material way affect the marketability of the same or interfere with
the use thereof in the business of the Borrower or the Subsidiaries.
(g) Liens existing on the date hereof.
(h) Liens which secure only Indebtedness of any Domestic
Subsidiary to the Borrower or another Domestic Subsidiary.
(i) Subject to Section 8.5(c), Liens on property the purchase
of which is being financed by the Borrower or any Domestic Subsidiary,
as the case may be, by letters of credit (or similar instruments)
issued for the account of the Borrower or any Domestic Subsidiary, as
the case may be, provided such Liens secure only the letter of credit
(or similar instrument) which is being used to finance the purchase of
such property and provided further such Liens attach only to such
property.
(j) Liens incurred by the Borrower in connection with the real
estate located in Wood Dale, Illinois, known as the Corporate
Headquarters of the Borrower securing debt not to exceed Twenty Five
Million Dollars ($25,000,000.00).
(k) Liens incurred by the Borrower and its Subsidiaries in
connection with the Receivable Securitization not to exceed Fifty
Million Dollars ($50,000,000.00) at any one-time outstanding.
8.7 RENTALS. The Borrower will not, nor will it permit any Subsidiary
to, create, incur or suffer to exist any obligation for Rentals if, as a
consequence thereof, obligations for Rentals created, incurred or suffered to
existing any one fiscal year shall be in an aggregate consolidated amount for
the Borrower and its Subsidiaries in excess of 10% of Consolidated Revenues (as
defined below) as at the end of the Borrower's fiscal year immediately preceding
the date on which such obligation is entered into, on a non-cumulative basis
from year to year. It is expressly agreed and understood that, for the purpose
of this Section, any contract between the Borrower or any Domestic Subsidiary
and the vendor of aircraft fuel shall not be considered a lease and any payments
made under any such contract by the Borrower or any Domestic Subsidiary to such
vendor shall not be considered a lease payment. "Consolidated Revenues" shall
mean the amount of "net revenues" as shown on the Borrower's consolidated income
statement.
8.8 RETIREMENT AND MODIFICATION OF SUBORDINATED INDEBTEDNESS. The
Borrower will not, nor will it permit any Subsidiary to, purchase, acquire,
redeem or retire, or make any payment on account of principal of, any
Subordinated Debt except at the stated maturity thereof or as required by
mandatory prepayment provisions or sinking fund provisions relating thereto. The
Borrower will not, nor will it permit any Subsidiary to, alter, amend, modify,
rescind, terminate or waive, or permit any breach or event of default to exist
under, any note or note evidencing such Subordinated Debt.
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8.9 AFFILIATES. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any property or service), with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms not less favorable to the Borrower
or such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction. The transactions entered into in connection
with the Receivables Securitization shall be deemed to be arms-length
transactions.
8.10 MODIFICATION OF ORGANIZATIONAL DOCUMENTS. Not permit the
Certificate or Articles of Incorporation, By-Laws or other organizational
documents of the Borrower to be amended or modified in any way that might
reasonably be expected to materially adversely affect the interests of the Bank.
9. AFFIRMATIVE COVENANTS.
9.1 COMPLIANCE WITH BANK REGULATORY REQUIREMENTS. Upon demand by the
Bank, the Borrower shall reimburse the Bank for the Bank's additional costs
and/or reductions in the amount of principal or interest received or receivable
by the Bank if at any time after the date of this Agreement any law, treaty or
regulation or any change in any law, treaty or regulation or the interpretation
thereof by any governmental authority charged with the administration thereof or
any central bank or other fiscal, monetary or other authority having
jurisdiction over the Bank or the Loans, whether or not having the force of law,
shall impose, modify or deem applicable any reserve (except reserve requirements
taken into account in calculating the Interest Rate) and/or special deposit
requirement against or in respect of assets held by or deposits in or for the
account of the Loans by the Bank or impose on the Bank any other condition with
respect to this Agreement or the Loans, the result of which is to either
increase the cost to the Bank of making or maintaining the Loans or to reduce
the amount of principal or interest received or receivable by the Bank with
respect to such Loans. Said additional costs and/or reductions will be those
which directly result from the imposition of such requirement or condition on
the making or maintaining of such Loans. All Loans shall be deemed to be match
funded for the purposes of the Bank's determination in the previous sentence.
Notwithstanding the foregoing, the Borrower shall not be required to pay any
such additional costs, which could be avoided by the Bank with the exercise of
reasonable conduct and diligence.
9.2 CONDUCT OF BUSINESS. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic or foreign corporation, as the case
may be, in its jurisdiction of incorporation and main all requisite authority to
conduct its business in each jurisdiction in which its business is conducted;
provided, that nothing contained in this Section 9.2 shall prohibit (a) any
Subsidiary from entering into a merger or consolidation otherwise permitted by
SECTION 8.2 or (b) the liquidation of any Subsidiary substantially all of whose
assets have been transferred to the Borrower or another Subsidiary in compliance
with SECTION 8.3.
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9.3 INSURANCE. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to Bank upon request full
information as to the insurance carried.
9.4 TAX LIABILITIES. The Borrower and its Subsidiaries will at all
times pay and discharge all property and other taxes, assessments and
governmental charges upon, and all claims (including claims for labor, materials
and supplies) against the Borrower, and its Subsidiaries, or any of their
respective properties, before the same shall become delinquent and before
penalties accrue thereon, unless and to the extent that the same are being
contested in good faith by appropriate proceedings, or would not have a Material
Adverse Effect.
9.5 ERISA LIABILITIES. The Borrower and its Subsidiaries shall at all
times promptly pay and discharge all ERISA obligations and liabilities of a
character which if unpaid or unperformed might result in the imposition of a
Lien against any of its properties or assets and will promptly notify the Bank
of (i) the occurrence of any Reportable Event which might result in the
termination by the PBGC of any Plan covering any officers or employees of the
Borrower, any benefits of which are, or are required to be, guaranteed by PBGC,
(ii) receipt of any notice from PBGC of its intention to seek termination of the
Plan or appointment of a trustee therefor, and (iii) its intention to terminate
or withdraw from the Plan. Neither the Borrower nor any Subsidiary shall
terminate any such Plan or withdraw therefrom unless it shall be in compliance
with all of the terms and conditions of this Agreement after giving effect to
any liability to PBGC resulting from such termination or withdrawal.
9.6 FINANCIAL STATEMENTS. The Borrower shall at all times maintain a
standard and modern system of accounting, on the accrual basis of accounting and
in all respects in accordance with GAAP, and shall furnish to the Bank or its
authorized representatives such information regarding the business affairs,
operations and financial condition of the Borrower and its Subsidiaries,
including, but not limited to:
(a) as soon as available, and in any event, within 90 days
after the close of each of its fiscal years, a copy of the annual
audited financial statements of the Borrower and its Subsidiaries, on a
consolidated and consolidating basis, including balance sheet,
statement of income and retained earnings, statement of cash flows for
the fiscal year then ended and such other information (including
nonfinancial information) as the Bank may reasonably request, in
reasonable detail, prepared and certified by an independent certified
public accountant acceptable to the Bank, containing an unqualified
opinion; and
(b) as soon as available, and in any event, within 45 days
following the end of each fiscal quarter, a copy of the unaudited
financial statements of the Borrower and its Subsidiaries, on a
consolidated and consolidating basis, regarding such fiscal quarter,
including balance sheet, statement of income and retained earnings,
statement of cash flows for the fiscal quarter then ended and the
fiscal year to date and such other information (including nonfinancial
information) as the Bank may request, in reasonable detail, prepared
and certified as accurate by the Borrower; and
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(c) At the request of the Lender, within 90 days after the
close of each fiscal year of the Borrower, for each active Subsidiary,
an unaudited balance sheet as at the close of such fiscal year and an
unaudited profit and loss statement for such fiscal year, all certified
by the Borrower's chief financial officer or Treasurer.
(d) At the request of the Lender, within 60 days after the
close of the first three quarterly periods of each of its fiscal years,
for each active Subsidiary, an unaudited balance sheet as at the close
of each such period and an unaudited profit and loss statement for the
period from the beginning of such fiscal year to the end of such
quarter, all certified by the Borrower's chief financial officer or
Treasurer.
(e) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA, except that
the Borrower shall not be required to deliver such statement for any
such fiscal year to the extent that such information is specifically
set forth in the audit report for such fiscal year delivered to the
Lender pursuant to clause (a) of this Section 9.7.
(f) As soon as possible and in any event within 10 days after
the Borrower knows that any Reportable Event has occurred with respect
to any Plan, a statement, signed by the chief financial officer or
Treasurer of the Borrower, describing said Reportable Event and the
action which the Borrower proposes to take with respect thereto.
The Borrower represents and warrants to the Bank that the financial
statements delivered to the Bank at or prior to the execution and delivery of
this Agreement and to be delivered at all times thereafter fairly present the
financial condition of the Borrower and its Subsidiaries. The Bank shall have
the right at all times during business hours to inspect the books and records of
the Borrower and its Subsidiaries and make extracts therefrom. The Borrower
agrees to advise the Bank immediately of any Material Adverse Effect in the
financial condition, the operations or any other status of the Borrower or any
of its Subsidiaries.
9.7 SUPPLEMENTAL FINANCIAL STATEMENTS. The Borrower shall immediately
upon receipt thereof, provide to the Bank copies of interim and supplemental
reports if any, submitted to the Borrower or any of its Subsidiaries by
independent accountants in connection with any interim audit or review of the
books of the Borrower or any of its Subsidiaries.
9.8 COVENANT/QUARTER COMPLIANCE REPORT. The Borrower shall, within 45
days after the end of each fiscal quarter commencing with the fiscal quarter end
February 28, 2001, deliver to the Bank a computation in such detail as the Bank
shall specify, showing compliance by the Borrower with the financial covenants
set forth in Section 10, and certified to as accurate by the Borrower by
execution and delivery to the Bank of a Compliance Certificate satisfactory to
the Bank.
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9.9 OTHER REPORTS. The Borrower shall, within such period of time as
the Bank may specify, deliver to the Bank such other information (including
non-financial information) as the Bank may reasonably request.
9.10 NOTICE OF PROCEEDINGS. The Borrower shall, promptly after
knowledge thereof shall have come to the attention of any officer of the
Borrower, give written notice to the Bank of all threatened or pending actions,
suits, and proceedings before any court or governmental department, commission,
board or other administrative agency which, if adversely determined would
reasonably be expected to have a Material Adverse Effect on the business,
property or operations of the Borrower and any of its Subsidiaries.
9.11 NOTICE OF DEFAULT. The Borrower shall, within 10 days of its
knowledge, give notice to the Bank in writing of the occurrence of an Event of
Default.
9.12 SEC REPORTS AND REPORTS TO SHAREHOLDERS. The Borrower shall
deliver to the Bank, promptly upon the filing or sending thereof, copies of all
regular, periodic or special reports of the Borrower or any Subsidiary filed
with the Securities and Exchange Commission ("SEC"); copies of all registration
statements of the Borrower or any Subsidiary filed with the SEC; and copies of
all proxy statements or other communications made to security holders generally.
In addition after an Event of Default, Borrower shall deliver to the Bank
promptly upon receipt thereof, copies of any reports received from the SEC.
9.13 OTHER DOCUMENTS. The Borrower shall deliver to Bank, promptly upon
receipt thereof, copies of all documents entered into between Borrower and
Borrower's Unsecured Lenders, including but not limited to any and all
amendments, modifications, extensions, waivers, forbearance agreements,
instruments and all documents required to be delivered in accordance with all
said documents.
10. FINANCIAL COVENANTS.
10.1 WORKING CAPITAL. The Borrower will maintain at all times a ratio
of Consolidated Current Assets to Consolidated Current Liabilities of at least
1.50 to 1.00.
10.2 CONSOLIDATED TANGIBLE NET WORTH. The Borrower will maintain at all
times Consolidated Tangible Net Worth in an amount not less than the sum of (a)
$240,000,000 plus (b) the net cash proceeds received by the Borrower from the
sale of any of its capital stock on or after May 31, 2000 plus (c) an amount
equal to the aggregate of one-third of Consolidated Net Income earned during
each of its fiscal years beginning with its fiscal year commencing June 1, 2000,
said fiscal year to be taken as one accounting period.
10.3 CONSOLIDATED SECURED LIABILITIES. The Borrower will maintain at
all times Consolidated Secured Liabilities in an amount not in excess of
$20,000,000 in addition to the permitted liens under Section 8.6. For purposes
of calculating Consolidated Secured Liabilities hereunder the obligations of the
Borrower less than $10,000,000, secured by the real estate located in Wood Dale,
Illinois, known as the Corporate Headquarters of the Borrower, shall be
excluded.
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10.4 LIMITATION OF FUNDED DEBT. The Borrower will not permit the sum of
(i) Consolidated Funded Debt plus (ii) the aggregate amount of Contingent
Obligations of the Borrower and its Subsidiaries to exceed 60% of Consolidated
Total Capitalization; PROVIDED, however, that the Borrower will not permit the
sum of (i) Consolidated Funded Debt, plus (ii) the aggregate amount of
Contingent Obligations of the Borrower and its Subsidiaries to exceed 55% of
Consolidated Total Capitalization, in the event that the Borrower or any
Subsidiary has made any Acquisition under Section 8.5(k) of this Agreement.
10.5 FIXED CHARGE COVERAGE RATIO. At such time as the Borrower is
obligated to maintain a Fixed Charge Coverage Ratio for the Unsecured Lenders,
the Borrower will also maintain a Fixed Charge Coverage Ratio of not less than
1.20:1:00 as of the last day of each fiscal quarter of the Borrower. The Fixed
Charge Coverage Ratio shall be determined based on four of the previous five
fiscal quarters of the Borrower that occurred immediately prior to the
calculation date, at the Borrower's option.
10.6 OTHER FINANCIAL COVENANTS. The Borrower agrees that the foregoing
covenants shall be automatically modified to reflect the modification of any
similar financial covenant set forth in the documents between the Borrower and
Borrower' Unsecured Lenders, the effect of which is to cause said financial
covenants to be more restrictive than the financial covenants set forth herein.
11. EVENTS OF DEFAULT.
The Borrower, without notice or demand of any kind, shall be in default
under this Agreement upon the occurrence of any of the following events (each an
"Event of Default").
11.1 NONPAYMENT OF OBLIGATIONS. Any amount due and owing on the Note or
any of the Obligations, whether by its terms or as otherwise provided herein, is
not paid.
11.2 MISREPRESENTATION. Any written warranty, representation,
certificate or statement in this Agreement, the Loan Documents shall be false in
any material respect on the date when made.
11.3 NONPERFORMANCE. Any failure to perform or default in the
performance of any covenant, condition or agreement contained in this Agreement
and, if capable of being cured, such failure to perform or default in
performance continues for a period of thirty (30) days after the Borrower
receives notice or knowledge from the Bank of such failure to perform or default
in performance.
11.4 DEFAULT UNDER LOAN DOCUMENTS. A default under any of the other
Loan Documents, all of which covenants, conditions and agreements contained
therein are hereby incorporated in this Agreement by express reference, and such
failure to perform or default in performance continues beyond any applicable
grace or cure period, shall be and constitute an Event of Default under this
Agreement and any other of the Obligations.
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11.5 CHANGE IN CONTROL. A Change in Control shall occur.
11.6 DEFAULT UNDER OTHER AGREEMENTS. Failure of the Borrower or any of
its Subsidiaries to pay any Indebtedness (other than the Obligations) in an
aggregate principal amount of Two Million Dollars ($2,000,000.00), when due; or
the failure by the Borrower or any of its Subsidiaries to perform any term,
provision or condition contained in any agreement or agreements under which any
Indebtedness (other than the Obligations) in an aggregate principal amount of
Two Million Dollars ($2,000,000.00) was created or is governed, or any other
event shall occur or condition exist, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness in an aggregate principal
amount of Two Million Dollars ($2,000,000.00) to cause, such Indebtedness to
become due prior to its stated maturity; or any Indebtedness of the Borrower or
any of its Subsidiaries (other than the Obligations) in an aggregate principal
amount of Two Million Dollars ($2,000,000.00), shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled payment)
prior to the stated maturity thereof; or the Borrower or any of its Subsidiaries
shall not pay, or admit in writing its inability to pay, its debts generally as
they become due in an aggregate principal amount of Two Million Dollars
($2,000,000.00).
11.7 BANKRUPTCY. The Borrower or any of its Domestic Subsidiaries shall
(i) have an order for relief entered with respect to its under the Federal
bankruptcy laws as now or hereafter in effect, (ii) make an assignment for the
benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any substantial part of its property, (iv) institute any
proceeding seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate action to authorize or effect any of the foregoing
actions set forth in this Section 11.7 or (vi) fail to contest in good faith any
appointment or proceeding described in Section 11.8.
11.8 RECEIVERSHIP. Without the application, approval or consent of the
Borrower or any of its Domestic Subsidiaries, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or any of its
Domestic Subsidiaries or any substantial part of its property, or a proceeding
described in Section 11.7(iv) shall be instituted against the Borrower or any of
its Domestic Subsidiaries and such appointment continues undischarged or such
proceeding continues undismisssed or unstayed for a period of 30 consecutive
days.
11.9 ASSIGNMENT FOR CREDITORS. Any Foreign Subsidiary shall have taken
or instituted or permitted to be taken or instituted any action or proceeding,
or any such action or proceeding is instituted against such Foreign Subsidiary,
whereby a substantial amount of its property shall or may be assigned or in any
manner transferred or delivered to any receive, assignee, liquidator or other
Person, whether appointed by such Foreign Subsidiary or by a court or by any
governmental authority or any law, whereby such property shall or may be
distributed among the creditors of such Foreign Subsidiary, provided the
aggregate claims of all such creditors against such Foreign Subsidiary or
against all such Foreign Subsidiaries shall exceed $2,000,000 and such action or
proceeding remains undismissed or unstayed on appeal for a period of 90 days; or
28
any governmental authority having jurisdiction shall have taken or instituted
any action or proceeding for the dissolution or disestablishment of any Foreign
Subsidiary or for the suspension of its operations, provided the assets of any
such Foreign Subsidiary or the aggregate assets of all such Foreign Subsidiaries
shall exceed $2,000,000 and such action or proceeding remains undismissed or
unstayed on appeal for a period of 90 days; or all of the property of any
Foreign Subsidiary shall have been condemned, seized or appropriated, provided
the net assets of any such Foreign Subsidiary or the aggregate net assets of all
such Foreign Subsidiaries resulting from or the total of all claims against any
Foreign Subsidiary or all Foreign Subsidiaries resulting from any action or
proceeding described in this Section 11.9 and the amount of assets or net
assets, as the case may be, of any Foreign Subsidiary or all Foreign
Subsidiaries which are subject to any action, proceeding, condemnation, seizure
or appropriation described in this Section 11.9 shall exceed $2,000,000.
11.10 CONDEMNATION. Any court, governmental or governmental agency
shall condemn, seize or otherwise appropriate, or take custody or control of all
or any substantial portion of the property of the Borrower or any of its
Subsidiaries.
11.11 JUDGMENTS. The Borrower or any of its Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge any judgment or order for the
payment of money in excess of $2,000,000, which is not stayed on appeal or
otherwise being appropriately contested in good faith.
11.12 ERISA. The Unfunded Liabilities of all Single Employer Plans
shall exceed in the aggregate $10,000,000; or any Reportable Event shall occur
in connection with any Plan; or the Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred withdrawal liability to such Multiemployer Plan in an
amount which, when aggregated with all Unfunded Liabilities of all Single
Employer Plans and all other amounts required to be paid to Multiemployer Plans
by the Borrower or any other member of the Controlled Group as withdrawal
liability, exceeds $10,000,000.
11.13 VIOLATION OF LAW. Any court, governmental or governmental agency
shall find or hold, or formally notify the Borrower or any Subsidiary, that the
Borrower or any Subsidiary (i) has violated any Environmental Law, or (ii) bears
responsibility for any removal or remedial or similar action in connection with
the release of the Borrower or any other person of any Hazardous Materials into
the environment, or is otherwise liable in any manner in connection with any
such release; and such finding, holding or notification could reasonably be
expected (taking into account the expected outcome of any legal appeals
available to the Borrower or such Subsidiary, as well as the likelihood and
extent of contribution from any other persons who may be jointly and severally
liable with the Borrower or such Subsidiary) to have a Material Adverse Effect
on the ability of the Borrower to perform its obligations under the Loan
Documents.
12. REMEDIES.
Upon the occurrence of an Event of Default, the Bank shall have all
rights, powers and remedies set forth in the Loan Documents, in any written
agreement or instrument (other than this Agreement or the Loan Documents)
relating to any of the Obligations, or as otherwise
29
provided at law or in equity. Without limiting the generality of the foregoing,
the Bank may, at its option upon the occurrence of an Event of Default, declare
its commitments to the Borrower to be terminated and all Obligations to be
immediately due and payable, provided, however, that upon the occurrence of an
Event of Default under Section 11.9, "Assignment for Creditors", or Section
11.7, "Bankruptcy", all commitments of the Bank to the Borrower shall be
immediately terminated and all Obligations shall be automatically due and
payable, all without demand, notice or further action of any kind required on
the part of the Bank. The Borrower hereby waives any and all presentment,
demand, notice of dishonor, protest, and all other notices and demands in
connection with the enforcement of Bank's rights under the Loan Documents,
notwithstanding anything contained herein or in the Loan Documents to the
contrary. In addition to the foregoing:
12.1 OFFSET RIGHTS. In addition to, and without limitation of, any
rights of the Bank under applicable law, so long as any Event of Default has
occurred and is continuing, any indebtedness from the Bank to Borrower
(including account balances, whether provisional or final and whether or not
collected or available, hereinafter called "Accounts") may be offset and applied
toward the payment of the Obligations then due and owing to the Bank.
12.2 ADDITIONAL REMEDIES. The Bank shall have the right and power to:
(a) extend, renew or modify for one or more periods (whether
or not longer than the original period) the Note, any other of the
Obligations, any obligation of any nature of any other obligor with
respect to the Note or any of the Obligations;
(b) grant releases, compromises or indulgences with respect to
the Note, any of the Obligations, any extension or renewal of any of
the Obligations, any security therefor, or to any other obligor with
respect to the Note or any of the Obligations;
(c) transfer the whole or any part of securities which may
constitute Accounts into the name of the Bank or the Bank's nominee ,
and any corporation, association, or any of the managers or trustees of
any trust issuing any of said securities, or any transfer agent, shall
not be bound to inquire, in the event that the Bank or said nominee
makes any further transfer of said securities, or any portion thereof,
as to whether the Bank or such nominee has the right to make such
further transfer, and shall not be liable for transferring the same;
(d) make an election with respect to the Accounts or any other
from time to time collateral for any of the Obligations under Section
1111 of the Code or take action under Section 364 or any other section
of the Code; provided, however, that any such action of the Bank as set
forth herein shall not, in any manner whatsoever, impair or affect the
liability of the Borrower hereunder, nor prejudice, waive, nor be
construed to impair, affect, prejudice or waive the Bank's rights and
remedies at law, in equity or by statute, nor release, discharge, nor
be construed to release or discharge, the Borrower, any guarantor or
other person, firm, corporation or other entity liable to the Bank for
the Obligations; and
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(e) at any time, and from time to time, accept additions to,
releases, reductions, exchanges or substitution of the Accounts s,
without in any way altering, impairing, diminishing or affecting the
provisions of this Agreement, the Loan Documents, or any of the other
Obligations, or the Bank's rights hereunder, under the Note or under
any of the other Obligations.
The Borrower hereby ratifies and confirms whatever the Bank may do with respect
to the Accounts, and agrees that the Bank shall not be liable for any error of
judgment or mistakes of fact or law with respect to actions taken in connection
with the Accounts absent manifest error.
12.3 INTENTIONALLY OMITTED.
12.4 APPLICATION OF PROCEEDS. The Bank will within 3 Business Days
after receipt of cash or solvent credits from collection of items of payment,
proceeds of Accounts or any other source, apply the whole or any part thereof
against the Obligations secured hereby. The Bank shall further have the
exclusive right to determine how, when and what application of such payments and
such credits shall be made on the Obligations, and such determination shall be
conclusive upon the Borrower. Any proceeds of any disposition by the Bank of all
or any part of the Accounts may be first applied by the Bank to the payment of
expenses incurred by the Bank in connection with the Accounts, including
attorneys' fees and legal expenses as provided for in Section 13 hereof.
12.5 NO WAIVER. No Event of Default shall be waived by the Bank except
in writing. No failure or delay on the part of the Bank in exercising any right,
power or remedy hereunder shall operate as a waiver of the exercise of the same
or any other right at any other time; nor shall any single or partial exercise
of any such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy hereunder. There
shall be no obligation on the part of the Bank to exercise any remedy available
to the Bank in any order. The remedies provided for herein are cumulative and
not exclusive of any remedies provided at law or in equity. The Borrower agrees
that in the event that the Borrower fails to perform, observe or discharge any
of its Obligations or liabilities under this Agreement or any other agreements
with the Bank, no remedy of law will provide adequate relief to the Bank, and
further agrees that the Bank shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
13 MISCELLANEOUS.
13.1 OBLIGATIONS ABSOLUTE. None of the following shall affect the
Obligations of the Borrower to the Bank under this Agreement or the Bank's
rights with respect to any from time to time collateral for the Obligations:
(a) acceptance or retention by the Bank of other property or
any interest in property as security for the Obligations;
31
(b) release by the Bank of any guarantors of the Obligations
or of all or any part of any from time to time collateral for the
Obligations or of any party liable with respect to the Obligations;
(c) release, extension, renewal, modification or substitution
by the Bank of the Note, or any note evidencing any of the Obligations,
or the compromise of the liability of any guarantor of the Obligations;
or
(d) failure of the Bank to resort to any other security or to
pursue the Borrower or any other obligor liable for any of the
Obligations before resorting to remedies against any from time to time
collateral for the Obligations.
13.2 ENTIRE AGREEMENT. This Agreement (i) is valid, binding and
enforceable against the Borrower and the Bank in accordance with its provisions
and no conditions exist as to its legal effectiveness; (ii) constitutes the
entire agreement between the parties; and (iii) is the final expression of the
intentions of the Borrower and the Bank. No promises, either expressed or
implied, exist between the Borrower and the Bank, unless contained herein. This
Agreement supersedes all negotiations, representations, warranties, commitments,
offers, contracts (of any kind or nature, whether oral or written) prior to or
contemporaneous with the execution hereof.
13.3 AMENDMENTS; WAIVERS. No amendment, modification, termination,
discharge or waiver of any provision of this Agreement or of the Loan Documents,
or consent to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Bank, and then
such waiver or consent shall be effective only for the specific purpose for
which given.
13.4 WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, THE RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE NOTE OR ANY OF THE OTHER OBLIGATIONS, ANY
FROM TIME TO TIME COLLATERAL FOR THE OBLIGATIONS, OR ANY OTHER AGREEMENT
EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS AGREEMENT, OR
ANY COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE BANK AND THE BORROWER
ARE ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK
GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWER.
13.5 LITIGATION. TO INDUCE THE BANK TO MAKE THE LOANS, THE BORROWER AND
THE BANK IRREVOCABLY AGREES THAT ALL ACTIONS ARISING, DIRECTLY OR INDIRECTLY, AS
A RESULT OR CONSEQUENCE OF THIS AGREEMENT, OR THE NOTE, SHALL BE INSTITUTED AND
LITIGATED ONLY IN COURTS HAVING THEIR SITUS IN THE CITY OF CHICAGO, ILLINOIS.
THE BORROWER AND THE BANK HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND
VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS
32
SITUS IN SAID CITY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS. THE
BORROWER AND THE BANK HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO THE BORROWER OR THE BANK AS SET FORTH HEREIN IN
THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE.
13.6 ASSIGNABILITY. The Bank may at any time assign the Bank's rights
in this Agreement, the Note, the Obligations, or any part thereof. In addition,
the Bank may at any time sell one or more participations in the Loans. The
Borrower may not sell or assign this Agreement, or any portion thereof, either
voluntarily or by operation of law, without the prior written consent of the
Bank. This Agreement shall be binding upon the Bank and the Borrower and their
respective legal representatives and successors. All references herein to the
Borrower shall be deemed to include any successors, whether immediate or remote.
13.7 CONFIDENTIALITY. The Borrower and the Bank hereby agree and
acknowledge that any and all information relating to the Borrower which is (i)
furnished by the Borrower to the Bank (or to any affiliate of the Bank), and
(ii) non-public, confidential or proprietary in nature, shall be kept
confidential by the Bank or such affiliate in accordance with applicable law,
provided, however, that such information and other credit information relating
to the Borrower may be distributed by the Bank or such affiliate to the Bank's
or such affiliate's directors, officers, employees, attorneys, affiliates,
auditors and regulators, who have a need to know, and upon the order of a court
or other governmental agency having jurisdiction over the Bank or such
affiliate, to any other party. The Borrower and the Bank further agree that this
provision shall survive the termination of this Agreement.
13.8 BINDING EFFECT. This Agreement shall become effective upon
execution by the Borrower and the Bank. If this Agreement is not dated or
contains any blanks when executed by the Borrower, the Bank is hereby
authorized, without notice to the Borrower, to date this Agreement as of the
date when it was executed by the Borrower, and to complete any such blanks
according to the terms upon which this Agreement is executed.
13.9 GOVERNING LAW. This Agreement, the Loan Documents and the Note
shall be delivered and accepted in and shall be deemed to be contracts made
under and governed by the internal laws of the State of Illinois (but giving
effect to federal laws applicable to national banks), and for all purposes shall
be construed in accordance with the laws of such State, without giving effect to
the choice of law provisions of such State.
13.10 ENFORCEABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by,
unenforceable or invalid under any jurisdiction, such provision shall as to such
jurisdiction, be severable and be ineffective to the extent of such prohibition
or invalidity, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
33
13.11 SURVIVAL OF BORROWER REPRESENTATIONS. All covenants, agreements,
representations and warranties made by the Borrower herein shall,
notwithstanding any investigation by the Bank, be deemed material and relied
upon by the Bank and shall survive the making and execution of this Agreement
and the Loan Documents and the issuance of the Note, and shall be deemed to be
continuing representations and warranties until such time as the Borrower has
fulfilled all of its Obligations to the Bank, and the Bank has been paid in
full. The Bank, in extending financial accommodations to the Borrower, is
expressly acting and relying on the aforesaid representations and warranties.
13.12 EXTENSIONS OF BANK'S COMMITMENT AND NOTE. This Agreement shall
secure and govern the terms of any extensions or renewals of the Bank's
commitment hereunder and the Note pursuant to the execution of any modification,
extension or renewal note executed by the Borrower and accepted by the Bank in
its sole and absolute discretion in substitution for the Note.
13.13 TIME OF ESSENCE. Time is of the essence in making payments of all
amounts due the Bank under this Agreement and in the performance and observance
by the Borrower of each covenant, agreement, provision and term of this
Agreement.
13.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute one and the same instrument.
13.15 FACSIMILE SIGNATURES. The Bank is hereby authorized to rely upon
and accept as an original any Loan Documents or other communication which is
sent to the Bank by facsimile, telegraphic or other electronic transmission
(each, a "Communication") which the Bank in good faith believes has been signed
by Borrower and has been delivered to the Bank by a properly authorized
representative of the Borrower, whether or not that is in fact the case.
Notwithstanding the foregoing, the Bank shall not be obligated to accept any
such Communication as an original and may in any instance require that an
original document be submitted to the Bank in lieu of, or in addition to, any
such Communication.
13.16 NOTICES. Except as otherwise provided herein, the Borrower waives
all notices and demands in connection with the enforcement of the Bank's rights
hereunder. All notices, requests, demands and other communications provided for
hereunder shall be in writing, sent by certified or registered mail, postage
prepaid, by facsimile, telegram or delivered in person, and addressed as
follows:
If to the Borrower: AAR CORP.
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Vice President and
Chief Financial Officer
34
If to the Bank: LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Carbon
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this subsection. No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances.
13.17 EXPENSES; INDEMNIFICATION. The Borrower shall reimburse the Bank
for any and all reasonable costs and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Bank, which attorneys may
be employees of the Bank) paid or incurred by the Bank in connection with the
preparation, negotiation, execution ,delivery, review, amendment, modification,
and administration of the Loan Documents. The Borrower also agrees to reimburse
the Bank for any and all reasonable costs and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Bank, which attorneys may
be employees of the Bank) paid or incurred by the Bank in connection with the
collection and enforcement of the Loan Documents. The Borrower further agrees to
indemnify the Bank, its directors, officers and employees against all losses,
claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation therefor whether
or not the Bank is a party thereto) which any of them may pay or incur arising
out of any term or condition contained in this Agreement or the other Loan
Documents, or the direct or indirect application or proposed application of the
proceeds of any Advance hereunder, except to the extent any of the foregoing
arising solely from the gross negligence or willful misconduct of the party
requesting indemnification. The obligations of the Borrower under this Section
shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the Borrower and the Bank have executed this
Revolving Loan Agreement as of the date first above written.
AAR CORP
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Title: Vice President and Chief
----------------------------------
Financial Officer
----------------------------------
Agreed and accepted:
LASALLE BANK NATIONAL ASSOCIATION
35
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
-----------------------------------
Title: Senior Vice President
----------------------------------
36
EXHIBIT "A"
REVOLVING NOTE
No. _______________
$25,000,000.00 Date: as of April __, 2001
Chicago, Illinois Due Date: April __, 2002
FOR VALUE RECEIVED, AAR CORP., a Delaware corporation (the "Borrower"),
whose address is 0000 Xxxxx Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxx 00000, promises
to pay to the order of LASALLE BANK NATIONAL ASSOCIATION, a national banking
association (hereinafter, together with any holder hereof, called the "Bank"),
at its office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, on or before
April __, 2002 (the "Maturity Date"), the lesser of (i) the principal sum of
TWENTY-FIVE MILLION and 00/100 DOLLARS ($25,000,000.00), or (ii) the aggregate
principal amount of all Loans outstanding under and pursuant to that certain
Revolving Loan Agreement dated as of April __, 2001 between the Borrower and the
Bank, as amended from time to time (as amended, supplemented or modified from
time to time, the "Loan Agreement"), and made available by the Bank to the
Borrower at the maturity or maturities and in the amount or amounts stated on
the records of the Bank, together with interest (computed on the actual number
of days elapsed on the basis of a 360 day year) as herein after provided on the
aggregate principal amount of all Revolving Loans outstanding from time to time
hereunder from the date hereof through and including the Maturity Date.
Capitalized words and phrases not otherwise defined herein shall have the
meanings assigned thereto in the Loan Agreement.
The unpaid principal amount hereof shall bear interest as provided for
in the Loan Agreement. Interest after maturity (whether by reason of
acceleration or otherwise) on the unpaid principal balance of this Revolving
Note (the "Note") and all accrued and unpaid interest hereon, shall accrue at a
floating per annum rate of interest equal to the Default Rate and shall be
payable on demand from the Bank.
All Loans shall be repaid by the Borrower on the Maturity Date, unless
payable sooner pursuant to the provisions of the Loan Agreement. In the event
the aggregate outstanding principal balance of all Loans exceeds the Revolving
Loan Commitment, the Borrower shall, without notice or demand of any kind,
immediately make such repayments of the Revolving Loans or take such other
actions as shall be necessary to eliminate such excess.
Principal and interest shall be paid to the Bank at its address set
forth above, or at such other place as the holder of this Note shall designate
in writing to the Borrower.
This Note evidences the Revolving Loans and other indebtedness incurred
by the Borrower under and pursuant to the Loan Agreement, to which reference is
hereby made for a statement of the terms and conditions under which the Maturity
Date or any payment hereon may be accelerated. The holder of this Note is
entitled to all of the benefits and security provided for in the Loan Agreement.
37
Except for such notices as may be required under the terms of the Loan
Agreement, the Borrower waives presentment, demand, notice, protest, and all
other demands, or notices, in connection with the delivery, acceptance,
performance, default, or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence.
THE BANK AND THE BORROWER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE IRREVOCABLY, THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL
PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN
AGREEMENT, THIS NOTE OR ANY OF THE OBLIGATIONS, THE COLLATERAL, OR ANY OTHER
AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THE LOAN
AGREEMENT, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE BANK AND
THE BORROWER ARE ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE BANK GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWER.
TO INDUCE THE BANK TO MAKE THE LOANS, THE BORROWER AND THE BANK
IRREVOCABLY AGREES THAT ALL ACTIONS ARISING, DIRECTLY OR INDIRECTLY, AS A RESULT
OR CONSEQUENCE OF THE LOAN AGREEMENT, OR THIS NOTE, SHALL BE INSTITUTED AND
LITIGATED ONLY IN COURTS HAVING SITUS IN THE CITY OF CHICAGO, ILLINOIS. THE
BORROWER AND THE BANK HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF
ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN SAID CITY AND WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS. THE BORROWER AND THE BANK HEREBY WAIVE
PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE
BORROWER OR THE BANK IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF
COURT OR OTHERWISE.
The Revolving Loans evidenced hereby have been made and/or issued and
this Note has been delivered at the Bank's main office. This Note shall be
governed and construed in accordance with the laws of the State of Illinois, in
which state it shall be performed, and shall be binding upon the Borrower, and
its legal representatives, successors, and assigns. Wherever possible, each
provision of the Loan Agreement and this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Loan Agreement or this Note shall be prohibited by or be invalid under
such law, such provision shall be severable, and be ineffective to the extent of
such prohibition or invalidity, without invalidating the remaining provisions of
the Loan Agreement or this Note.
As used herein, all provisions shall include the masculine, feminine,
neuter, singular and plural thereof, wherever the context and facts require such
construction and in particular the word "Borrower" shall be so construed.
38
IN WITNESS WHEREOF, the Borrower has executed this Revolving Note as of
the date set forth above.
AAR CORP.
By:
-------------------------------------
Its:
------------------------------------
Attention: Xxxxxxx X. Xxxxxxxxx
0000 Xxxxx Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxx 00000
39
EXHIBIT "B"
BORROWING NOTICE
_______________, 2001
To: LaSalle Bank National Association
Re: Borrowing Notice
Ladies and Gentlemen:
We make reference to that certain Revolving Loan Agreement dated as of
April __, 2001, between AAR Corp. and LaSalle Bank National Association, as it
may from time to time be amended, modified, renewed or extended (the "Loan
Agreement"). All capitalized terms used herein shall have the meanings
attributed to them in the Loan Agreement.
The Borrower hereby gives irrevocable notice pursuant to Section 5 of
the Loan Agreement for the following Advance(s):
Borrowing Date: _______________, 2001(1)
Principal Amount(2) Type of Advance(3) Interest Period(4)
------------------- ------------------ ------------------
Sincerely yours,
AAR CORP.
By:
-------------------------------------
Title:
-------------------------------------
--------
(1) Borrowing Date must be a Business Day prior to or on the Maturity Date.
(2) Subject to the minimum amount requirements set forth in Section 5.
(3) Specify Prime or LIBOR.
(4) Applicable to LIBOR only. See definition of Interest Period and Section 5
(Restrictions on Interest Periods).
40
