SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) DECEMBER 17, 1998
AVIATION SALES COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 1-11775 65-0665658
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
6905 NW 25TH STREET, MIAMI, FL 33122
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (305) 592-4055
N/A
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(FORMER NAME OR FORMER ADDRESS; IF CHANGED SINCE LAST REPORT)
Page 1 of 9 pages.
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ITEM 5. OTHER EVENTS.
GROUND BREAKING FOR NEW CORPORATE HEADQUARTERS AND CENTRAL WAREHOUSE FACILITY
On January 4, 1999, the ground breaking for the construction of the
Company's new corporate headquarters and warehouse facility (the "New Facility")
took place. The New Facility, which will be located on a 41 acre parcel in the
City of Miramar, Florida, will contain approximately 630,000 square feet of
space and consist of two buildings. One building, which will contain
approximately 545,000 square feet, will consolidate the operations of the
Company's aircraft spare parts redistribution business, as well as serve as the
corporate headquarters for the Company's distribution services, maintenance,
repair and overhaul ("MR&O"), leasing and manufacturing businesses. The other
building, which will contain approximately 85,000 square feet, will be used as
office and warehouse space by the Company's subsidiary, Caribe Aviation, Inc.
DEVELOPMENT AND LEASING OF THE NEW FACILITY
On December 17, 1998, the Company entered into a tax retention
operating lease for the New Facility (the "Lease") with First Security Bank,
National Association, as trustee (the "Trustee") of the Aviation Sales Trust
1998-1 (the "Trust"), as lessor. The Lease has an initial term of five years and
is a triple net lease with annual rent as provided in the Lease. The Lease
contains certain financial covenants regarding the financial performance of the
Company and certain other affirmative and negative covenants which the Company
will be obligated to comply with during the term of the Lease. Substantially all
of the Company's subsidiaries have guaranteed the Company's obligations under
the Lease. Additionally, the Company has an option to acquire the New Facility
at the end of the Lease for an option price as determined in the Lease.
Alternatively, if the Company does not purchase the New Facility at the end of
the Lease, the Company will be obligated to pay certain amounts as provided in
the Lease.
The development of the New Facility has been financed through a $34.4
million operating lease facility provided by a syndicate of financial
institutions (the "TROL Financing"). Pursuant to the TROL Financing documents,
the Company is obligated to develop the New Facility on behalf of the Trust and
is responsible for the timely completion thereof within an established
construction budget. The Company and substantially all of its subsidiaries have
guaranteed the repayment of $31.2 million of the Trustee's obligations under a
credit agreement with certain lenders (the "Credit Agreement"). The Trust's
obligations under the Credit Agreement are secured by a lien on the real
property and improvements comprising the New Facility and on the fixtures
therein. Further, the Company has posted an irrevocable letter of credit in
favor of the Trustee in the amount of approximately $8.0 million to secure
both the Company's obligations under the Lease and the Trustee's obligations
under the Credit Agreement.
The foregoing is a summary of certain information contained in the
above-referenced documents. Reference is made to the more detailed information
contained in such documents which are attached hereto as Exhibits 10.1-10.5.
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AMENDMENT TO THE COMPANY'S SENIOR CREDIT FACILITY
On December 15, 1998, the Company entered into an agreement amending
its existing senior credit facility pursuant to the terms of an Amendment No. 4
and Consent to Third Amended and Restated Credit Agreement dated as of October
17, 1997 (the "Fourth Amendment to Credit Facility Agreement"). Under the terms
of the Fourth Amendment to Credit Facility Agreement, the Company's existing
credit facility was amended to allow for the TROL Financing and to make other
non-substantive changes to the Company's amended credit facility.
The foregoing is a summary of certain information contained in the
above-referenced document. Reference is made to the more detailed information
contained in such document, which is attached hereto as Exhibit 10.6.
IMPACT OF THE YEAR 2000
Over the last year, the Company has been implementing new management
information ("MIS") systems in order to both allow that the Company's computer
systems, which are an important component of its businesses, to meet the
Company's needs into the foreseeable future and to mitigate the Year 2000 issues
which the Company's management believes could be inherent in the Company's
existing MIS systems. The Company has also grown rapidly over the last year, and
particularly over the last six months, and has expanded its operations beyond
the redistribution of aircraft spare parts into the MR&O of aircraft and
aircraft components and into the manufacturing of aircraft parts for sale to
original equipment manufacturers. Due to its rapid expansion, the Company
recently commenced an assessment of the MIS requirements in all of its
businesses.
The Year 2000 issue is the potential for system and processing failures
of date-related data and the result of computer-controlled systems using two
digits rather than four to define the applicable year. The Company may be
affected by Year 2000 issues in its own non-compliant information technology
("IT") systems or non-IT systems, as well as by Year 2000 issues related to
non-compliant IT and non-IT systems operated by third parties.
The following discussion contains forward-looking statements, which are
based upon the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the control of the Company. Should one
or more of these risks or uncertainties materialize, or should the assumptions
underlying these forward looking statements prove incorrect, actual results
could differ significantly and adversely from the results expressed or implied
in these forward looking
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statements. The Company does not undertake any obligation to revise these
forward looking statements to reflect future events or circumstances. See also
the cautionary statements contained in the MD & A section of the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.
STATE OF READINESS
The Company has substantially completed an assessment of its internal
and external (third-party) IT systems and non-IT systems. At this point in its
assessment, which the Company believes is approximately 75% complete (in the
aggregate), other than as described herein, the Company is not currently aware
of any Year 2000 problems relating to its systems or the systems operated by
third parties which would have a material effect on the Company's business,
results of operations or financial condition, without taking into account the
Company's efforts to avoid such problems, although there can be no assurance
thereof. In addition, the Company believes that it is approximately 25% and
15% complete (in the aggregate), respectively, with its Year 2000 remediation
and validation.
The Company's IT systems consist of software licensed from third
parties and hardware purchased or leased from vendors. The Company is currently
implementing new MIS systems, which are primarily designed to service the
Company's distribution services and manufacturing businesses, including new
software and hardware, which management believes that, once fully implemented,
will be Year 2000 compliant and will meet the requirements of the Company's
distribution services and manufacturing businesses into the foreseeable future.
The Company anticipates the systems for each of the distribution services
operations and the manufacturing operations will be substantially implemented by
the end of the third quarter of 1999, although there can be no assurance
thereof.
The Company has determined that the MIS system which is currently being
used by its distribution services business is not Year 2000 compliant. If the
implementation of the Company's new MIS system is delayed for any reason beyond
April 1999, the Company may decide to modify its existing MIS system to make it
Year 2000 compliant. The Company believes that such modifications would need to
commence no later than July 1999 for the Company to be in a position to
implement, remediate and validate its existing system, as modified, for Year
2000 compliance prior to January 1, 2000. While the Company has been informed by
its vendors that its existing MIS system can be brought into Year 2000
compliance on a timely basis, there can be no assurance of this fact.
To date, the Company has determined that some of the MIS systems which
are currently being used by its MR&O businesses are not Year 2000 compliant.
Excluding its TIMCO Greensboro, Lake City and Macon facilities, the Company has
substantially completed its assessment of the hardware and software being used
by its non-heavy maintenance MR&O operations and believes that such systems can
be made Year 2000 compliant by the end of 1999. The Company is still in the
process of conducting an assessment of the Year 2000 compliance of the hardware
and software systems for its TIMCO Greensboro, Lake City and Macon facilities,
which were acquired in 1998. Until such time
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as the Company substantially completes such assessment, the Company is unable to
determine the scope of remediation and validation work associated with the IT
and non-IT systems at such facilities.
The Company has also determined that its MIS systems which are being
used by its manufacturing business are not Year 2000 compliant. The Company has
substantially completed its assessment of the hardware and software being used
by its manufacturing operations and believes that such systems can be made Year
2000 compliant either through replacement of the MIS systems or remediation of
the existing hardware and software of its various manufacturing operations. It
expects to complete such changes prior to the end of 1999.
Excluding its TIMCO Greensboro, Lake City and Macon facilities, the
Company has further substantially completed an assessment of its non-IT systems
which the Company has identified as containing embedded chip systems for Year
2000 issues. At this point in its assessment, the Company is not currently aware
of any Year 2000 problems relating to these systems which would have a material
effect on the Company's business, results of operations, or financial condition,
without taking into account the Company's efforts to avoid such problems.
Additionally, the Company is reviewing the efforts of its vendors and
customers to become Year 2000 compliant. Letters and questionnaires have been or
are in the process of being sent to all critical entities with which the Company
does business to assess their Year 2000 readiness. To date, the Company has
received responses from approximately 40% of such third parties, and
approximately 60% of the companies that have responded have provided assurances
to the Company that they have already addressed, or that they will address on a
timely basis, all of their known significant Year 2000 issues. The Company
anticipates that these activities will be on-going for all of 1999 and will
include follow-up telephone interviews, correspondence and on-site meetings as
considered necessary in the circumstances. Although this review is continuing,
the Company is not currently aware of any vendor or customer circumstances that
may have a material adverse impact on the Company. The Company will seek
alternative suppliers if circumstances warrant. The Company can provide no
assurance that Year 2000 compliance plans of its vendors and customers will be
completed on a timely manner.
In that regard, the Company believes that issues relating to the Year
2000 compliance of aircraft spare parts in its inventory, if any, will
ultimately be the responsibility of the manufacturers of such parts, although
there can be no assurance. Further, it is unclear whether the Company's product
liability insurance would ultimately cover a claim based upon a Year 2000
problem in a part sold by the Company.
The Company's IT systems and other business resources rely on IT
systems and non-IT systems provided by service providers and therefore may be
vulnerable to those service providers' failure to remediate their own Year 2000
issues. Such service providers include those for the Company's network and
e-mail services and landlords for the Company's currently occupied leased office
spaces. The Company has contacted these principal service providers and has been
notified that the IT and non-IT systems which they provide to the Company are
Year 2000 compliant.
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COSTS
The Company believes that the cost of the new MIS system (i) for its
distribution services business will be approximately $13.5 million, of which
approximately $4.8 million has been expended to date and approximately $8.7
million of which it believes will be expended during 1999 and (ii) for its
manufacturing business will be approximately $2.1 million of which approximately
$947,000 has been spent to date and approximately $1.15 million will be expended
during 1999. At present, the Company is in the early stages of assessing the
Year 2000 compliance of its TIMCO Greensboro, Lake City and Macon facilities.
Until such assessment is substantially complete, the Company does not believe it
will be in a position to estimate the Year 2000 compliance costs for its MR&O
business. The costs of the Company's new MIS systems are being funded from the
Company's existing lines of credit. The $4.8 million and $976,000, respectively,
spent to date has related substantially to the cost of the new MIS systems and
not to bringing the Company's existing MIS systems into Year 2000 compliance.
Such cost estimates include both hardware and software costs, as well as the
anticipated costs of the use of consultant services, but do not include Company
internal costs associated with such efforts, which are not separately tracked
for Year 2000 compliance efforts. Such internal costs principally consist of the
payroll costs for Company employees working on such compliance efforts.
If the Company determines that due to delays in the implementation of
its new MIS system for its distribution services business, it is in the
Company's best interest to update its existing MIS system for such business to
make it Year 2000 compliant, so that such system remains available for use in
the Company's business until the new MIS system for business becomes
operational, the cost of such update is expected to be approximately $3.5
million. Such cost, if incurred, would be in addition to the costs associated
with the development and implementation of the new MIS system for its
distribution services business as described above, and would not be recoverable
in connection with the development and implementation of the new MIS system for
such business.
RISKS RELATING TO THE COMPANY'S FAILURE TO BECOME YEAR 2000 COMPLIANT
To the extent that the Company's assessment is finalized without
identifying any additional material non-compliant IT systems operated by the
Company or by third parties, the most reasonably likely worst case Year 2000
scenario is that the Company will have to bring its existing MIS systems into
Year 2000 compliance; provided, however, that while the Company believes based
upon its assessments that its existing systems can be made Year 2000 compliant
prior to December 31, 1999, there can be no assurance of this fact. The Company
believes that it will be able to either bring its new MIS systems substantially
into operation or bring its existing systems into Year 2000 compliance by the
end of 1999, although there can be no assurance.
The Company's failure to bring either its new MIS systems into
operation or bring its existing MIS systems into Year 2000 compliance by the end
of 1999 would likely have a material adverse effect on the Company, in that it
would make it very difficult for the Company to operate its business in the
ordinary course and would likely cause the Company to lose revenues, have
increased operating
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costs and have business interruptions of a material nature (which would likely
not be covered by the Company's existing business interruption insurance) until
such systems were in place. In addition, there can be no assurance that the Year
2000 issues of other entities will not have a material adverse impact on the
Company's systems or results of operations.
CONTINGENCY PLANS
As discussed above, the Company is engaged in an ongoing Year 2000
assessment in order to determine the operational problems and costs (including
loss of revenues) that would be reasonably likely to result from the failure by
the Company and certain third parties to complete efforts necessary to achieve
Year 2000 compliance on a timely basis. The Company is currently continuing to
develop its new MIS systems for its distribution services business, and hopes to
be in a position by March 1999 to determine whether such system will be far
enough along in its development so that it can be made operational prior to the
end of 1999. Alternatively, unless by the end of April 1999 the Company has
determined that it is reasonably likely that it will be in a position to bring
its new MIS system for its distribution services business into operation prior
to the end of the year, the Company will likely opt to expend the costs
associated with bringing the Company's existing MIS system for its distribution
services business into Year 2000 compliance.
The Company is currently considering what its contingency plans will be
in the event that the Company is not able to bring its existing MIS systems for
its TIMCO Greensboro, Lake City and Macon facilities into Year 2000 compliance
by the end of 1999. The Company currently plans to complete such contingency
plans by the end of March 1999.
FILING OF PAINEWEBBER LAWSUIT
On January 8, 1999, PaineWebber Incorporated ("PaineWebber") filed in
the Supreme Court of the State of New York a complaint against the Company and
its subsidiary, Whitehall Corporation ("Whitehall") alleging breach of contract
claims and related claims against the Company and Whitehall and a tortious
interference with a contract claim against the Company in connection with the
Company's acquisition of TIMCO in September 1998. These claims primarily arose
based upon a 1997 agreement between Whitehall and PaineWebber relating to
certain investment banking services to be provided to Whitehall by PaineWebber
in connection with a proposed acquisition of TIMCO by Whitehall. PaineWebber is
seeking damages of approximately $1.0 million, plus costs, payment of
approximately $250,000 allegedly due relating to the failure of Whitehall to
honor an alleged right of first refusal in the 1997 agreement, and an unstated
amount of punitive damages.
The Company believes that its acquisition of TIMCO was not within the
scope of the PaineWebber/Whitehall agreement and that claims brought under this
agreement against the Company and Whitehall are without merit. The Company
intends to vigorously defend these claims. Although no assurance can be given,
the Company believes that the ultimate outcome of this matter will not have a
material adverse effect on the financial condition of the Company.
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ITEM 7. EXHIBITS.
(a) Exhibits.
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NUMBER
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10.1 Credit Agreement dated as of December 17, 1998
among First Security Bank, National Association,
as owner trustee for the Aviation Sales Trust
1998-1, as lessor, NationsBank, National
Association, as administrative agent, and the
several lenders parties thereto.
10.2 Lease Agreement dated as of December 17, 1998
between First Security Bank, National Association,
as owner trustee under Aviation Sales Trust
1998-1, as lessor, and the Company, as lessee.
10.3 Guaranty Agreement (Series A Obligations) between
the Company, substantially all of its subsidiaries
and NationsBank, National Association, as agent
for the Series A lenders, dated as of December 17,
1998.
10.4 Guaranty Agreement (Lease Obligations) between
substantially all of the subsidiaries of the
Company and First Security Bank, National
Association, as owner trustee for the Aviation
Sales Trust 1998-1, dated as of December 17, 1998.
10.5 Participation Agreement between the Company as
Construction Agent and Leases, First Security Bank,
National Association, as Owner Trustee, the Various
Banks and other lending institutions as the holders and
lenders, and NationsBank, National Association, as
Administrative Agent, dated as of December 17, 1998.
10.6 Amendment No. 4 and Consent, dated December 15,
1998, to Third Amended and Restated Credit Agreement.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized, this 8th day of February, 1999.
AVIATION SALES COMPANY
By: /s/ DALE S. BAKER
--------------------------------------------
Dale S. Baker, President and CEO
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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10.1 Credit Agreement dated as of December 17, 1998
among First Security Bank, National Association,
as owner trustee for the Aviation Sales Trust
1998-1, as lessor, NationsBank, National
Association, as administrative agent, and the
several lenders parties thereto.
10.2 Lease Agreement dated as of December 17, 1998
between First Security Bank, National Association,
as owner trustee under Aviation Sales Trust
1998-1, as lessor, and the Company, as lessee.
10.3 Guaranty Agreement (Series A Obligations) between
the Company, substantially all of its subsidiaries
and NationsBank, National Association, as agent
for the Series A lenders, dated as of December 17,
1998.
10.4 Guaranty Agreement (Lease Obligations) between
substantially all of the subsidiaries of the
Company and First Security Bank, National
Association, as owner trustee for the Aviation
Sales Trust 1998-1, dated as of December 17, 1998.
10.5 Participation Agreement between the Company as
Construction Agent and Leases, First Security Bank,
National Association, as Owner Trustee, the Various
Banks and other lending institutions as the holders and
lenders, and NationsBank, National Association, as
Administrative Agent, dated as of December 17, 1998.
10.6 Amendment No. 4 and Consent, dated December 15,
1998, to Third Amended and Restated Credit Agreement.
EXHIBIT 10.1
CREDIT AGREEMENT
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as
expressly stated herein,
but solely as Owner Trustee
for the Aviation Sales Trust 1998-1,
as Borrower,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
as Lenders,
and
NATIONSBANK, NATIONAL ASSOCIATION
as Administrative Agent for the Lenders
Dated as of December 17, 1998
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS.........................................................1
1.1. Definitional Provisions...................................1
1.2. Defined Terms.............................................1
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.....................................2
2.1. Commitments...............................................2
2.2. Notes.....................................................2
2.3. Procedure for Borrowing; Amounts of Borrowings............2
2.4. Unused Fees...............................................4
2.5. Termination, Reduction or Extension of Commitments........4
2.6. Prepayments and Payments..................................4
2.7. Conversion and Continuation Options.......................5
2.8. Interest Rates and Payment Dates..........................6
2.9. Computation of Interest...................................7
2.10. Pro Rata Treatment and Payments...........................7
2.11. Change in Circumstances...................................8
2.12. Compensation.............................................11
2.13. Taxes....................................................11
SECTION 3. REPRESENTATIONS AND WARRANTIES.....................................13
3.1. Due Organization, etc....................................13
3.2. Authorization; No Conflict...............................14
3.3. Enforceability, etc......................................14
3.4. Litigation...............................................14
3.5. Lessor Liens.............................................14
3.6. Assignment...............................................15
3.7. Defaults.................................................15
3.8. Documentation............................................15
3.9. Use of Proceeds..........................................15
3.10. Securities Act...........................................15
3.11. Chief Place of Business..................................15
3.12. Federal Reserve Regulations..............................15
3.13. Investment Company Act...................................15
SECTION 4. CONDITIONS PRECEDENT...............................................16
4.1. Conditions to Effectiveness..............................16
4.2. Conditions to Each Loan..................................16
SECTION 5. COVENANTS..........................................................16
5.1. Other Activities.........................................16
5.2. Ownership of Properties; Indebtedness....................17
5.3. Disposition of Assets....................................17
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5.4. Compliance with Operative Agreements.....................17
5.5. Further Assurances.......................................17
5.6. Notices..................................................17
5.7. Discharge of Liens.......................................17
5.8. Trust Agreement..........................................18
SECTION 6. EVENTS OF DEFAULT..................................................18
SECTION 7. THE ADMINISTRATIVE AGENT...........................................21
7.1. Appointment; Powers, and Immunities......................21
7.2. Delegation of Duties.....................................21
7.3. [Reserved]...............................................21
7.4. Reliance by Administrative Agent.........................21
7.5. Notice of Default........................................22
7.6. Non-Reliance on Administrative Agent and Other Lenders...22
7.7. Indemnification..........................................22
7.8. Rights as Lender.........................................23
7.9. Resignation of Administrative Agent......................23
SECTION 8. MATTERS RELATING TO PAYMENT AND COLLATERAL.........................24
8.1. Collection of Payments and Other Amounts.................24
8.2. Certain Remedial Matters.................................26
8.3. Release of Properties, etc...............................26
8.4. Excepted Payments........................................26
SECTION 9. MISCELLANEOUS......................................................26
9.1. Amendments and Waivers...................................26
9.2. Notices..................................................27
9.3. No Waiver; Cumulative Remedies...........................28
9.4. Survival of Representations and Warranties...............28
9.5. Payment of Expenses and Taxes............................29
9.6. Successors and Assigns; Participations and Assignments...29
9.7. Participations...........................................29
9.8. Assignments; Additional Commitment.......................29
9.9. The Register; Disclosure.................................32
9.10. Adjustments; Set-off.....................................32
9.11. Counterparts.............................................33
9.12. Severability.............................................33
9.13. Integration..............................................33
9.14. GOVERNING LAW............................................33
9.15. Submission To Jurisdiction; Waivers......................33
9.16. Acknowledgments..........................................34
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9.17. WAIVERS OF JURY TRIAL....................................34
9.18. Nonrecourse..............................................34
9.19. Usury Savings Clause.....................................35
Schedule 1.2
Exhibit A SERIES A NOTE
Exhibit B SERIES B NOTE
Exhibit C ASSIGNMENT AND ACCEPTANCE
SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE RELATING TO THE CREDIT
AGREEMENT
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 17, 1998, is among FIRST
SECURITY BANK, NATIONAL ASSOCIATION, not individually, except as expressly
stated herein, but solely as Owner Trustee for the Aviation Sales Trust 1998-1
(the "Owner Trustee" or the "Borrower"), the several banks and other financial
institutions from time to time parties to this Agreement (the "Lenders"), and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association, as Lender and
as Administrative Agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1. DEFINITIONAL PROVISIONS.
(a) Unless otherwise defined therein, all terms defined in
this Agreement shall have such defined meanings when used in the other
Credit Documents or any certificate or other document made or delivered
pursuant hereto or thereto.
(b) 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 Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) All accounting terms used herein shall have the
respective meanings given to them in accordance with GAAP, unless
otherwise provided herein. All computations and determinations for
purposes of determining compliance with the financial requirements of
this Agreement shall be made in accordance with GAAP, unless otherwise
provided herein.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms or such terms.
1.2. DEFINED TERMS. Each capitalized term used in this Agreement and
not otherwise defined herein shall have the meaning ascribed thereto in Appendix
A to the Participation Agreement (defined below).
(a) "AGREEMENT" shall mean this Credit Agreement, as
amended, supplemented, restated or otherwise modified from time to time
in accordance with the terms hereof.
(b) "PARTICIPATION AGREEMENT" means the Participation
Agreement dated as of the date hereof among Aviation Sales Company, as
Construction Agent and as Lessee, the Owner Trustee, the Holders party
thereto from time to time, the Lenders party thereto from time to time,
and NationsBank, National Association, as Administrative Agent, as such
agreement may be amended, modified, restated or supplemented from time
to time in accordance with the terms thereof.
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SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1. COMMITMENTS.
(a) Subject to the terms and conditions hereof, each Lender
severally agrees to make Series A Loans and Series B Loans to the
Borrower from time to time during the Commitment Period for the purpose
of enabling the Borrower to purchase the Properties and to pay Property
Acquisition Costs, Property Costs and Transaction Expenses, in an
aggregate principal amount as to each Category of Loans at any one time
outstanding not to exceed such Lender's Commitment applicable to such
Category of Loans; PROVIDED that (i) after giving effect to any Loan,
the aggregate outstanding principal amount of all Loans of a specified
Category shall not exceed the Total Commitment for such Category, and
(ii) all borrowings under this SECTION 2.1(A), when aggregated with
corresponding Holder Fundings, shall be allocated as follows: Series A
Loans--88%; Series B Loans--9%; and Holder Fundings--3%.
(b) The Loans may be Base Rate Loans or Eurodollar Loans
having an Interest Period of one, two, three or six months, as
specified in the definition of "Interest Period," subject only to the
limitations specified in such definition and to the provisions of
SECTIONS 2.7, 2.9(C) AND 2.11. Any Loan other than a Eurodollar Loan
shall constitute a Base Rate Loan.
2.2. NOTES. The Loans made by each Lender shall be evidenced by (i) in
the case of Series A Loans, a promissory note of the Borrower, substantially in
the form of EXHIBIT A (the "Series A Note"), and (ii) in the case of Series B
Loans, a promissory note of the Borrower, substantially in the form of EXHIBIT B
(the "Series B Note" and together with the Series A Notes, the "Notes"), in each
case with appropriate insertions as to payee, date and principal amount, payable
to the order of such Lender and in a principal amount equal to the applicable
Commitment of such Lender. Each Lender is hereby authorized to record the date,
Type and amount of each Loan made by such Lender, each continuation thereof,
each conversion of all or a portion thereof to another Type, and the date and
amount of each payment or prepayment of principal thereof on the schedule
annexed to and constituting a part of any of its Notes, and any such recordation
shall constitute PRIMA FACIE evidence of the accuracy of the information so
recorded, PROVIDED that the failure to make any such recordation or any error in
such recordation shall not affect the Borrower's obligations hereunder or under
such Note. Each Note shall (i) be dated the Initial Closing Date (ii) be stated
to mature on the Maturity Date, and (iii) provide for the payment of interest in
accordance with SECTION 2.8.
2.3. PROCEDURE FOR BORROWING; AMOUNTS OF BORROWINGS.
(a) The Borrower may borrow under the Commitments during the
Commitment Period on any Business Day that a Funding may be requested
pursuant to the terms of SECTION 5.2 of the Participation Agreement,
PROVIDED that the Borrower shall give the Administrative Agent
irrevocable notice (which must be received by the Administrative Agent
(i) prior to 11:00 A.M., Charlotte, North Carolina time, three Business
Days prior to the requested Borrowing Date if all or any part of the
requested Loans are to be Eurodollar Loans, or (ii)
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prior to 11:00 A.M., Charlotte, North Carolina time one (1) Business
Day prior to the requested Borrowing Date with respect to any Loans
that are to be Base Rate Loans) specifying (A) the amount to be
borrowed (which on any date shall not be in excess of the then
Available Commitments), (B) the requested Borrowing Date, (C) whether
the borrowing is to be of Eurodollar Loans, Base Rate Loans or a
combination thereof, and (D) if the borrowing is to be a combination of
Eurodollar Loans and Base Rate Loans, the respective amounts of each
Type of Loan; PROVIDED, HOWEVER, that prior to the Completion Date for
any specified Property (1) there shall be only one Interest Period in
effect at any specified time, which Interest Period shall apply to all
amounts then outstanding hereunder with respect to such Property that
are bearing interest based on the Eurodollar Rate and which Interest
Period shall each be one month in length (subject to the adjustments
set forth in the definition of "Interest Period"), (2) the first
Interest Period shall commence on the date that the first Eurodollar
Loan hereunder is extended, (3) each succeeding Interest Period shall
begin on the last day of the preceding Interest Period, and (4) any
amounts borrowed or converted hereunder which are to bear interest
based on the Eurodollar Rate may only be borrowed or converted on the
first day of a permitted Interest Period. Pursuant to the terms of the
Participation Agreement, the Borrower shall be deemed to have delivered
such notice upon the delivery of a notice by the Construction Agent or
the Lessee containing such required information. Upon receipt of any
such notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Subject to the terms and conditions hereof
(including specifically without limitation SECTION 4.2), each Lender
will make the amount of its pro rata share of each borrowing of each
Category available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in SECTION
9.2 prior to 2:00 P.M., Charlotte, North Carolina time, on the
Borrowing Date requested by the Borrower in funds immediately available
to the Administrative Agent. Such borrowing will then be made available
to the Borrower by the Administrative Agent crediting an account
designated, subject to SECTION 11.1 of the Participation Agreement, by
the Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and
in like funds as received by the Administrative Agent. No amount of any
Loan which is repaid or prepaid may be reborrowed hereunder.
(b) The Borrower shall deliver an Allocation Notice to the
Administrative Agent at least five (5) Business Days before any
Scheduled Interest Payment Date. On each date which is three (3)
Business Days prior to any Scheduled Interest Payment Date that occurs
during the Commitment Period, the Borrower shall be deemed to have
requested a Eurodollar Loan pursuant to SECTION 2.3(A) in an amount
equal to the aggregate amount of Allocated Interest due and payable on
such date with respect to the Construction Period Properties. Upon
receipt of any Allocation Notice from the Borrower with respect to such
Allocated Interest, the Administrative Agent shall promptly notify each
Lender thereof. The Borrowing Date with respect to any such borrowing
shall be the relevant Scheduled Interest Payment Date (PROVIDED that
the making of the Loans pursuant to such borrowing shall be subject to
satisfaction of the applicable conditions precedent set forth in
SECTION 4.2) and the proceeds of such borrowing shall be applied to pay
such Allocated Interest. On each such Borrowing Date, the Loan Property
Cost and Construction Loan Property Cost shall be increased by an
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amount equal to the Allocated Interest paid on such date with respect
to such Property with the proceeds of such borrowing.
(c) The aggregate amount of any borrowing constituting a
Eurodollar Loan and any conversion thereof shall be in an amount of at
least $1,000,000.
2.4. UNUSED FEES. Promptly after receipt from the Lessee of payment of
any Unused Fees payable pursuant to the Participation Agreement, the
Administrative Agent shall distribute such payment to the Lenders pro rata
according to their respective Commitment Percentages.
2.5. TERMINATION OR REDUCTION OF COMMITMENTS.
(a) The Borrower shall have the right, upon not less than
five (5) Business Days' written notice to the Administrative Agent, to
terminate the Commitments or, from time to time (but not more than
twice), to permanently reduce the amount of the Commitments, such
reductions to be effected pro rata among Categories of Loans and in
conjunction with simultaneous pro rata reductions of the Holder
Commitments, PROVIDED, that (i) after giving effect to such reduction,
the aggregate outstanding principal amount of the Loans of any Category
shall not exceed the aggregate Commitments of such Category and the
aggregate outstanding amount of Holder Fundings shall not exceed the
aggregate Holder Commitments, (ii) such notice shall be accompanied by
a certificate of the Construction Agent stating that the amount equal
to 97% of aggregate Budgeted Total Loan Property Cost as of the date of
such reduction does not exceed the aggregate amount of Available
Commitments as of such date after giving effect to such reduction and
(iii) unless a Lease Default or Lease Event of Default has occurred and
is continuing, the Lessee or the Construction Agent shall have
consented to such reduction or termination. Any such reduction of
Commitments and Holder Commitments shall be in an aggregate amount
equal to the lesser of (A) $1,000,000 or any integral multiple thereof
or (B) the remaining Available Commitments of each Category and the
remaining Available Holder Commitments, and shall reduce permanently
the Commitments of each Category and the Holder Commitments then in
effect.
(b) On any date on which the Commitments of any Category
shall automatically be reduced to zero pursuant to SECTION 6, the
Borrower shall prepay all outstanding Loans, together with accrued
unpaid interest thereon and all other amounts owing hereunder or under
any other Credit Document.
2.6. PREPAYMENTS AND PAYMENTS.
(a) The Borrower may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty, upon
at least two (2) Business Days' irrevocable notice to the
Administrative Agent, specifying the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans, Base Rate Loans or a
combination thereof, and, if a combination thereof, the amount
allocable to each; provided that all prepayments of Loans shall be
applied pro rata between Series A Loans (aggregated as a single amount)
and Series B Loans (aggregated as a single amount). Upon receipt of any
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such notice the Administrative Agent shall promptly notify each Lender
thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein. Amounts
prepaid may not be reborrowed.
(b) If on any date the Administrative Agent or the Lessor
shall receive any payment in respect of (i) any Casualty or
Condemnation pursuant to SECTION 15.1(A) or 15.1(G) of the Lease
(excluding any payments in respect thereof which are payable to Lessee
in accordance with the Lease), or (ii) the Termination Value of any
Property in connection with the delivery of a Termination Notice
pursuant to ARTICLE XVI of the Lease, or (iii) the Termination Value of
any Property in connection with the exercise of the option to purchase
any Property under SECTION 17.11 of the Lease, or (iv) the Termination
Value of any Property in connection with the exercise of a Purchase
Option under SECTION 20.1 of the Lease or the exercise of the option of
the Lessee to transfer the Properties to a third party pursuant to
SECTION 20.1 of the Lease, or (v) any payment required to be made or
elected to be made by the Construction Agent to the Lessor pursuant to
the terms of the Agency Agreement, then in each case, the Borrower
shall be required to prepay the principal balance of the Loans on such
date (such prepayment to be applied pro rata as between Series A Loans
(aggregated as a single amount) and Series B Loans (aggregated as a
single amount)) in an amount equal to ninety-seven percent (97%) of
such payment and shall apply the remaining three percent (3%) of such
payment pro rata to the principal amount of outstanding Holder
Fundings.
(c) Each prepayment of the Loans pursuant to SECTION 2.6(B)
shall be allocated to reduce the Loan Property Cost of the affected
Property. Each prepayment of the Loans pursuant to SECTION 2.6(A) shall
be allocated to reduce the respective Loan Property Costs of all
Properties pro rata according to the Loan Property Costs of such
Properties immediately before giving effect to such prepayment. Any
amounts applied to reduce the Loan Property Cost of any Construction
Period Property pursuant to this paragraph (c) shall also be applied to
reduce the Construction Loan Property Cost of such Property until such
Construction Loan Property Cost has been reduced to zero. Each
prepayment of the Loans pursuant to SECTION 2.6(A) or 2.6(B) shall be
accompanied by a simultaneous prepayment of accrued interest on such
Loan and the simultaneous payment of any amounts payable under SECTION
2.12 hereof in connection with the prepayment of such Loan.
(d) The outstanding principal amount of the Loans shall be
due and payable in full to the Agent for the benefit of each Lender on
the Maturity Date, or earlier as specified herein or in any other
Operative Agreement.
2.7. CONVERSION AND CONTINUATION OPTIONS.
(a) Subject to the restrictions set forth in SECTIONS 2.3,
2.9(C) AND 2.11 the Borrower may:
(i) upon delivery of written notice to the Agent on
or before 11:00 A.M. one (1) Business Day prior to the date
of such conversion, convert all or a part of
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Eurodollar Rate Loans to Base Rate Loans on the last day of
the Interest Period for such Eurodollar Rate Loans; and
(ii) upon delivery of written notice to the Agent
on or before 11:00 A.M. three (3) Business Days' prior to
the date of such election or conversion:
(A) elect a subsequent Interest Period for
all or a portion of Eurodollar Rate Loans to begin
on the last day of the then current Interest Period
for such Eurodollar Rate Loans; and
(B) convert Base Rate Loans to Eurodollar
Rate Loans on any Business Day.
All or any part of outstanding Eurodollar Loans or Base Rate Loans may
be converted as provided herein, PROVIDED that (i) no Base Rate Loan
may be converted into a Eurodollar Loan when any Event of Default has
occurred and is continuing, (ii) no Base Rate Loan may be converted
into a Eurodollar Loan which matures after the Maturity Date, (iii)
during the Commitment Period such conversion may only occur on the
first day of an Interest Period permitted pursuant to the terms of
SECTION 2.3 hereof and (iv) such notice of conversion shall contain an
election by the Borrower of an Interest Period for such Eurodollar Loan
to be created by such conversion and such Interest Period shall be in
accordance with the terms of the definition of the term "Interest
Period" as set forth in Appendix A to the Participation Agreement and
PROVIDED, FURTHER, that with respect to each conversion or continuation
of any Eurodollar Rate Loan, if the Borrower shall fail to give any
required notice or if such continuation is not permitted pursuant to
the preceding provision, such Loan shall be automatically converted to
a Base Rate Loan on the last day of such then expiring Interest Period.
2.8. INTEREST RATES AND PAYMENT DATES.
(a) Each Eurodollar Loan shall bear interest for each day
during each Interest Period with respect thereto at a rate per annum
equal to the Eurodollar Rate for such day for such Loan.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate.
(c) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable on any Loan or (iii) any other amount
payable hereunder shall not be paid when due (subject to applicable
grace periods) (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum
which is the lesser of (x) the interest rate applicable to such Loan
(or in the case of clause (iii) above, the Base Rate) plus 2% and (y)
the highest interest rate permitted by applicable law, in each case
from the date of such non-payment until such amount is paid in full
(whether after or before judgment).
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(d) Interest shall be payable in arrears on each Scheduled
Interest Payment Date, PROVIDED that (i) interest accruing pursuant to
paragraph (c) of this SECTION 2.8 shall be payable from time to time on
demand and (ii) each prepayment of any Loan shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid.
2.9. COMPUTATION OF INTEREST.
(a) Interest shall be calculated on the basis established in
SECTION 14.16 of the Participation Agreement, with respect to length of
a "year" and number of days for which interest is accrued. The
Administrative Agent shall as soon as practicable notify the Borrower
and the Lenders of each determination of a Eurodollar Rate. Any change
in the interest rate on a Loan resulting from a change in the Base
Rate, or the Reserve Percentage, shall become effective as of the day
on which such change in the Base Rate or Reserve Percentage becomes
effective. The Administrative Agent shall as practicable notify the
Borrower and the Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error.
(c) If the Eurodollar Rate cannot be determined by the
Administrative Agent in the manner specified in the definition of the
term "Eurodollar Rate" referenced in Appendix A to the Participation
Agreement, the Administrative Agent shall give telefacsimile or
telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. Until such time as the Eurodollar Rate can be
determined by the Administrative Agent in the manner specified in such
definition of such term, no further Eurodollar Loans shall be made or
continued as such at the end of the then current Interest Period and
all Loans shall continue as Base Rate Loans.
2.10. PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing by the Borrower from the Lenders
hereunder and any reduction of the Commitments of any Category of the
Lenders shall be made pro rata according to the respective Commitment
Percentages of such Category of the Lenders. Each payment (including
each prepayment) by the Borrower on account of principal of and
interest on the Series A Loans or the Series B Loans, as the case may
be, shall be made pro rata according to the respective outstanding
principal amounts on the Loans of each such Category then held by each
Lender. All payments (including prepayments) to be made by the Borrower
hereunder and under the Notes, whether on account of principal,
interest or otherwise, shall be made without setoff, counterclaim or
other defense and shall be made prior to 12:00 Noon, Charlotte, North
Carolina time, on the due date thereof to the Administrative Agent, for
the account of the Lenders, at the Administrative Agent's office
specified in SECTION 9.2, in Dollars and in immediately available
funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day,
such
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payment shall be extended to the next succeeding Business Day;
PROVIDED, HOWEVER, if such payment includes an amount of interest
calculated with reference to the Eurodollar Rate and the result of such
extension would be to extend such payment into another calendar month,
then such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant
to the preceding two sentences, interest thereon shall be payable at
the then applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not
make its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such amount is not made available
to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the daily average
Federal Funds Rate for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any
amounts owing under this SECTION 2.10(B) shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is
not made available to the Administrative Agent by such Lender within
three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at
the rate as set forth above on demand from the Borrower.
2.11. CHANGE IN CIRCUMSTANCES.
(a) INCREASED COST. If, after the date hereof, the adoption
of any applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable
Funding Office) with any request or directive (whether or not having
the force of law) of any such governmental authority, central bank, or
comparable agency:
(i) shall subject such Lender (or its Applicable
Funding Office) to any tax, duty or other charge with
respect to any Eurodollar Loans, its Notes, or its
obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its
Applicable Funding Office) under this Agreement or its Notes
in respect of any Eurodollar Loans (other than taxes imposed
on the overall net income of such Lender by the jurisdiction
in which such Lender has its principal office or such
Applicable Funding Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits
with or other liabilities or commitments of, such
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Lender (or its Applicable Funding Office), including the
Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its
Applicable Funding Office) or on the London interbank market
any other condition affecting this Agreement, its Notes, any
other Operative Agreement or any of such extensions of
credit or liabilities and commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, converting into,
continuing, or maintaining any Eurodollar Loans or to reduce any sum
received or receivable by such Lender (or its Applicable Funding
Office) under this Agreement or its Notes with respect to any
Eurodollar Loans, then the Borrower shall pay to such Lender on demand
such amount or amounts as will compensate such Lender for such
increased cost or reduction. If any Lender requests compensation by the
Borrower under this SECTION 2.11(A), the Borrower may, by notice to
such Lender (with a copy to the Administrative Agent), suspend the
obligation of such Lender to make or continue loans of the Type with
respect to which such compensation is requested, or to convert Loans of
any other Type into Loans of such Type, until the event or condition
giving rise to such request ceases to be in effect (in which case the
provisions of SECTION 2.11(F) shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) REDUCED RETURN. If, after the date hereof, any Lender
shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy or any change therein or in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of
such Lender's obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies
with respect to capital adequacy), then from time to time upon demand
by such Lender the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.
(c) NOTICE; DESIGNATION OF APPLICABLE FUNDING OFFICE. Each
Lender shall promptly notify the Borrower and the Administrative Agent
of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender to compensation pursuant to this
SECTION 2.11 and will designate a different Applicable Funding Office
if such designation will avoid the need for, or materially reduce the
amount of, such compensation and will not, in the judgment of such
Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this SECTION 2.11 shall furnish to the Borrower and
the Administrative Agent a statement setting forth the additional
amount or amounts to be paid
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to it hereunder which shall be conclusive in the absence of manifest
error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
(d) LIMITATION ON TYPES OF LOANS. If on or prior to the
first day of any Interest Period for any Eurodollar Loan:
(i) the Administrative Agent determines (which
determination shall be conclusive) that by reason of
circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(ii) the Majority Lenders determine (which
determination shall be conclusive) and notify the
Administrative Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of
funding Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice
thereof specifying the relevant Type of Loans and the relevant amounts
or periods, and so long as such condition remains in effect, the
Lenders shall be under no obligation to make additional Loans of such
Type, continue Loans of such Type, or to convert Loans of any other
Type into Loans of such Type and the Borrower shall, on the last day(s)
of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans, or convert such Loans into
another Type of Loan in accordance with the terms of this Agreement.
(e) ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Funding Office to make, maintain, or fund Eurodollar Loans
hereunder, then such Lender shall promptly notify the Borrower thereof
and such Lender's obligation to make or continue Eurodollar Loans and
to convert other Types of Loans into Eurodollar Loans shall be
suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of SECTION 2.11(F)
shall be applicable).
(f) TREATMENT OF AFFECTED LOANS. If the obligation of any
Lender to make a Eurodollar Loan or to continue, or to convert Loans of
any other Type into, Loans of a particular Type shall be suspended
pursuant to SECTION 2.11(A), (B) or (E) (Loans of such Type being
herein called "Affected Loans" and such Type being herein called the
"Affected Type"), such Lender's Affected Loans shall be automatically
converted into Base Rate Loans on the last day(s) of the then current
Interest Period(s) for Affected Loans (or, in the case of a conversion
required by SECTION 2.11(E), on such earlier date as such Lender may
specify to the Borrower with a copy to the Administrative Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in SECTION 2.11(A), (B) or (E) that gave rise
to such conversion no longer exist:
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(i) to the extent that such Lender's Affected Loans
have been so converted, all payments and prepayments of
principal that would otherwise be applied to such Lender's
Affected Loans shall be applied instead to its Base Rate
Loans; and
(ii) all Loans that would otherwise be made or
continued by such Lender as Loans of the Affected Type shall
be made or continued instead as Base Rate Loans, and all
Loans of such Lender that would otherwise be converted into
Loans of the Affected Type shall be converted instead into
(or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the
Administrative Agent) that the circumstances specified in SECTION
2.11(A), (B) or (E) that gave rise to the conversion of such Lender's
Affected Loans pursuant to this SECTION 2.11(F) no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to
exist) at a time when Loans of the Affected Type made by other Lenders
are outstanding, such Lender's Base Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Loans of the Affected Type, to the
extent necessary so that, after giving effect thereto, all Loans held
by the Lenders holding Loans of the Affected Type and by such Lender
are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their respective Commitments.
2.12. COMPENSATION. Upon the request of any Lender, the Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Eurodollar
Loan for any reason (including, without limitation, the acceleration of
the Loans pursuant to SECTION 6) on a date other than the last day of
the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
SECTION 4 hereof or SECTION 5 of the Participation Agreement to be
satisfied) to borrow, convert, continue, or prepay a Eurodollar Loan on
the date for such borrowing, conversion, continuation, or prepayment
specified in the relevant notice of borrowing, prepayment,
continuation, or conversion under this Agreement.
2.13. TAXES.
(a) Any and all payments by the Borrower to or for the
account of any Lender or the Administrative Agent hereunder or under
any other Operative Agreement shall be made free and clear of and
without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of each Lender
and the Administrative Agent, taxes imposed on its income, capital
gains, net worth, capital or equity and franchise taxes imposed on it,
by the
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jurisdiction under the laws of which such Lender (or its Applicable
Funding Office or any other office) or the Administrative Agent (as the
case may be) is organized or any political subdivision thereof (all
such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as
"Non-Excluded Taxes"). If the Borrower shall be required by law to
deduct any Non-Excluded Taxes from or in respect of any sum payable
under this Agreement or any other Operative Agreement to any Lender or
the Administrative Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this SECTION
2.13) such Lender or the Administrative Agent receives an amount equal
to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law, and (iv) the
Borrower shall furnish to the Administrative Agent, at its address
referred to in SECTION 9.2, the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay or cause to be
paid any and all present or future stamp or documentary taxes and any
other excise or property taxes or charges or similar levies which arise
from any payment made under this Agreement or any other Operative
Agreement or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Operative Agreement
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Non-Excluded Taxes and
Other Taxes (including, without limitation, any Non-Excluded Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this SECTION 2.13) paid by such Lender or the Administrative
Agent (as the case may be) and any liability (including penalties,
interest, and expenses) arising therefrom or with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes
a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the
Administrative Agent (but only so long as such Lender remains lawfully
able to do so), shall provide the Borrower and the Administrative Agent
with (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code),
certifying that such Lender is entitled to
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an exemption from or a reduced rate of tax on payments pursuant to this
Agreement or any of the other Operative Agreements.
(e) For any period with respect to which a Lender has failed
to provide the Borrower and the Administrative Agent with the
appropriate form pursuant to SECTION 2.13(D) (unless such failure is
due to a change in treaty, law, or regulation occurring subsequent to
the date on which a form originally was required to be provided), such
Lender shall not be entitled to indemnification under SECTION 2.13(A)
or (B) with respect to Non-Excluded Taxes to the extent that the
provision of such form would have prevented any such Non-Excluded
Taxes; PROVIDED, however, that should a Lender, which is otherwise
exempt from or subject to a reduced rate of withholding tax, become
subject to Non-Excluded Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such Lender
(at such Lender's expense) shall reasonably request to assist such
Lender to recover such Non-Excluded Taxes.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Lender pursuant to this SECTION 2.13, then
such Lender will agree to use reasonable efforts to change the
jurisdiction of its Applicable Funding Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of
Non-Excluded Taxes, the Borrower shall furnish to the Administrative
Agent the original or a certified copy of a receipt evidencing such
payment.
(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this SECTION 2.13 shall survive the termination
of the Commitments and the payment in full of the Notes.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans, each of the Trust Company and the Owner Trustee
hereby represents and warrants to the Administrative Agent and each Lender as
follows (PROVIDED that the representations in SECTIONS 3.8, 3.9, 3.10, 3.12 and
3.13 are made solely by the Owner Trustee in its capacity as such):
3.1. DUE ORGANIZATION, ETC. It is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States and has the power and authority to enter into and perform its obligations
under the Trust Agreement and (assuming due authorization, execution and
delivery of the Trust Agreement by the Holders) has the trust power and
authority to act as the Owner Trustee and to enter into and perform the
obligations under each of the other Operative Agreements to which the Trust
Company or the Owner Trustee, as the case may be, is or will be a party and each
other agreement, instrument and document to be executed and delivered by it on
or before the date this representation is made or deemed made in connection with
or as
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contemplated by each such Operative Agreement to which the Trust Company or the
Owner Trustee, as the case may be, is or will be a party.
3.2. AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance of each Operative Agreement to which it is or will be a party,
either in its individual capacity or (assuming due authorization, execution and
delivery of the Trust Agreement by the Holders) as the Owner Trustee, as the
case may be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the terms
and provisions thereof (a) requires or will require any approval of its
stockholders or any approval or consent of any trustee or holders of any of its
indebtedness or obligations, (b) violates or will violate any current law,
governmental rule or regulation relating to its banking or trust powers, (c)
violates or will violate or result in any breach of or constitute any default
under, or result in the creation of any Lien upon any of its property under, (i)
its charter or by-laws, or (ii) any indenture, mortgage, chattel mortgage, deed
of trust, conditional sales contract, bank loan or credit agreement or other
agreement or instrument to which it is a party or by which it or its properties
may be bound or affected, which violation, breach, default or Lien under clause
(ii) would materially and adversely affect its ability, in its individual
capacity or as Owner Trustee, to perform its obligations under the Operative
Agreements to which it is a party or (d) requires or will require any
Governmental Action by any Governmental Authority regulating its banking or
trust powers.
3.3. ENFORCEABILITY, ETC. The Trust Agreement and, assuming the Trust
Agreement is the legal, valid and binding obligation of the Holders, each other
Operative Agreement to which the Trust Company or the Owner Trustee, as the case
may be, is or will be a party have been, or will be, duly executed and delivered
by the Trust Company or the Owner Trustee, as the case may be, and the Trust
Agreement and each such other Operative Agreement to which the Trust Company or
the Owner Trustee, as the case may be, is a party constitutes, or upon execution
and delivery will constitute, a legal, valid and binding obligation enforceable
against the Trust Company or the Owner Trustee, as the case may be, in
accordance with the terms thereof.
3.4. LITIGATION. There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental Authority
that concerns any Property being purchased or leased or Construction Funding
being funded on the date this representation is made or deemed made or that, if
adversely determined, would materially and adversely affect its ability, in its
individual capacity or as Owner Trustee, to perform its obligations under the
Operative Agreements to which it is a party or would question the validity or
enforceability of any of the Operative Agreements to which it is or will become
a party.
3.5. LESSOR LIENS. Each Property is free and clear of all Lessor Liens.
3.6. ASSIGNMENT. It has not assigned or transferred any of its right,
title or interest in or under the Lease, the Agency Agreement or its interest in
any Property, except in accordance with the Operative Agreements.
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3.7. DEFAULTS. No Default or Event of Default hereunder or under any
other Operative Agreement attributable to it has occurred and is continuing.
3.8. DOCUMENTATION. The Owner Trustee, in its trust capacity, is a
party to no documents, instruments or agreements other than the Operative
Agreements (and any other documents delivered in connection with the Operative
Agreements).
3.9. USE OF PROCEEDS. The Owner Trustee shall use the proceeds of the
Loans solely in accordance with the terms of the Operative Agreements.
3.10. SECURITIES ACT. Neither the Owner Trustee nor any Person
authorized by the Owner Trustee to act on its behalf has offered or sold any
interest in the Trust Estate or the Notes, or in any similar security relating
to a Property, or in any security the offering of which for the purposes of the
Securities Act of 1933, as amended, would be deemed to be part of the same
offering as the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person other than in the case of the
Notes, the Lenders, and neither the Owner Trustee nor any Person authorized by
the Owner Trustee to act on its behalf will take any action which would subject,
as a direct result of such action alone, the issuance or sale of any interest in
the Trust Estate or the Notes to the provisions of Section 5 of the Securities
Act of 1933, as amended, or require the qualification of any Operative Agreement
under the Trust Indenture Act of 1939, as amended.
3.11. CHIEF PLACE OF BUSINESS. The Owner Trustee's chief place of
business, chief executive office and office where the documents, accounts and
records relating to the transactions contemplated by this Agreement and each
other Operative Agreement are kept are each located at 79 South Main Street,
Salt Lake City, Utah 84111.
3.12. FEDERAL RESERVE REGULATIONS. The Owner Trustee is not engaged
principally in, and does not have as one of its important activities, the
business of extending credit for the purpose of purchasing or carrying any
margin stock (within the meaning of Regulation U of the Board), and no part of
the proceeds of the Loans will be used by it to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any such margin stock or for any purpose that violates, or is inconsistent with,
the provisions of Regulations T, U or X of the Board.
3.13. INVESTMENT COMPANY ACT. The Owner Trustee is not an "investment
company" or a company controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 4. CONDITIONS PRECEDENT
4.1. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement
is subject to the satisfaction of all conditions precedent set forth in SECTION
6 of the Participation Agreement required to be satisfied on or prior to the
Initial Closing Date and to the receipt by each Lender of its Notes, duly
executed by the Borrower.
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4.2. CONDITIONS TO EACH LOAN. The agreement of each Lender to make any
Loan requested to be made by it on any date is subject to the satisfaction of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Borrower in or pursuant to
the Operative Agreements shall be true and correct in all material
respects on and as of such date as if made on and as of such date,
except to the extent that such representations and warranties expressly
relate to an earlier date.
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
(c) PARTICIPATION AGREEMENT CONDITIONS. With respect to each
Acquisition Funding and each Construction Funding, the applicable
conditions precedent to the Funding associated therewith specified in
SECTION 5 of the Participation Agreement shall have been satisfied.
(d) HOLDER CONTRIBUTION. With respect to each Acquisition
Funding and each Construction Funding, the Administrative Agent shall
be satisfied that the Lessor shall receive from the Holders on the
relevant Borrowing Date an amount equal to the Holder Funding
associated with such Loan.
(e) ALLOCATION NOTICE. With respect to each Interest Payment
Loan, the Administrative Agent shall have received an Allocation Notice
no later than five (5) Business Days prior to the Borrowing Date in
respect thereof.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such Loan that the conditions
contained in this SECTION 4.2 have been satisfied.
SECTION 5. COVENANTS
So long as any Loan or Note remains outstanding and unpaid or any other
amount is owing to any Lender or the Administrative Agent hereunder or under any
other Credit Document and so long as the Commitments have not been terminated:
5.1. OTHER ACTIVITIES. The Borrower shall not conduct, transact or
otherwise engage in, or commit to transact, conduct or otherwise engage in, any
business or operations other than the entry into, and exercise of rights and
performance of obligations in respect of, the Operative Agreements and other
activities incidental or related to the foregoing.
5.2. OWNERSHIP OF PROPERTIES; INDEBTEDNESS. The Borrower shall not own,
lease, manage or otherwise operate any properties or assets other than in
connection with the activities described in SECTION 5.1, or incur, create,
assume or suffer to exist any Indebtedness or other consensual liabilities or
financial obligations other than as may be incurred, created or assumed or as
may exist
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in connection with the activities described in SECTION 5.1 (including, without
limitation, the Loans and other obligations incurred by the Borrower hereunder).
5.3. DISPOSITION OF ASSETS. The Borrower shall not convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets, whether now owned or hereafter acquired, except to the extent expressly
contemplated by the Operative Agreements.
5.4. COMPLIANCE WITH OPERATIVE AGREEMENTS. The Borrower shall at all
times (a) observe and perform all of the covenants, conditions and obligations
required to be performed by it (whether in its capacity as Lessor, Owner Trustee
or otherwise) under each Operative Agreement to which it is a party and (b)
observe and perform, or cause to be observed and performed, all of the
covenants, conditions and obligations of the Lessor under the Lease, even in the
event that the Lease is terminated at stated expiration following a Lease Event
of Default or otherwise.
5.5. FURTHER ASSURANCES. At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole expense of the
Borrower, the Borrower will promptly and duly execute and deliver such further
instruments and documents and take such further action as the Administrative
Agent or the Majority Lenders may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and the other
Operative Agreements and of the rights and powers herein or therein granted.
5.6. NOTICES. If on any date, a Responsible Officer of the Borrower
shall obtain actual knowledge of the occurrence of a Default or Event of
Default, the Borrower will give written notice thereof to the Administrative
Agent within five (5) Business Days after such date.
5.7. DISCHARGE OF LIENS. Neither the Borrower nor the Trust Company
will create or permit to exist at any time (and each of the Borrower and the
Trust Company will, at its own expense, promptly take such action as may be
necessary duly to discharge, or cause to be discharged), any Lessor Liens
attributable to it on the Properties, PROVIDED that the Borrower and the Trust
Company shall not be required to discharge any Lessor Lien while the same is
being contested in good faith by appropriate proceedings diligently prosecuted
so long as (a) such proceedings shall not involve any material danger of
impairment of any of the Liens contemplated by the Security Documents or of the
sale, forfeiture or loss of any Property or title thereto or any interest
therein or the payment of Rent, (b) such proceedings shall not materially
interfere with the construction of Improvements on any Property, and (c) such
proceedings shall not materially interfere with the disposition of any Property
or title thereto or interest therein or the payment of Rent.
5.8. TRUST AGREEMENT. Without prejudice to any right of the Owner
Trustee under the Trust Agreement to resign, the Owner Trustee (a) agrees not to
terminate or revoke the trust created by the Trust Agreement except as permitted
by ARTICLE VIII of the Trust Agreement, (b) agrees not to amend, supplement,
terminate, revoke or otherwise modify any provision of the Trust Agreement in
any manner which could reasonably be expected to have an adverse effect on the
rights or interests of the Administrative Agent or the Lenders hereunder or
under the other Operative Agreements and (c) agrees to comply with all of the
terms of the Trust Agreement.
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SECTION 6. EVENTS OF DEFAULT
Upon the occurrence of any of the following specified events (each an
"Event of Default"):
(a) The Borrower shall, except as provided in paragraph (c),
default, and such default shall continue for more than three (3)
Business Days, in the payment when due of any principal or interest on
any Loan; or
(b) Except as provided in paragraphs (a) and (c), the
Borrower shall fail to make the payment of any amount due and payable
owing under any of the Credit Documents within five (5) Business Days
after receipt of notice that such payment is due; or
(c) The Borrower shall default in the payment of any amount
due on the Maturity Date owing under any Credit Document; or
(d) The Borrower shall default in the due performance or
observance by it of any term, covenant or agreement contained in any
Credit Document to which it is a party (other than those referred to in
paragraphs (a), (b) and (c) above), provided that in the case of any
such default under SECTION 5.4, 5.5 or 5.8(C), such default shall
continue for a period of at least thirty (30) days after notice to the
Borrower and the Lessee by the Administrative Agent or the Majority
Lenders; or
(e) Any representation, warranty or statement made or deemed
made by the Borrower herein or in any other Credit Document, or by the
Borrower, or the Lessee or the Construction Agent in the Participation
Agreement, the Lease or the Agency Agreement or in any statement or
certificate delivered or required to be delivered pursuant hereto or
thereto, shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
(f) There shall have occurred and be continuing:
(i) any Lease Event of Default or other "Event of
Default" (as defined in the Participation Agreement); or
(ii) a default by the Owner Trustee in the due
performance or observance by it of any term, covenant or
agreement contained in the Participation Agreement or in the
Trust Agreement to or for the benefit of the Administrative
Agent or a Lender, PROVIDED that in the case of this clause
(ii), such default shall continue unremedied for a period of
at least thirty (30) days after notice to the Owner Trustee
and the Lessee by the Administrative Agent or the Majority
Lenders; or
(iii) any Aviation Sales Credit Agreement Event of
Default; or
(g) The Borrower shall be unable to pay its debts generally
as they become due; file a petition to take advantage of any insolvency
statute; make an assignment for the benefit
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of its creditors; commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole
or any substantial part of its property; file a petition or answer
seeking liquidation, reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute; or
(h) Any court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or of the whole or any
substantial part of its properties and such order, judgment or decree
continues unstayed and in effect for a period of sixty (60) days, or
approve a petition filed against the Borrower seeking liquidation,
reorganization or arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute of the United
States of America or any state, which petition is not dismissed within
sixty (60) days; or if, under the provisions of any other law for the
relief or aid of debtors, a court of competent jurisdiction shall
assume custody or control of the Borrower or of the whole or any
substantial part of its properties, which control is not relinquished
within sixty (60) days; or if there is commenced against the Borrower
any proceeding or petition seeking reorganization, arrangement or
similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state
which proceeding or petition remains undismissed for a period of sixty
(60) days; or if the Borrower takes any action to indicate its consent
to or approval of any such proceeding or petition; or
(h) Any Security Document shall cease to be in full force
and effect, or shall cease to give the Administrative Agent the Liens,
rights, powers and privileges purported to be created thereby
(including, without limitation, a first priority perfected security
interest in, and Lien on, all of the Properties), in favor of the
Administrative Agent on behalf of itself and the Lenders, superior to
and prior to the rights of all third Persons and subject to no other
Liens (except Permitted Liens); or
(i) The Lease, the Guaranty or any other Operative Agreement
shall cease to be enforceable against the Lessee, the Construction
Agent or any Guarantor; or
(j) One or more judgments or decrees shall be entered
against the Borrower involving a liability of $50,000 or more for any
one such judgment or decree, or $100,000 or more in the aggregate for
all such judgments and decrees, and any such judgments or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal
within thirty (30) days from the entry thereof; or
(k) Any default by any party shall have occurred and be
continuing under any lease or sublease (other than the Lease or any
sublease by Lessee permitted under SECTION 25.2(B) of the Lease) of any
portion of any Property;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (g) above with respect to the Borrower, the Commitments shall
automatically and immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement, the Notes
and any other Credit Documents, shall immediately become due and payable,
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and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the Majority Lenders,
the Administrative Agent may, or upon the request of the Majority Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Commitments
to be terminated forthwith, whereupon the Commitments shall immediately
terminate; and (ii) with the consent of the Majority Lenders, the Administrative
Agent may, or upon the request of the Majority Lenders, the Administrative Agent
shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement, the Notes
and any other Credit Documents, to be due and payable forthwith, whereupon the
same shall immediately become due and payable (any of the foregoing occurrences
or actions referred to in clause (A) or (B) above, being referred to as an
"Acceleration"). Except as expressly provided above in this SECTION 6,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
Upon the occurrence of any Event of Default and at any time thereafter
so long as any Event of Default shall be continuing, the Administrative Agent
may, and upon the written instructions of the Majority Lenders shall, exercise
any or all of the rights and powers and pursue any or all of the remedies
available to it hereunder and under the other Credit Documents and the Lease and
shall have any and all rights and remedies available under the Uniform
Commercial Code or any other provision of law (all such remedies being
cumulative and in addition to any other remedies that may be available).
Upon the occurrence of any Event of Default and at any time thereafter
so long as any Event of Default shall be continuing, the Administrative Agent
may, and upon request of the Majority Lenders shall, proceed to protect and
enforce this Agreement, the Notes, the Lease, and the other Operative Agreements
by one or more suits or proceedings in equity, at law or in bankruptcy, whether
for the specific performance of any covenant or agreement contained therein or
in execution or aid of any power granted therein, or for foreclosure hereunder,
or for the appointment of a receiver for any Property, or for the recovery of
judgment for any indebtedness secured thereby, or for the enforcement of any
other remedy available under applicable laws.
The Borrower shall be liable for any and all accrued and unpaid amounts
due hereunder before, during or after the exercise of any of the foregoing
remedies, including without limitation all reasonable legal fees and other
reasonable costs and expenses incurred by the Administrative Agent or any Lender
by reason of the occurrence of any Event of Default or the exercise of remedies
with respect thereto.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1. APPOINTMENT; POWERS, AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
under this Agreement and the other Operative Agreements with such powers and
discretion as are specifically delegated to the Administrative Agent by the
terms of this Agreement and the other Operative Agreements, together with such
other powers as are reasonably incidental thereto. The Administrative Agent
(which term
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as used in this sentence and in SECTION 7.7 and the first sentence of SECTION
7.6 hereof shall include its Affiliates and its own and its Affiliates'
officers, directors, employees, and agents):
(a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and shall not be a trustee
or fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made
in or in connection with any Operative Agreement or any certificate or
other document referred to or provided for in, or received by any of
them under, any Operative Agreement, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any
Operative Agreement, or any other document referred to or provided for
therein or for any failure by any Person to perform any of its
obligations thereunder;
(c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Person or the satisfaction of any
condition or to inspect the property (including the books and records)
of any Person;
(d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Operative Agreement; and
(e) shall not be responsible for any action taken or omitted
to be taken by it under or in connection with any Operative Agreement,
except for its own gross negligence or willful misconduct.
7.2. DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement and the other Operative Agreements through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
7.3. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely upon any certification, notice, instrument, writing, or
other communication (including, without limitation, any thereof by telephone or
telefacsimile) believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for any other Person),
independent accountants, and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until the Administrative Agent
receives and accepts an Assignment and Acceptance executed in accordance with
SECTION 9.8 hereof. As to any matters not expressly provided for by this
Agreement, the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Lenders, and such instructions shall be
binding on all of the Lenders; PROVIDED, HOWEVER, that the Administrative Agent
shall not be required to take any action that
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exposes the Administrative Agent to personal liability or that is contrary to
any Operative Agreement or applicable law or unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking any such action.
7.4. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Lenders; PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interest of the Lenders.
7.5. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower, the Lessee, the Guarantors and their Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under the Operative
Agreements. Except for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of the Borrower, the Lessee or any Guarantor or
any of their Subsidiaries or Affiliates that may come into the possession of the
Administrative Agent or any of its Affiliates.
7.6. INDEMNIFICATION. The Lenders agree to indemnify the Administrative
Agent (to the extent not reimbursed by the Borrower or Lessee, but without
limiting the obligations of the Borrower or the Lessee to do so) ratably in
accordance with their respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the
Administrative Agent (including by any Lender) in any way relating to or arising
out of any Operative Agreement or the transactions contemplated thereby or any
action taken or omitted by the Administrative Agent under any Operative
Agreement; PROVIDED that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any costs or expenses payable by the Borrower or Lessee, to the
extent that the Administrative Agent is not promptly reimbursed for such costs
and expenses by the Borrower or Lessee. The agreements contained in this SECTION
7.7 shall survive payment in full of the Loans and all other amounts payable
under this Agreement.
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7.7. RIGHTS AS LENDER. With respect to its Commitment and the Loans
made by it, NationsBank (and any successor acting as Administrative Agent) in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity. NationsBank (and any successor acting as Administrative
Agent) and its affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, make investments in, provide services to,
and generally engage in any kind of lending, trust, or other business with any
of the Borrower, the Lessee, or any Guarantor or any of their Subsidiaries or
Affiliates as if it were not acting as Administrative Agent, and NationsBank
(and any successor acting as Administrative Agent) and its Affiliates may accept
fees and other consideration from any of the Borrower, the Lessee or any
Guarantor or any of their Subsidiaries or Affiliates for services in connection
with this Agreement or otherwise without having to account for the same to the
Lenders.
7.8. RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative Agent may
resign at any time by giving notice thereof to the Lenders and the Borrower. In
the event that the Administrative Agent shall neither be a Lender nor a Holder
under the Operative Agreements, the Lessee may require the Administrative Agent
to resign. Upon any such resignation, the Majority Lenders shall have the right
to appoint (with the consent of the Lessee so long as there shall not have
occurred and be continuing a Lease Default or Lease Event of Default, which
consent shall not be unreasonably withheld) a successor Administrative Agent. If
no successor Administrative Agent shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a commercial bank organized under the laws
of the United States of America having combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this SECTION 7 shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
SECTION 8. MATTERS RELATING TO PAYMENT AND COLLATERAL
8.1. COLLECTION OF PAYMENTS AND OTHER AMOUNTS.
(a) The Lessee has agreed pursuant to the terms of the
Participation Agreement to pay directly to the Administrative Agent any
and all Rent and any other amounts of any kind or type owing by the
Lessee to the Lessor or the Owner Trustee under the Lease or any other
Operative Agreement. The Administrative Agent shall, promptly after
receipt, apply in accordance with the terms of this SECTION 8 any such
amounts received from the Lessee and all other payments, receipts and
other consideration received by the Administrative Agent
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pursuant to the Security Agreement or otherwise received by the
Administrative Agent or any of the Lenders in connection with the
Collateral, the Security Documents or any of the other Operative
Agreements.
(b) Payments and other amounts received by the
Administrative Agent from time to time in accordance with the terms of
subparagraph (a) shall be applied as follows:
(i) Any such payment identified as Basic Rent
shall be applied by the Administrative Agent FIRST, ratably to
the Lenders for application to the payment of interest on the
Loans which is due and payable on such date (other than,
except in the case of an Acceleration, Allocated Interest);
and SECOND, to the Borrower for application ratably to the
payment of accrued Holder Yield with respect to Holder
Property Cost (other than, except in the case of an
Acceleration, Allocated Return); and THIRD, if no Default or
Event of Default has occurred and is continuing, any excess
shall be paid to such Person or Persons as the Lessee may
designate; PROVIDED that if a Default or Event of Default is
in effect, such excess (if any) shall instead be held by the
Administrative Agent until the earlier of (I) the first date
thereafter on which no Default or Event of Default shall be
continuing (in which case such payments shall then be made to
such other Person or Persons designated by the Lessee) and
(II) the Maturity Date (or, if earlier, the date of any
Acceleration) in which case such amounts shall be applied in
the manner contemplated by SECTION 8.1(B)(IV).
(ii) Any such payment or amount described in
SECTION 2.6(B) shall be applied in accordance with the terms
of SECTION 2.6(B).
(iii) Any such payment identified as proceeds of the
sale of any Property, whether pursuant to ARTICLE XXII of the
Lease or pursuant to the exercise of remedies under the
Security Documents or otherwise, and any payment in respect of
excess wear and tear pursuant to SECTION 22.3 of the Lease,
shall be applied by the Administrative Agent FIRST, ratably to
the payment of the principal and interest of the Series B
Loans then outstanding, SECOND, to the Borrower for
application ratably to the payment of the outstanding
principal balance of all Holder Fundings plus all outstanding
Holder Yield with respect to such outstanding Holder Fundings,
THIRD, to the extent such payment exceeds the maximum amount
payable pursuant to the foregoing provisions of this paragraph
(iii), ratably to the payment of the principal and interest of
the Series A Loans plus any and all other amounts owing to the
Administrative Agent and the Lenders hereunder or under any of
the other Operative Agreements and FOURTH, to the extent
moneys remain after application pursuant to clauses FIRST
through THIRD above, to the Borrower for application to any
and all other amounts owing to the Holders or the Borrower
under the Operative Agreements and thereafter as the Borrower
and the Holders shall determine.
(iv) Any such payment identified as a payment
pursuant to SECTION 22.1(B) of the Lease (or otherwise) of the
Maximum Residual Guarantee Amount (or any such lesser amount
as may be required by SECTION 22.1(B) of the Lease) in respect
of
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the Properties shall be applied by the Administrative Agent
FIRST, ratably to the payment of the principal and interest
balance of the Series A Loans then outstanding, SECOND, to the
payment of any other amounts owing to the Administrative Agent
or the Lenders hereunder or under any of the other Operative
Agreement, and THIRD, to the extent moneys remain after
application pursuant to clauses FIRST and SECOND above, to the
Borrower for application to Holder Fundings and Holder Yield
and any other amounts owing to the Holders or the Borrower
under the Operative Agreements and thereafter as the Borrower
and the Holders shall determine.
(v) Any such payment identified as Supplemental
Rent shall be applied by the Administrative Agent to the
payment of any amounts then owing to the Administrative Agent,
the Lenders, the Holders and the other parties to the
Operative Agreements (or any of them) (other than any such
amounts payable pursuant to the preceding provisions of this
SECTION 8.1(B)) as shall be determined by the Administrative
Agent in its reasonable discretion.
(vi) The Administrative Agent in its reasonable
judgment shall identify the nature of each payment or amount
received by the Administrative Agent and apply each such
amount in the manner specified above.
(c) Upon the termination of the Commitments and the payment
in full of the Loans and all other amounts owing by the Borrower
hereunder or under any other Credit Document, any such moneys remaining
with the Administrative Agent shall be paid to the Borrower for
disbursement in accordance with the Operative Agreements and if not
provided for thereunder to such other Person or Persons as the Borrower
may designate. In the event of an Acceleration it is agreed that, prior
to the application of amounts received by the Administrative Agent in
the order described in SECTION 8.1(B) above, any such amounts shall
first be applied to the payment of (i) any and all sums advanced by the
Administrative Agent in order to preserve the Collateral or preserve
its security interest therein, (ii) the reasonable expenses of
retaking, holding, preparing for sale or lease, selling or otherwise
disposing or realizing on the Collateral, or of any exercise by the
Administrative Agent of its rights under the Security Documents,
together with reasonable attorneys' fees and court costs and (iii) any
other amounts owed to the Administrative Agent under or in connection
with the transactions contemplated by the Operative Agreements
(including without limitation any accrued and unpaid administration
fees).
8.2. CERTAIN REMEDIAL MATTERS. Notwithstanding any other provision of
this Agreement or any other Credit Document:
(a) the Borrower shall at all times retain all rights to
Excepted Payments payable to or for the account of the Owner Trustee or
any of the Holders and to demand, collect or commence an action at law
to obtain such payments and to enforce any judgment with respect
thereto (but not to terminate the Lease as a result thereof); and
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(b) the Borrower shall at all times retain the right, but
not to the exclusion of the Administrative Agent, (A) to receive from
the Lessee all notices, certificates and other documents and all
information that the Lessee is permitted or required to give or furnish
to the Borrower or the Lessor pursuant to the Lease, the Participation
Agreement or any other Operative Agreement, (B) to retain all rights
with respect to insurance that ARTICLE XIV of the Lease specifically
confers upon the "Lessor", (C) to provide such insurance as the Lessee
shall have failed to maintain or as the Borrower may desire, and (D) to
enforce compliance by the Lessee with the provisions of ARTICLES VIII,
IX, X, XI, XIV AND XVII of the Lease.
8.3. RELEASE OF PROPERTIES, ETC. If the Lessee shall at any time
purchase any Property pursuant to the terms of the Lease, or the Construction
Agent shall purchase any Property pursuant to the Agency Agreement, or if any
Property shall be sold in accordance with ARTICLE XXII of the Lease, then, upon
satisfaction by the Borrower of its obligation to prepay the Loans and to pay
accrued interest on the Loans so prepaid pursuant to SECTION 2.6, the
Administrative Agent is hereby authorized to release such Property from the
Liens created by the Security Documents. In addition, upon the termination of
the Commitments and the payment in full of the Loans and all other amounts owing
by the Borrower, the Lessee and the Construction Agent hereunder or under any
other Operative Agreement the Administrative Agent is hereby authorized to
release all of the Properties from the Liens created by the Security Documents;
provided that such payment shall be sufficient to pay in full the Loans and all
other amounts owing by the Borrower, the Lessee or the Construction Agent
hereunder or under the other Operative Agreements. Upon request of the Borrower
or the Lessee following any such release, the Administrative Agent shall, at the
sole cost and expense of the Borrower or the Lessee, execute and deliver to the
Borrower or the Lessee such documents as the Borrower or the Lessee shall
reasonably request to evidence such release.
8.4. EXCEPTED PAYMENTS. Notwithstanding any other provision of this
Agreement or the Security Documents, any Excepted Payment received at any time
by the Administrative Agent shall be distributed promptly to the Person entitled
to receive such Excepted Payment.
SECTION 9. MISCELLANEOUS
9.1. AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Credit Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this SECTION 9.1. The
Majority Lenders may, or, with the written consent of the Majority Lenders, the
Administrative Agent may, from time to time, (a) enter into written agreements
with the Borrower, amending, modifying or supplementing the Credit Documents for
the purpose of adding any provisions to the Credit Documents or changing in any
manner the rights of the Administrative Agent, the Lenders or the Borrower
thereunder or (b) waive, on such terms and conditions as the Majority Lenders
may specify in such instrument, any of the requirements of the Credit Documents
or any Default or Event of Default and its consequences. In addition, the
Administrative Agent may from time to time consent in writing to amendments,
supplements, modifications or waivers with respect to any Operative Agreement
(other than the Credit Documents but including the Guaranty Agreement), subject
to receipt of the prior written consent of the Majority Lenders; PROVIDED,
HOWEVER, that so long as the Administrative Agent has no actual knowledge of the
existence of an Event of Default the Administrative Agent may grant waivers or
consents with
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respect to the terms and requirements of the Participation Agreement without the
prior consent of the Lenders (as such authority of the Administrative Agent is
more specifically described in SECTION 7.1 hereof). Notwithstanding the
foregoing, no such amendment, supplement, modification or waiver shall (i)
reduce the amount or extend the scheduled date of maturity of any Note, or
reduce the stated rate of any interest payable hereunder (other than as a result
of waiving the applicability of any post default increase in interest rates) or
any Unused Fees payable under the Participation Agreement, or extend the
scheduled date of any payment of such interest or Unused Fees, or increase the
amount or extend the expiration date of any Lender's Commitment, or permit any
Loan by any Lender in excess of its Commitment, or elect to decline the funding
of any fees, taxes, expenses, disbursements, Transaction Expenses or
indemnifying payments (as described in SECTIONS 9.1(A), 9.1(B) or 13.5), in each
case without the consent of each Lender directly affected thereby, or (ii)
amend, modify or waive any provision of this SECTION 9.1 or reduce the
percentage specified in the definition of Majority Lenders, or consent to the
assignment or transfer by the Borrower of or release the Borrower from any of
its rights and obligations under the Credit Documents, or release a material
portion of the Collateral (except in accordance with SECTION 8.3), or release
the Lessee from its obligations under the Lease, or release any Guarantor from
its obligations under the Guaranty, or otherwise alter any payment obligations
of the Lessee to the Lessor or the Lessor to the Administrative Agent or the
Lenders under the Operative Agreements, in each case without the written consent
of all the Lenders, or (iii) amend, modify or waive any provision of SECTION 7
without the written consent of the then Administrative Agent. Any such waiver,
amendment, supplement or modification shall be binding upon the Borrower, the
Lessee, the Lenders and the Administrative Agent and all future holders of the
Notes. In the case of any waiver, the Borrower, the Lessee, the Lenders and the
Administrative Agent shall be restored to their former position and rights under
the Credit Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
9.2. NOTICES. All notices, requests and demands to or upon the
respective parties hereto shall be in writing and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered,
or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telefacsimile notice, when received, addressed as follows in the
case of the Borrower and the Administrative Agent, and as set forth in SCHEDULE
1.2 in the case of the other parties hereto, or to such other address as may be
hereafter notified by any party hereto or any future holder of the Notes:
If to the Borrower:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Val T. Orton
Telephone No.: (801) 246-5630
Telecopy No.: (801) 246-5053
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If to NationsBank, National Association, as a Lender, to it at the following
address:
(i) if by certified or registered mail:
NationsBank, National Association
P.O. Box 407090
Fort Lauderdale, Florida 33340-7090
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
(ii) if by hand-delivery, courier service
or telecopy:
NationsBank, National Association
One Financial Plaza
10th Floor
Fort Lauderdale, Florida 33394
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
with all notices of requests for Loans, or conversion, continuation or
prepayment of any Loan, to be sent to:
NationsBank Agency Services
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Kenneth Deffendall
Telephone No.: (704) 388-6482
Telecopy No.: (704) 386-9923
If to the Agent, to it at the respective following address:
(i) if by certified or registered mail:
NationsBank, National Association
P.O. Box 407090
Fort Lauderdale, Florida 33340-7090
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
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(ii) if by hand-delivery, courier service or telecopy:
NationsBank, National Association
One Financial Plaza
10th Floor
Fort Lauderdale, Florida 33394
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to SECTION 2.3, 2.5, 2.6 or 2.7 shall not be effective
until received.
9.3. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right remedy, power or privilege hereunder or under the other Credit Documents
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or future
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Credit Documents and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall, except as otherwise specifically limited therein, survive the
execution and delivery of this Agreement and the Notes and the making of the
Loans hereunder.
9.5. PAYMENT OF EXPENSES AND TAXES. The Borrower agrees to: (a) pay all
reasonable out-of-pocket costs and expenses of (i) the Administrative Agent,
whether or not the transactions herein contemplated are consummated, in
connection with the negotiation, preparation, execution and delivery of the
Operative Agreements and the documents and instruments referred to therein and
any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of counsel for the Agent) and
(ii) the Administrative Agent and each of the Lenders in connection with the
enforcement of the Operative Agreements and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Administrative Agent and for each of the
Lenders) and (b) pay and hold each of the Lenders harmless from and against any
and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes.
9.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may
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not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
9.7. PARTICIPATIONS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, the Notes held by such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Operative Agreements; PROVIDED that any such sale
of a participating interest shall be in a principal amount of at least
$5,000,000. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement and the Notes, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the Notes. In no event shall any Participant have any right to approve any
amendment or waiver of any provision of this Agreement or any other Operative
Agreement, or any consent to any departure by the Borrower or any other Person
therefrom, except to the extent that such amendment, waiver or consent would (a)
reduce the principal of, or interest on, any Loan or Note, or postpone the date
of the final maturity of any Loan or Note, or reduce the amount of any Unused
Fee, in each case to the extent subject to such participation or (b) release all
or substantially all of the Collateral.
9.8. ASSIGNMENTS; ADDITIONAL COMMITMENT.
(a) Any Lender may, in accordance with applicable law, at
any time and from time to time assign to any Lender or any affiliate of
any Lender or, with the consent (subject to SECTION 11.1 of the
Participation Agreement) of the Borrower and the Administrative Agent
(which in each case shall not be unreasonably withheld, conditioned or
delayed), to an additional bank, financial institution or other entity
that (i) is either organized under the laws of the United States or any
state thereof or is a foreign bank that operates a branch office in the
United States and (ii) in either case, is not the Lessee or any
affiliate of the Lessee, (each such permitted assignee being referred
to as a "Purchasing Lender"), all or any part of its rights and
obligations under this Agreement and the other Operative Agreements
pursuant to an Assignment and Acceptance, substantially in the form of
EXHIBIT C, executed by such Purchasing Lender, such assigning Lender
(and, in the case of a Purchasing Lender that is not a Lender or an
affiliate thereof, subject to SECTION 11.1 of the Participation
Agreement, by the Borrower and the Administrative Agent) and delivered
to the Administrative Agent for its acceptance and recording in the
Register; PROVIDED that no such assignment to a Purchasing Lender
(other than any Lender or any affiliate thereof) of the Commitments
hereunder shall be in an aggregate principal amount less than
$5,000,000 (other than in the case of an assignment of all of a
Lender's interests under this Agreement and the Notes), and PROVIDED
FURTHER that the assigning Lender shall simultaneously assign to the
same Purchasing Lender the same percentage of the assigning Lender's
rights and obligations under each of the Operative Agreements (with
respect to each of the Series A Loans and the Series B Loans). Upon
such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance,
(x) the Purchasing Lender
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thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the assigning
Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all of the
remaining portion of an assigning Lender's rights and obligations under
this Agreement, such assigning Lender shall cease to be a party
hereto). Notwithstanding anything to the contrary in this Agreement,
the consent of the Borrower shall not be required, and, unless
requested by the relevant Purchasing Lender or assigning Lender, new
Notes shall not be required to be executed and delivered by the
Borrower, for any assignment which occurs at any time when any of the
events described in SECTION 6(G) shall have occurred and be continuing.
(b) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and a Purchasing Lender (and, in the
case of a Purchasing Lender that is not a Lender or an affiliate
thereof, by the Borrower and the Administrative Agent) together with
payment to the Administrative Agent of a registration and processing
fee of $3,500 (which shall not be payable by the Borrower, except in
connection with an assignment requested in accordance with SECTION
2.14(B)), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) promptly after the effective date
determined pursuant thereto, record the information contained therein
in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower on or prior to such effective date, the
Borrower, at its own expense, shall execute and deliver to the
Administrative Agent new Notes (in exchange for the Notes of the
assigning Lender), each in an amount equal to the Commitment assumed or
Loans purchased by the relevant Purchasing Lender pursuant to such
Assignment and Acceptance, and, if the assigning Lender has retained a
Commitment or any Loan hereunder, new Notes to the order of the
assigning Lender, each in an amount equal to the Commitment or Loans
retained by it hereunder. Such new Notes shall be dated the Effective
Date and shall otherwise be in the form of the Notes replaced thereby.
(c) Each Purchasing Lender (other than any Lender organized
and existing under the laws of the U.S. or any state thereof, or any
political subdivision of the U.S. or of any such state), by executing
and delivering an Assignment and Acceptance,
(i) agrees to execute and deliver to the
Administrative Agent, as promptly as practicable, four
signed copies (two for the Administrative Agent and two for
delivery by the Administrative Agent to the Borrower) of IRS
Form 1001, Form 4224 or Form W-8 (or any successor form or
comparable form) claiming complete exemption from
withholding and deduction for or on account of U.S. Federal
taxes on or in respect of payments of principal and interest
under or in respect of this Agreement (it being understood
that if the applicable form is not so delivered, payments
under or in respect of this Agreement may be subject to
withholding and deduction);
(ii) represents and warrants to the Borrower and
the Administrative Agent that the form so delivered is true
and accurate and that, as of the effective
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date of the applicable Assignment and Acceptance, each of
such Purchasing Lender's Lending Offices is entitled to
receive payments of principal and interest under or in
respect of this Agreement without withholding or deduction
for or on account of any taxes imposed by the U.S. Federal
government;
(iii) agrees to deliver annually hereafter to each
of the Borrower and the Administrative Agent not later than
December 31 of the year preceding the year to which it will
apply, two further properly completed signed copies of IRS
Form 1001, Form 4224 or Form W-8 (or any successor form or
comparable form), as appropriate, unless an event has
occurred which renders the relevant form inapplicable (it
being understood that if the applicable form is not so
delivered, payments under or in respect of this Agreement
may be subject to withholding and deduction);
(iv) agrees to promptly notify the Borrower and the
Administrative Agent in writing if it ceases to be entitled
to receive payments of principal and interest under or in
respect of this Agreement without withholding or deduction
for or on account of any taxes imposed by the U.S. or any
political subdivision in or of the U.S. (it being understood
that payments under or in respect of this Agreement may be
subject to withholding and deduction in such event);
(v) acknowledges that in the event it ceases to be
exempt from withholding or deduction of such taxes, the
Administrative Agent may withhold or deduct the applicable
amount from any payments to which such assignee Lender would
otherwise be entitled, without any liability to such
assignee Lender therefor; and
(vi) agrees to indemnify the Borrower and the
Administrative Agent from and against any and all
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs or expenses that result
from such assignee Lender's breach of any such
representation, warranty or agreement.
(d) Any Lender party to this Agreement may, from time to
time and without the consent of the Borrower or any other Person,
pledge or assign for security purposes any portion of its Loans or any
other interests in this Agreement and the other Credit Documents to any
Federal Reserve Bank.
9.9. THE REGISTER; DISCLOSURE. The Administrative Agent shall maintain
at its address referred to in SECTION 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders, the Commitments of the Lenders, and
the principal amount of the Loans by Series owing to each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of clearly
demonstrable error, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register as the owner of the
Loan recorded therein for all purposes of this Agreement. The
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Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable notice.
9.10. ADJUSTMENTS; SET-OFF.
(a) If any Lender (a "BENEFITTED LENDER") shall at any time
receive any payment of all or part of its Loans, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in SECTION 6(G), or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loans, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefitted Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders as to
each Category of Loans; PROVIDED, HOWEVER, that if all or any portion
of such excess payment or benefit is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
without interest. The Borrower agrees that any Lender so purchasing a
participation from a Lender pursuant to this SECTION 9.10 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Person were the direct creditor of the Borrower in the
amount of such participation.
(b) In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default, each of the
Administrative Agent and each Lender is hereby authorized at any time
or from time to time, without presentment, demand, protest or other
notice of any kind to the Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by the Administrative Agent or
such Lender (including, without limitation, by branches and agencies of
the Administrative Agent or such Lender wherever located) to or for the
credit or the account of the Borrower against and on account of the
obligations and liabilities of the Borrower to the Administrative Agent
or such Lender under this Agreement or under any of the other Operative
Agreements, including, without limitation, all interests in obligations
of the Borrower purchased by any such Lender pursuant to SECTION
9.10(A), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Operative Agreement,
irrespective or whether or not the Administrative Agent or such Lender
shall have made any demand and although said obligations, liabilities
or claims, or any of them, shall be contingent or unmatured.
9.11. COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telefacsimile), and all of said counterparts taken together shall be deemed
to constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
33
<PAGE>
9.12. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.13. INTEGRATION. This Agreement and the other Operative Documents
represent the agreement of the Borrower, the Administrative Agent, and the
Lenders with respect to the subject mater hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Operative Documents.
9.14. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA,
WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS.
(b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND
FOR ANY COUNTERCLAIM THEREIN.
9.15. SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Credit Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of Florida and the courts of the United
States of America, in each case sitting in Broward County, Florida, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same,
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail) postage
prepaid, to the Borrower at its address set forth in SECTION 9.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
34
<PAGE>
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this SECTION 9.15 any special, exemplary, punitive or
consequential damages.
9.16. ACKNOWLEDGMENTS. Borrower hereby acknowledges that:
(a) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Credit Documents,
and the relationship between the Administrative Agent and the Lenders,
on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(b) no joint venture is created hereby or by the other
Credit Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
9.17. NONRECOURSE. Anything to the contrary contained in this Agreement
or in any other Operative Agreement notwithstanding, neither the Borrower nor
any Holder nor any officer, director or shareholder thereof, nor any of the
Borrower's successors or assigns (all such Persons being hereinafter referred to
collectively as the "Exculpated Persons"), shall be liable in its individual
capacity in any respect for any liability or obligation hereunder or under any
other Operative Agreement including the payment of the principal of, or interest
on, the Notes, or for monetary damages for the breach of performance of any of
the covenants contained in this Agreement, the Notes or any of the other
Operative Agreements. The Administrative Agent and the Lenders agree that, in
the event any of them pursues any remedies available to them under this
Agreement, the Notes or any other Operative Agreement, neither the
Administrative Agent nor the Lenders shall have any recourse against the
Borrower, in its individual capacity, nor any other Exculpated Person, for any
deficiency, loss or claim for monetary damages or otherwise resulting therefrom
and recourse shall be had solely and exclusively against the Trust Estate and
the Lessee; but nothing contained herein shall be taken to prevent recourse
against or the enforcement of remedies against the Trust Estate in respect of
any and all liabilities, obligations and undertakings contained in this
Agreement, the Notes or any other Operative Agreement. Notwithstanding the
provisions of this Section, nothing in this Agreement, the Participation
Agreement, the Notes, the Security Agreement, the Mortgage Instruments or any
other Operative Agreement shall: (a) constitute a waiver, release or discharge
of any indebtedness or obligation evidenced by the Notes or arising under this
Agreement, the Security Agreement, the Mortgage Instruments or the Participation
Agreement or secured by the Security Agreement, the Mortgage Instruments or any
other Operative Agreement, but the same shall continue until paid or discharged;
(b) relieve the Lessor or any Exculpated Person from liability and
responsibility for (but only to the extent of the damages arising by reason of):
(i) active waste knowingly committed by the Lessor or any Exculpated Person with
respect to the Properties or (ii) any fraud, gross negligence, willful
misconduct or willful breach on the part of the Lessor or any such
35
<PAGE>
Exculpated Person; (c) relieve the Lessor or any Exculpated Person from
liability and responsibility for (but only to the extent of the moneys
misappropriated, misapplied or not turned over) (i) misappropriation or
misapplication by the Lessor (i.e., application in a manner contrary to any
Operative Agreement) of any insurance proceeds or condemnation award paid or
delivered to the Lessor by any Person other than the Agent, (ii) any deposits or
any escrows or amounts owed by the Lessee under the Agency Agreement held by the
Lessor or (iii) any rents or other income received by the Lessor from the Lessee
that are not turned over to the Agent; or (d) affect or in any way limit the
Agent's rights and remedies under any Operative Agreement with respect to the
Rents and its rights and powers thereunder or to obtain a judgment against the
Lessor's interest in the Properties.
9.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision herein,
the aggregate interest rate charged under any of the Notes, including all
charges or fees in connection therewith deemed in the nature of interest under
applicable law shall not exceed the Highest Lawful Rate (as such term is defined
below). If the rate of interest (determined without regard to the preceding
sentence) under this Agreement or any other Operative Agreement at any time
exceeds the Highest Lawful Rate (as defined below), the outstanding amount of
the Loans made hereunder shall bear interest at the Highest Lawful Rate until
the total amount of interest due hereunder equals the amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement and the other Operative Agreements had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder and under the other Operative Agreements (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder and thereunder if the stated rates of interest set
forth in this Agreement and in such Operative Agreements had at all times been
in effect, then to the extent permitted by law, the Borrower shall pay to the
Agent an amount equal to the difference between the amount of interest paid and
the amount of interest which would have been paid if the Highest Lawful Rate had
at all times been in effect. Notwithstanding the foregoing, it is the intention
of the Lenders and the Borrower to conform strictly to any applicable usury
laws. Accordingly, if any Lender contracts for, charges, or receives any
consideration which constitutes interest in excess of the Highest Lawful Rate,
then any such excess shall be cancelled automatically and, if previously paid,
shall at such Lender's option be applied to the outstanding amount of the Loans
made hereunder or be refunded to the Borrower. As used in this paragraph, the
term "Highest Lawful Rate" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to such Lender which are presently in effect or, to
the extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
[Remainder of page intentionally left blank.]
36
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, NOT INDIVIDUALLY EXCEPT AS
EXPRESSLY STATED HEREIN, BUT SOLELY AS OWNER
TRUSTEE FOR THE AVIATION SALES TRUST 1998-1
By:______________________________________________
Name:____________________________________________
Title:___________________________________________
SIGNATURE PAGE 1 OF 2
<PAGE>
LENDERS:
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent, and as a Lender
By:_____________________________________
Name: __________________________________
Title: _________________________________
SIGNATURE PAGE 2 OF 2
<PAGE>
SCHEDULE 1.2
SERIES A SERIES B
NAME OF LENDER COMMITMENT COMMITMENT
- -------------- ---------- ----------
NationsBank, National
Association $31,252,056 $ 3,196,233
<PAGE>
EXHIBIT A
SERIES A NOTE
$__________________ ____________________
December ___, 1998
FOR VALUE RECEIVED, the undersigned, FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as Owner Trustee for the
Aviation Sales Trust 1998-1 (the "BORROWER"), hereby unconditionally promises to
pay to the order of NATIONSBANK, NATIONAL ASSOCIATION (the "LENDER") at the
office of NationsBank, National Association, as Administrative Agent, located at
Independence Center, 15th Floor, Charlotte, North Carolina 28255 in lawful money
of the United States of America and in immediately available funds, on the
Maturity Date, the principal amount of
(__________________________________________DOLLARS ($_____________), or, if
less, (b) the aggregate unpaid principal amount of all Series A Loans made by
the Lender to the Borrower pursuant to SECTION 2.1 of the Credit Agreement (as
defined below). The Borrower further agrees to pay interest in like money at
such office on the unpaid principal amount hereof from time to time outstanding
at the rates and on the dates specified in SECTION 2.8 of such Credit Agreement.
The Borrower further agrees to pay all other amounts owing to the Lender
pursuant to the Credit Agreement or any other Credit Document (as defined in the
Credit Agreement).
The holder of this Series A Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Series A Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof and each conversion of all or a portion thereof to another Type. Each
such endorsement shall constitute PRIMA FACIE evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
such endorsement shall not affect the obligations of the Borrower in respect of
such Loan.
This Series A Note (a) is one of the Series A Notes referred to in the
Credit Agreement dated as of December 17, 1998 (as amended, supplemented,
restated or otherwise modified from time to time, the "CREDIT AGREEMENT"), among
the Borrower, the Lender, the other banks and financial institutions from time
to time parties thereto, and NationsBank, National Association, as
Administrative Agent, (b) is subject to the provisions of the Credit Agreement
(including, without limitation, SECTION 9.18 thereof) and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. Capitalized terms not otherwise defined herein shall have the
respective meanings assigned in the Credit Agreement. Reference is hereby made
to the Credit Documents for a description of the properties and assets in which
a security interest has been granted, the nature and extent of the security and
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Series A Note
in respect thereof.
<PAGE>
Upon the occurrence of any Event of Default, all amounts then remaining
unpaid on this Series A Note shall become, or may be declared to be, immediately
due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as Owner
Trustee for the Aviation Sales Trust 1998-1
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
<PAGE>
EXHIBIT B
SERIES B NOTE
$_______________ ____________________
December ___, 1998
FOR VALUE RECEIVED, the undersigned, FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as Owner Trustee for the
Aviation Sales Trust 1998-1 (the "BORROWER"), hereby unconditionally promises to
pay to the order of NATIONSBANK, NATIONAL ASSOCIATION (the "LENDER") at the
office of NationsBank, National Association, as Administrative Agent, located at
Independence Center, 15th Floor, Charlotte, North Carolina 28255, in lawful
money of the United States of America and in immediately available funds, on the
Maturity Date, the principal amount of (a) _________________________________
DOLLARS ($____________), or, if less, (b) the aggregate unpaid principal amount
of all Series B Loans made by the Lender to the Borrower pursuant to SECTION 2.1
of the Credit Agreement (as defined below). The Borrower further agrees to pay
interest in like money at such office on the unpaid principal amount hereof from
time to time outstanding at the rates and on the dates specified in SECTION 2.8
of such Credit Agreement. The Borrower further agrees to pay all other amounts
owing to the Lender pursuant to the Credit Agreement or any other Credit
Document (as defined in the Credit Agreement).
The holder of this Series B Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Series B Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof and each conversion of all or a portion thereof to another Type. Each
such endorsement shall constitute PRIMA FACIE evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
such endorsement shall not affect the obligations of the Borrower in respect of
such Loan.
This Series B Note (a) is one of the Series B Notes referred to in the
Credit Agreement dated as of December 17, 1998 (as amended, supplemented,
restated or otherwise modified from time to time, the "CREDIT AGREEMENT"), among
the Borrower, the Lender, the other banks and financial institutions from time
to time parties thereto, and NationsBank, National Association, as
Administrative Agent, (b) is subject to the provisions of the Credit Agreement
(including, without limitation, SECTION 9.18 thereof) and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. Capitalized terms not otherwise defined herein shall have the
respective meanings assigned in the Credit Agreement. Reference is hereby made
to the Credit Documents for a description of the properties and assets in which
a security interest has been granted, the nature and extent of the security and
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Series B Note
in respect thereof.
<PAGE>
Upon the occurrence of any Event of Default, all amounts then remaining
unpaid on this Series B Note shall become, or may be declared to be, immediately
due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as Owner
Trustee for the Aviation Sales Trust 1998-1
By:_______________________________________________
Name:_____________________________________________
Title:____________________________________________
<PAGE>
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Reference is made to (a) the Credit Agreement, dated as of December 17,
1998 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), restated among First Security Bank, National Association,
not in its individual capacity, but solely as Owner Trustee (the "OWNER TRUSTEE"
or the "BORROWER"), the Lenders named therein, and NationsBank, National
Association, as Administrative Agent [(b) the Amended and Restated Trust
Agreement dated as of December 17, 1998 (as amended, supplemented, restated or
otherwise modified from time to time, the "Trust Agreement"), among the Holders
party thereto and the Owner Trustee]. Unless otherwise defined herein, terms
defined in the Credit Agreement [(or if not defined therein, then the Trust
Agreement)] and used herein shall have the meanings given to them in the Credit
Agreement [(or the Trust Agreement, as the case may be)].
__________________ (the "ASSIGNOR") and __________________ (the
"ASSIGNEE") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), an interest (the "ASSIGNED INTEREST") in and
to (A) the Assignor's rights and obligations under the Credit Agreement with
respect to the credit facilities contained in the Credit Agreement as are set
forth on Schedule 1 hereto (collectively, the "ASSIGNED FACILITY"), in the
respective principal amount for the Assigned Facility as set forth on Schedule
1; [(B) the Assignor's rights and obligations as a Holder under the Trust
Agreement, in the respective Holder Advance and Holder Commitment Amounts set
forth on Schedule 1].
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement, [the Trust Agreement,] any
other Operative Agreement, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, [the Trust
Agreement,] any other Operative Agreement, or any other instrument or document
furnished pursuant thereto, other than that it has not created any adverse claim
upon the interest being assigned by it hereunder and that such interest is free
and clear of any such adverse claim; (b) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any other obligor or the performance or observance by the Borrower
or any other obligor of any of their respective obligations under the Credit
Agreement, [the Trust Agreement], any other Operative Agreement, or any other
instrument or document furnished pursuant hereto or thereto; (c) attaches the
Series A Note and the Series B Note held by it evidencing the Assigned Facility,
[and the Certificate held by it,] and requests that the Administrative Agent
exchange each such Note [and such Certificate] for a new Note of like Series
payable to the Assignee, [and a new Certificate in the name of Assignee] and (if
the Assignor has retained any interest in the Assigned Facility [and interest as
a Holder]) a new Note of such Series payable to the Assignor in the
<PAGE>
respective amounts which reflect the assignment being made hereby (and after
giving effect to any other assignments which have become effective on the
Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received copies of the Operative Agreements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Administrative Agent
or any other Lender [or Holder] and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement, [the Trust
Agreement,] other Operative Agreements, or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agent as defined in each of the Operative Agreements) to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement, the other Operative Agreements, or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the Participation Agreement, [and] the Credit Agreement [and the Trust
Agreement] and will perform in accordance with their terms all the obligations
which by the terms of the Participation Agreement, [and] the Credit Agreement
[and the Trust Agreement] are required to be performed by it as a Lender [or a
Holder] including, if it is organized under the laws of a jurisdiction outside
the U.S., its obligations pursuant to SECTION 2.13(B) of the Participation
Agreement, SECTION 9.8 of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be
__________, 19__ (the "EFFECTIVE DATE"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by it in the manner provided pursuant to SECTION 9.9 of
the Credit Agreement effective as of the Effective Date.
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees, [Holder
Fundings, Holder Yield] and other amounts) to the Assignee whether such amounts
have accrued prior to the Effective Date or accrue subsequent to the Effective
Date. The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a party
to the Credit Agreement, [and the Trust Agreement] and to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender [or
a Holder] thereunder and under the other Operative Agreements and shall be bound
by the provisions thereof and (b) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement, [Trust Agreement] and the other
Operative Agreements.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of Florida.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
ASSIGNOR:
[NAME OF ASSIGNOR]
By:_______________________________________
Name:_____________________________________
Title:____________________________________
ASSIGNEE:
[NAME OF ASSIGNEE]
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Consent to:
AVIATION SALES COMPANY
By:_____________________________
Name:____________________________
Title:___________________________
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:_____________________________
Name:____________________________
Title:___________________________
EXHIBIT 10.2
LEASE AGREEMENT
Dated as of December 17, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as Owner Trustee
under the Aviation Sales Trust 1998-1
as Lessor
and
AVIATION SALES COMPANY, as Lessee
- -----------------------------------------------------------------
This Lease Agreement is subject to a security interest in favor of NationsBank,
National Association, as Administrative Agent (the "Agent") under a Security
Agreement dated as of December 17, 1998, among First Security Bank, National
Association, not individually except as expressly stated therein, but solely as
Owner Trustee under the Aviation Sales Trust 1998-1, the Lenders and the Agent,
as amended, modified, supplemented, restated or replaced from time to time. This
Lease Agreement has been executed in several counterparts. To the extent, if
any, that this Lease Agreement constitutes chattel paper (as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no security interest in this Lease Agreement may be created
through the transfer or possession of any counterpart other than the original
counterpart containing the receipt therefor executed by the Agent on the
signature page hereof.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I.........................................................................................................1
1.1 Definitions.................................................................................1
ARTICLE II........................................................................................................1
2.1 Property....................................................................................1
2.2 Lease Term..................................................................................2
2.3 Title.......................................................................................2
2.4 Lease Supplements...........................................................................2
ARTICLE III.......................................................................................................2
3.1 Rent........................................................................................2
3.2 Payment of Basic Rent.......................................................................3
3.3 Supplemental Rent...........................................................................3
3.4 Performance on a Non-Business Day...........................................................3
3.5 Rent Payment Provisions.....................................................................3
ARTICLE IV........................................................................................................4
4.1 Utility Charges; Taxes......................................................................4
ARTICLE V.........................................................................................................4
5.1 Quiet Enjoyment.............................................................................4
ARTICLE VI........................................................................................................4
6.1 Net Lease...................................................................................4
6.2 No Termination or Abatement.................................................................5
ARTICLE VII.......................................................................................................5
7.1 Ownership of the Properties.................................................................5
ARTICLE VIII......................................................................................................6
8.1 Condition of the Properties.................................................................6
8.2 Possession and Use of the Properties........................................................7
ARTICLE IX........................................................................................................8
9.1 Compliance with Legal Requirements and Insurance Requirements...............................8
ARTICLE X.........................................................................................................8
10.1 Maintenance and Repair; Return..............................................................8
10.2 Environmental Inspection....................................................................9
ARTICLE XI.......................................................................................................10
11.1 Modifications..............................................................................10
</TABLE>
i
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<TABLE>
<S> <C>
ARTICLE XII......................................................................................................11
12.1 Warranty of Title..........................................................................11
ARTICLE XIII.....................................................................................................11
13.1 Permitted Contests Other Than in Respect of Indemnities....................................11
ARTICLE XIV......................................................................................................12
14.1 Public Liability and Workers' Compensation Insurance.......................................12
14.2 Hazard and Other Insurance.................................................................12
14.3 Coverage...................................................................................13
14.4 Additional Insurance Requirements..........................................................13
ARTICLE XV.......................................................................................................14
15.1 Casualty and Condemnation..................................................................14
15.2 Environmental Matters......................................................................15
15.3 Notice of Environmental Matters............................................................16
ARTICLE XVI......................................................................................................16
16.1 Termination Upon Certain Events............................................................16
16.2 Procedures.................................................................................16
ARTICLE XVII.....................................................................................................17
17.1 Lease Events of Default....................................................................17
17.2 Surrender of Possession....................................................................19
17.3 Reletting..................................................................................19
17.4 Damages....................................................................................19
17.5 Final Liquidated Damages...................................................................20
17.6 Waiver of Certain Rights...................................................................21
17.7 Assignment of Rights Under Contracts.......................................................21
17.8 Environmental Costs........................................................................21
17.9 Remedies Cumulative........................................................................21
17.10 Notice of Default or Event of Default......................................................21
ARTICLE XVIII....................................................................................................21
18.1 Lessor's Right to Cure Lessee's Lease Defaults.............................................21
ARTICLE XIX......................................................................................................22
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option............................22
19.2 No Termination With Respect to Less than All of a Property.................................22
ARTICLE XX.......................................................................................................22
20.1 Purchase Prior to End of Term; Purchase or Sale Option at End of Term......................22
20.2 Accounting Changes.........................................................................23
</TABLE>
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<PAGE>
<TABLE>
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ARTICLE XXI......................................................................................................24
[INTENTIONALLY LEFT BLANK.].............................................................................24
ARTICLE XXII.....................................................................................................24
22.1 Sale Procedure.............................................................................24
22.2 Application of Proceeds of Sale............................................................26
22.3 Indemnity for Excessive Wear...............................................................26
22.4 Appraisal Procedure........................................................................26
22.5 Certain Obligations Continue...............................................................27
ARTICLE XXIII....................................................................................................27
23.1 Holding Over...............................................................................27
ARTICLE XXIV.....................................................................................................27
24.1 Risk of Loss...............................................................................27
ARTICLE XXV......................................................................................................28
25.1 Assignment.................................................................................28
25.2 Subleases..................................................................................28
ARTICLE XXVI.....................................................................................................29
26.1 No Waiver..................................................................................29
ARTICLE XXVII....................................................................................................29
27.1 Acceptance of Surrender....................................................................29
27.2 No Merger of Title.........................................................................29
ARTICLE XXVIII...................................................................................................29
28.1 Reporting Covenants........................................................................29
28.2 Affirmative Covenants......................................................................37
28.3 Negative Covenants.........................................................................39
28.4 Financial Covenants........................................................................42
ARTICLE XXIX.....................................................................................................43
29.1 Notices....................................................................................43
ARTICLE XXX......................................................................................................45
30.1 Miscellaneous..............................................................................45
30.2 Amendments and Modifications...............................................................45
30.3 Successors and Assigns.....................................................................45
30.4 Headings and Table of Contents.............................................................45
30.5 Counterparts...............................................................................45
30.6 GOVERNING LAW..............................................................................45
30.7 Calculation of Rent........................................................................45
30.8 Memoranda of Lease and Lease Supplements...................................................45
</TABLE>
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<TABLE>
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30.9 Allocations between the Lenders and the Holders............................................45
30.10 Limitations on Recourse....................................................................46
30.11 WAIVERS OF JURY TRIAL......................................................................46
30.12 Original Leases............................................................................46
30.13 Mortgage Grant and Remedies................................................................46
30.14 Exercise of Lessor Rights..................................................................46
EXHIBITS.........................................................................................................38
EXHIBIT A Lease Supplement No. __............................................................38
EXHIBIT B Form of Memorandum of Lease and Lease Supplement...................................48
EXHIBIT C Form of Compliance Certificate.....................................................48
SCHEDULES........................................................................................................38
Schedule I Litigation.........................................................................38
</TABLE>
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LEASE AGREEMENT
THIS LEASE AGREEMENT (as amended, supplemented or modified from time to
time, this "Lease"), dated as of December 17, 1998, is between FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, having its principal
office at 79 South Main Street, Salt Lake City, Utah 84111, not individually,
but solely as Owner Trustee under the Aviation Sales Trust 1998-1, as lessor
(the "Lessor"), and AVIATION SALES COMPANY, a Delaware corporation, having its
principal place of business at 6905 NW 25th Street, Miami, Florida 33122 as
lessee (the "Lessee").
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and Agency Agreement, Lessor will (i) purchase or ground lease various
parcels of real property, some of which may have existing Improvements thereon,
from one or more third parties designated by the Construction Agent and (ii)
fund the development, refurbishment, installation and construction by the
Construction Agent of Improvements on such real property; and
B. WHEREAS, the Basic Term shall commence with respect to each Property
upon the date set forth in SECTION 2.2 hereof; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS. Capitalized terms used but not otherwise defined in
this Lease have the respective meanings specified in APPENDIX A to the
Participation Agreement of even date herewith (as such may be amended, modified,
supplemented, restated and/or replaced from time to time, the "Participation
Agreement") among Aviation Sales Company, as Construction Agent, the Lessee,
First Security Bank, National Association, not individually, except as expressly
stated therein, as Owner Trustee under the Aviation Sales Trust 1998-1, the
Holders party thereto, the Lenders party thereto, and the Agent.
ARTICLE II
2.1 PROPERTY. Subject to the terms and conditions hereinafter set forth
and contained in the respective Lease Supplement relating to each Property,
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, each
Property.
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2.2 LEASE TERM. The term of this Lease with respect to each Property
(the "Basic Term" or "Term") shall begin upon the earlier to occur of (i) the
Property Closing Date for such Property or (ii) the date the Lessor takes title
to such Property (such earlier date being referred to as the "Basic Term
Commencement Date" or the "Term Commencement Date" for such Property) and shall
end on December 17, 2003 (the "Basic Term Expiration Date"), unless the Term is
earlier terminated in accordance with the provisions of this Lease.
2.3 TITLE. Each Property is leased to Lessee without any representation
or warranty, express or implied, by Lessor and subject to the rights of parties
in possession (if any), the existing state of title (including, without
limitation, the Permitted Exceptions) and all applicable Legal Requirements.
Lessee shall in no event have any recourse against Lessor for any defect in
Lessor's title to any Property other than for Lessor Liens.
2.4 LEASE SUPPLEMENTS. On or prior to each Basic Term Commencement
Date, Lessee and Lessor shall each execute and deliver a Lease Supplement for
the Property to be leased effective as of such Basic Term Commencement Date in
substantially the form of EXHIBIT A hereto. Lessee hereby irrevocably appoints
Lessor as Lessee's attorney-in-fact, with power of substitution, in the name of
Lessor or the name of Lessee or otherwise, to execute any Lease Supplement which
Lessee fails or refuses to sign in accordance with the terms of this SECTION
2.4.
ARTICLE III
3.1 RENT.
(a) Lessee shall pay Basic Rent on each Payment Date, and on
any date on which this Lease shall terminate with respect to any or all
Properties during the Term; provided, however, with respect to each
individual Property Lessee shall have no obligation to pay Basic Rent
with respect to such Property until the earlier of (i) the Completion
Date for such Property or (ii) if such Property is a Construction
Period Property as of the date of any Agency Agreement Event of
Default, the date of such Agency Agreement Event of Default (in each
case, such earlier date being referred to as the "Basic Rent
Commencement Date").
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid in immediately available funds on the
due date therefor (or within the applicable grace period) to such
account or accounts as Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of the Lessor, the Construction
Agent, Lessee, or any other Person, or for any other reason whatsoever,
shall not delay or otherwise affect Lessee's obligation to pay Rent for
such Property in accordance with the terms of this Lease.
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3.2 PAYMENT OF BASIC RENT. Basic Rent shall be paid absolutely net to
Lessor or its designee, so that this Lease shall yield to Lessor the full amount
of Basic Rent, without setoff, deduction or reduction.
3.3 SUPPLEMENTAL RENT. Lessee shall pay to Lessor or its designee or to
the Person entitled thereto any and all Supplemental Rent promptly as the same
shall become due and payable, and if Lessee fails to pay any Supplemental Rent,
Lessor shall have all rights, powers and remedies provided for herein or by law
or equity or otherwise in the case of nonpayment of Basic Rent. Without limiting
the generality of the definition of "Supplemental Rent," Lessee shall pay to
Lessor as Supplemental Rent, among other things, on demand, to the extent
permitted by applicable Legal Requirements, (a) any and all unpaid Unused Fees,
Holder Unused Fees, Owner Trustee fees, other fees, charges, prepayment
penalties, Taxes, insurance costs, indemnities, expenses, payments and other
obligations (except the obligations of Lessor to pay the principal amount of the
Loans and the Holder Amount) due and owing by Lessor under the Credit Agreement,
the Trust Agreement or any other Operative Agreement (including specifically
without limitation any amounts owing to the Lenders under SECTION 2.11 or
SECTION 2.12 of the Credit Agreement and any amounts owing to the Holders under
SECTION 3.9 or SECTION 3.10 of the Trust Agreement) and (b) interest at the
applicable Overdue Rate on any installment of Basic Rent not paid when due
(subject to the applicable grace period) for the period for which the same shall
be overdue and on any payment of Supplemental Rent not paid when due or demanded
by the appropriate Person for the period from the due date or the date of any
such demand, as the case may be, until the same shall be paid. The expiration or
other termination of Lessee's obligations to pay Basic Rent hereunder shall not
limit or modify the obligations of Lessee with respect to Supplemental Rent.
Unless expressly provided otherwise in this Lease, in the event of any failure
on the part of Lessee to pay and discharge any Supplemental Rent as and when
due, Lessee shall also promptly pay and discharge any fine, penalty, interest or
cost which may be assessed or added, pursuant to any Operative Agreement or
otherwise, in each case for nonpayment or late payment of such Supplemental
Rent, all of which shall also constitute Supplemental Rent.
3.4 PERFORMANCE ON A NON-BUSINESS DAY. If any Basic Rent is required
hereunder on a day that is not a Business Day, then such Basic Rent shall be due
on the corresponding Scheduled Interest Payment Date. If any Supplemental Rent
is required hereunder on a day that is not a Business Day, then such
Supplemental Rent shall be due on the next succeeding Business Day.
3.5 RENT PAYMENT PROVISIONS. Lessee shall make payment of all Basic
Rent and Supplemental Rent when due regardless of whether any of the Operative
Agreements pursuant to which same is calculated and is owing shall have been
rejected, avoided or disavowed in any bankruptcy or insolvency proceeding
involving any of the parties to any of the Operative Agreements. Such provisions
of such Operative Agreements and their related definitions are incorporated
herein by reference and shall survive any termination, amendment or rejection of
any such Operative Agreements.
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ARTICLE IV
4.1 UTILITY CHARGES; TAXES. Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on a Property and related
real property during the Term. Lessee shall be entitled to receive any credit or
refund with respect to any utility charge paid by Lessee, PROVIDED THAT Lessee
must collect any such credit or refund from Lessor or the respective utility
company (as the case may be) and shall not be entitled to offset any such amount
owed to Lessee against Rent payable by the Lessee hereunder. Unless a Lease
Default or Lease Event of Default shall have occurred and be continuing, the
amount of any credit or refund received by Lessor on account of any utility
charges paid by Lessee, net of the costs and expenses incurred by Lessor in
obtaining such credit or refund, shall be promptly paid over to Lessee. In
addition, Lessee shall pay or cause to be paid all taxes or taxes assessments
against a Property. All charges for utilities and all taxes or tax assessments
imposed with respect to a Property for a billing period (or in the cases of tax
assessments, a tax period) during which this Lease expires or terminates shall
be adjusted and prorated on a daily basis between Lessor and Lessee, and each
party shall pay or reimburse the other for such party's pro rata share thereof.
ARTICLE V
5.1 QUIET ENJOYMENT. Subject to the rights of Lessor contained in
SECTIONS 17.2 AND 17.3 and the other terms of this Lease and the other Operative
Agreements and so long as no Lease Event of Default shall have occurred and be
continuing, Lessee shall peaceably and quietly have, hold and enjoy each
Property for the applicable Term, free of any claim or other action by Lessor or
anyone rightfully claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the applicable Basic Term
Commencement Date.
ARTICLE VI
6.1 NET LEASE. This Lease shall constitute a net lease. Any present or
future law to the contrary notwithstanding, this Lease shall not terminate, nor
shall Lessee be entitled to any abatement, suspension, deferment, reduction,
setoff, counterclaim, or defense with respect to the Rent, nor shall the
obligations of Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) by
reason of: (a) any damage to or destruction of any Property or any part thereof;
(b) any taking of any Property or any part thereof or interest therein by
Condemnation or otherwise; (c) any prohibition, limitation, restriction or
prevention of Lessee's use, occupancy or enjoyment of any Property or any part
thereof, or any interference with such use, occupancy or enjoyment by any Person
or for any other reason; (d) any title defect, Lien or any matter affecting
title to any Property; (e) any eviction by paramount title or otherwise; (f) any
default by Lessor hereunder; (g) any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution or other proceeding relating to or
affecting the Agent, any Lender, Lessor, Lessee, any Holder or any Governmental
Authority; (h) the impossibility or illegality of performance by Lessor, Lessee
or both; (i) any action of any Governmental Authority or any other Person; (j)
Lessee's acquisition of ownership of all or part of any Property; (k) breach of
any warranty or representation with respect to any Property or any Operative
Agreement; (l) any defect in the condition, quality or fitness for use of any
Property or any part thereof; or (m) any other cause or
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circumstance whether similar or dissimilar to the foregoing and whether or not
Lessee shall have notice or knowledge of any of the foregoing. The foregoing
clause (j) shall not prevent the termination of the Lease in accordance with the
terms hereof if the Lessee purchases all of the Properties pursuant to SECTION
20.1. The parties intend that the obligations of Lessee hereunder shall be
covenants, agreements and obligations that are separate and independent from any
obligations of Lessor hereunder and shall continue unaffected unless such
covenants, agreements and obligations shall have been modified or terminated in
accordance with an express provision of this Lease. Lessor and Lessee
acknowledge and agree that the provisions of this SECTION 6.1 have been
specifically reviewed and subject to negotiation.
6.2 NO TERMINATION OR ABATEMENT. Lessee shall remain obligated under
this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting Lessor, any other Person or any Governmental Authority, or
any action with respect to this Lease or any Operative Agreement which may be
taken by any trustee, receiver or liquidator of Lessor, any other Person or any
Governmental Authority or by any court with respect to Lessor, any other Person
or any Governmental Authority. Lessee hereby waives all right (a) to terminate
or surrender this Lease (except as permitted under the terms of the Operative
Agreements) or (b) to avail itself of any abatement, suspension, deferment,
reduction, setoff, counterclaim or defense with respect to any Rent. Lessee
shall remain obligated under this Lease in accordance with its terms and Lessee
hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTIES.
(a) Lessor and Lessee intend that for federal and all state
and local income tax purposes and other tax purposes, for bankruptcy
purposes, creditor's rights purposes, environmental law purposes, for
purposes of exercising remedies against the Lessee, the Construction
Agent or the Properties, and for all other legal purposes (A) this
Lease will be treated as a loan and financing arrangement and not a
true lease, (B) Lessee will be treated as the owner of the Properties
and will be entitled to all tax benefits ordinarily available to owners
of property similar to the Properties for such tax purposes, and (C)
all payments of Basic Rent shall be deemed to be interest payments.
Consistent with the foregoing, Lessee intends to claim depreciation and
cost recovery deductions associated with the Property, and Lessor
agrees not to take any inconsistent position on its income tax returns.
Neither Lessor, the Agent, any Lender, any Holder nor NMS makes any
representation or warranty with respect to the foregoing matters
described in this SECTION 7.1 and will assume no liability for the
Lessee's accounting treatment of this transaction.
(b) Lessor and Lessee further intend and agree that, for the
purpose of securing Lessee's obligations hereunder, (i) this Lease
shall be deemed to be a security agreement and
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financing statement within the meaning of Article 9 of the Uniform
Commercial Code respecting each of the Properties to the extent such is
personal property and an irrevocable grant and conveyance of a lien and
mortgage on each of the Properties to the extent such is real property;
(ii) the acquisition of title (or to the extent applicable, a leasehold
interest) in each Property referenced in ARTICLE II shall be deemed to
be (A) a grant by Lessee to Lessor of a lien on and security interest
in all of Lessee's right, title and interest in and to each Property
and all proceeds (including without limitation insurance proceeds) of
any of the Property, whether in the form of cash, investments,
securities or other property, and (B) an assignment by Lessee to Lessor
of all rents, profits and income produced by any of the Property; and
(iii) notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from financial
intermediaries, bankers or agents (as applicable) of Lessee shall be
deemed to have been given for the purpose of perfecting such security
interest under applicable law. Lessor and Lessee shall promptly take
such actions as may be necessary or advisable in either party's opinion
(including without limitation the filing of Uniform Commercial Code
Financing Statements or Uniform Commercial Code Fixture Filings) to
ensure that the lien and security interest in each Property will be
deemed to be a perfected lien and security interest of first priority
under applicable law and will be maintained as such throughout the
Term.
(c) The Lessor agrees that it will not assert against any
inventory or equipment of the Lessee (other than equipment constituting
Collateral under the Operative Agreements) any statutory or possessory
lien including, without limitation, rights of levy or distraint for
rent, all of which it hereby waives. The foregoing notwithstanding, the
Lessor retains the right to assert any such liens and rights against
any property of the Lessee that constitutes Collateral (including
without limitation any Property, Land, Equipment and Improvements, and
any proceeds of the foregoing).
ARTICLE VIII
8.1 CONDITION OF THE PROPERTIES. LESSEE ACKNOWLEDGES AND AGREES THAT IT
IS LEASING EACH PROPERTY "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY LESSOR AND IN EACH CASE SUBJECT TO (A) THE EXISTING
STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY),
(C) ANY STATE OF FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT
SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL
REQUIREMENTS WHICH MAY EXIST ON THE DATE OF THE APPLICABLE LEASE SUPPLEMENT.
NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER HAS MADE OR SHALL BE
DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE,
VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE OF ANY PROPERTY (OR ANY PART THEREOF), OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR NOR THE AGENT
NOR ANY LENDER NOR ANY HOLDER SHALL BE LIABLE FOR ANY
6
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LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF ANY PROPERTY, OR ANY
PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. THE LESSEE HAS OR WILL HAVE
BEEN AFFORDED FULL OPPORTUNITY TO INSPECT EACH PROPERTY AND THE IMPROVEMENTS
THEREON (IF ANY), IS OR WILL BE (INSOFAR AS THE LESSOR, THE AGENT, EACH LENDER
AND EACH HOLDER ARE CONCERNED) SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND
IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS OF THE RESULTS OF ITS OWN
INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING
SENTENCE, AS BETWEEN THE LESSOR, THE AGENT, THE LENDERS AND THE HOLDERS, ON THE
ONE HAND, AND THE LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.
8.2 POSSESSION AND USE OF THE PROPERTIES.
(a) At all times during the Term with respect to each
Property, such Property shall be used by Lessee in the ordinary course
of its business. Lessee shall pay, or cause to be paid, all charges and
costs required in connection with the use of the Properties as
contemplated by this Lease. Lessee shall not commit or permit any waste
of the Properties or any part thereof.
(b) Lessee represents and warrants that the address stated in
SECTION 29.1 of this Lease is the chief place of business and chief
executive office of Lessee (as such terms are used in Section 9-103 of
the Uniform Commercial Code of any applicable jurisdiction), and Lessee
will provide Lessor with prior written notice of any change of location
of its chief place of business or chief executive office. Regarding
each Property, Lessee represents and warrants that each Lease
Supplement correctly identifies the initial location of the related
Equipment and Improvements and contains an accurate legal description
for the related parcel of Land. Lessee has no other places of business
where the Equipment or Improvements will be located other than those
identified on the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of
Equipment to or in any other item of equipment or personal property or
to or in any real property (except the Land identified in the Lease
Supplement in which such Equipment is also described) in a manner that
could give rise to the assertion of any Lien (other than a Permitted
Lien) on such item of Equipment by reason of such attachment or the
assertion of a claim that such item of Equipment has become a fixture
and is subject to a Lien in favor of a third party that is prior to the
Liens thereon created by the Operative Agreements.
(d) Each Lease Supplement delivered under the terms of this
Lease shall contain, in regard to the relevant Property, an Equipment
Schedule that has a complete description of each item of Equipment, an
Improvement Schedule that has a complete description of each
Improvement and a legal description of the Land, to be leased hereunder
as of such date. Simultaneously with the execution and delivery of each
Lease Supplement, such Equipment, Improvements and Land shall be deemed
to have been accepted by Lessee for all purposes of this Lease and to
be subject to this Lease.
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(e) At all times during the Term with respect to each
Property, Lessee will comply with all obligations under, and (to the
extent no Event of Default has occurred and is continuing and provided
that such exercise will not impair the value of such Property) shall be
permitted to exercise all rights and remedies under, all operation and
easement agreements and related or similar agreements applicable to
such Property.
ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS.
Subject to the terms of ARTICLE XIII relating to permitted contests, Lessee, at
its sole cost and expense, shall (i) comply in all material respects with all
Legal Requirements (including without limitation all Environmental Laws), and
all Insurance Requirements relating to the Properties, including the use,
development, construction, operation, maintenance, repair, refurbishment and
restoration thereof, whether or not compliance therewith shall require
structural or extraordinary changes in the Improvements or interfere with the
use and enjoyment of the Properties, and (ii) procure, maintain and comply in
all material respects with all licenses, permits, orders, approvals, consents
and other authorizations required for the construction, use, maintenance and
operation of the Properties and for the use, development, construction,
operation, maintenance, repair and restoration of the Improvements.
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and make all necessary repairs thereto, of every kind
and nature whatsoever, whether interior or exterior, ordinary or
extraordinary, structural or nonstructural, or foreseen or unforeseen,
in each case as required by all Legal Requirements, Insurance
Requirements, and manufacturer's specifications and standards and on a
basis consistent with the operation and maintenance of properties or
equipment comparable in type and function to the applicable Property
and in compliance with standard industry practice, subject, however, to
the provisions of ARTICLE XV with respect to Condemnation and Casualty.
(b) Lessee shall not use or locate any component of any
Property outside of any Approved State. Lessee shall not move or
relocate any component of any Property beyond the boundaries of the
Land described in the applicable Lease Supplement without Lessor's
prior written consent, which consent shall not be unreasonably withheld
or delayed.
(c) If any material component of any Property becomes worn
out, lost, destroyed, damaged beyond repair or otherwise permanently
rendered unfit for use, Lessee, at its own expense, will within a
reasonable time replace such component with a replacement component
which is free and clear of all Liens (other than Permitted Liens) and
has a value, utility and useful life at least equal to the component
replaced. All components which are added to any Property shall
immediately become the property of, and title thereto shall vest in,
Lessor, and
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shall be deemed incorporated in such Property and subject to the terms
of this Lease as if originally leased hereunder.
(d) Upon reasonable advance notice, Lessor and its agents
shall have the right to inspect each Property and all maintenance
records with respect thereto at any reasonable time during normal
business hours but shall not materially disrupt the business of Lessee.
(e) If, at any time, because of a condemnation, casualty or
other event or condition, Lessor has reason to believe that the
appraised value of any Property has materially decreased, then the
Lessor or the Agent (at Lessee's sole expense) may cause an additional
Appraisal (addressed to the Lessor and the Agent) to be prepared. In
addition, Lessor or the Agent (at Lessee's sole expense) may cause to
be prepared (at Lessee's sole expense) any additional Appraisals (or
reappraisals) as Lessor or the Agent may deem appropriate (i) if an
Event of Default has occurred and is continuing, or (ii) if any one of
Lessor, the Agent, any Lender or any Holder is required pursuant to any
applicable Legal Requirement to obtain such an Appraisal (or
reappraisal).
(f) Lessor shall under no circumstances be required to build
any improvements on any Property, make any repairs, replacements,
alterations or renewals of any nature or description to any Property,
make any expenditure whatsoever in connection with this Lease or
maintain any Property in any way. Lessor shall not be required to
maintain, repair or rebuild all or any part of any Property, and Lessee
waives the right to (i) require Lessor to maintain, repair, or rebuild
all or any part of any Property (unless such repairs are needed to cure
damage to a Property caused by the gross negligence or willful
misconduct of the Lessor), or (ii) make repairs at the expense of
Lessor pursuant to any Legal Requirement, Insurance Requirement,
contract, agreement, covenants, condition or restriction at any time in
effect.
(g) Lessee shall, upon the expiration of the Term or earlier
termination of this Lease with respect to a Property, if Lessee shall
not have exercised its Purchase Option with respect to such Property,
surrender such Property to Lessor, or the third party purchaser, as the
case may be, subject to Lessee's obligations under this Lease
(including without limitation SECTIONS 9.1, 10.1(A)-(F), 10.2, 11.1,
12.1, 22.1 AND 23.1).
10.2 ENVIRONMENTAL INSPECTION. If (a) Lessee has not given notice of
the exercise of its Purchase Option on the Expiration Date pursuant to SECTION
20.1(B), or (b) Lessee has given notice, pursuant to SECTION 20.1(B) of its
election to remarket the Properties on the Expiration Date or a Payment Date
pursuant to SECTION 22.1 then, in either case, not more than one hundred twenty
(120) days nor less than sixty (60) days prior to such Expiration Date or
Payment Date, Lessee shall, at its sole cost and expense, provide to Lessor and
the Agent a report by a reputable environmental consultant selected by Lessee,
which report shall be in form and substance reasonably satisfactory to Lessor
and the Agent and shall include without limitation a "Phase I" environmental
report (or update of a prior "Phase I" report that was previously delivered to
the Lessor and the Agent) on each of the Properties. If the report delivered
pursuant to the preceding sentence recommends that a "Phase II" report or other
supplemental report be obtained, the Lessee shall, at its own cost and expense,
not
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less than thirty (30) days prior to such Expiration Date or Payment Date,
provide to Lessor and the Agent such "Phase II" or other report, in form and
substance reasonably satisfactory to Lessor and the Agent. If Lessee fails to
provide such Phase I, Phase II or other supplemental reports with respect to any
Property within the time periods required by this SECTION 10.2, or if such
report or reports are not satisfactory in scope or content to the Agent or the
Lessor (in their sole discretion), then notwithstanding any other provision of
this Lease, Lessor may require Lessee to purchase all of the Properties on such
Expiration Date or Payment Date for the Termination Value thereof, plus all Rent
due and payable, and all other amounts due and owing under any Operative
Agreement.
ARTICLE XI
11.1 MODIFICATIONS.
(a) Lessee at its sole cost and expense, at any time and from
time to time without the consent of Lessor may make alterations,
renovations, improvements and additions to any Property or any part
thereof and substitutions and replacements therefor (collectively,
"Modifications") (and shall make any Modification required by
applicable Legal Requirements); PROVIDED, that: (i) except for any
Modification required to be made pursuant to a Legal Requirement, no
Modification shall materially impair the value, utility or useful life
of any Property from that which existed immediately prior to such
Modification; (ii) the Modification shall be done expeditiously and in
a good and workmanlike manner; (iii) Lessee shall comply with all
material Legal Requirements (including all Environmental Laws) and
Insurance Requirements applicable to the Modification, including
without limitation the obtaining of all permits and certificates of
occupancy, and the structural integrity of any Property shall not be
adversely affected; (iv) to the extent required by SECTION 14.2(A),
Lessee shall maintain builders' risk insurance at all times when a
Modification is in progress; (v) subject to the terms of ARTICLE XIII
relating to permitted contests, Lessee shall pay all costs and expenses
and discharge any Liens (other than Permitted Liens) arising with
respect to the Modification; (vi) such Modification shall comply with
the requirements of this Lease (including without limitation SECTIONS
8.2 AND 10.1); and (vii) no Improvements shall be demolished unless
Lessee shall finance the proposed Modification outside of this lease
facility. Modifications that (y) are not required for any Property or
any part thereof pursuant to any Legal Requirement or otherwise and (z)
are severable from the applicable Property without damage or other loss
of value to such Property shall become property of the Lessee, and
title to such Modifications shall rest with the Lessee. Except as set
forth in the immediately preceding sentence, all Modifications shall
become property of the Lessor and shall be subject to this Lease, and
title to any component of any Property comprising any such
Modifications shall immediately vest in Lessor.
(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor and the Agent to be consistent with
and in compliance with the terms and provisions of this ARTICLE XI.
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ARTICLE XII
12.1 WARRANTY OF TITLE.
(a) Lessee agrees that, except as otherwise provided herein
and subject to the terms of ARTICLE XIII relating to permitted
contests, Lessee shall not directly or indirectly create or allow to
remain, and shall promptly discharge at its sole cost and expense, (i)
any Lien, defect, attachment, levy, title retention agreement or claim
upon any Property or any Modifications or (ii) any Lien, attachment,
levy or claim with respect to the Rent or with respect to any amounts
held by the Agent pursuant to the Credit Agreement, in each case other
than Permitted Liens and Lessor Liens. Lessee shall promptly notify
Lessor in the event it receives actual knowledge that a Lien other than
a Permitted Lien or Lessor Lien has occurred with respect to a
Property, and Lessee represents and warrants to, and covenants with,
Lessor that the Liens in favor of the Lessor created by the Operative
Agreements are first priority perfected Liens subject only to Permitted
Liens.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to
or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
ARTICLE XIII
13.1 PERMITTED CONTESTS OTHER THAN IN RESPECT OF INDEMNITIES. Except to
the extent otherwise provided for in SECTION 13 of the Participation Agreement,
Lessee, on its own or on Lessor's behalf but at Lessee's sole cost and expense,
may contest, by appropriate administrative or judicial proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any Legal Requirement, or utility charges payable pursuant to
SECTION 4.1 or any Lien, attachment, levy, encumbrance or encroachment, and
Lessor agrees not to pay, settle or otherwise compromise any such item, provided
that (a) the commencement and continuation of such proceedings shall suspend the
collection of any such contested amount from, and suspend the enforcement
thereof against, the applicable Properties, Lessor, each Holder, the Agent and
each Lender; (b) there shall not be imposed a Lien (other than Permitted Liens)
on any Property and no part of any Property nor any Rent shall be in any danger
of being sold, forfeited, lost or deferred; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability on Lessor, any Holder, the Agent or any Lender for
failure to comply therewith; and (d) in the event that, at any time, there shall
be a material risk of extending the application of such item beyond the end of
the Term, then Lessee shall deliver to Lessor an Officer's
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Certificate certifying as to the matters set forth in clauses (a), (b) and (c)
of this SECTION 13.1. Lessor, at Lessee's sole cost and expense, shall execute
and deliver to Lessee such authorizations and other documents as may reasonably
be required in connection with any such contest and, if reasonably requested by
Lessee, shall join as a party therein at Lessee's sole cost and expense.
ARTICLE XIV
14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE. During the
Term of each Property, Lessee shall procure and carry, at Lessee's sole cost and
expense, commercial general liability insurance for claims for injuries or death
sustained by persons or damage to property while on the Properties or the
premises where the Equipment is located and such other public liability
coverages as are then customarily carried by similarly situated companies
conducting business similar to that conducted by Lessee. Such insurance shall be
on terms and in amounts (and with deductibles and limitations on coverage) that
are (a) reasonably satisfactory to Lessor and the Agent and (b) no less
favorable than insurance maintained by Lessee with respect to similar properties
and equipment that it owns and are then carried by similarly situated companies
conducting business similar to that conducted by Lessee. The policies shall be
endorsed to name Lessor, the Agent, the Lenders and the Holders as additional
insureds. The policies shall also specifically provide that such policies shall
be considered primary insurance which shall apply to any loss or claim before
any contribution by any insurance which Lessor, any Holder, the Agent or any
Lender may have in force. Lessee shall, in the operation of the Properties,
comply with the applicable workers' compensation laws and protect Lessor, each
Holder, the Agent and each Lender against any liability under such laws.
14.2 HAZARD AND OTHER INSURANCE.
(a) During the Term for each Property, Lessee shall keep, or
cause to be kept, such Property insured against loss or damage by fire
and all other risks and shall maintain builders' risk insurance during
construction of any Improvements or Modifications in amounts not less
than the replacement value from time to time of such Property and on
terms that (i) are no less favorable than insurance covering other
similar properties owned by Lessee and (ii) are then carried by
similarly situated companies conducting business similar to that
conducted by Lessee. Lessee shall not be required to maintain separate
builder's insurance solely by reason of the Modifications to a Property
if the cost of such Modifications will not exceed $25,000 in the
aggregate. The policies shall be endorsed to name Lessor and the Agent
(for itself and on behalf of the Lenders and the Holders), to the
extent of their respective interests, as additional insureds and loss
payees; PROVIDED, that so long as no Lease Event of Default has
occurred and is continuing, any loss payable under the insurance
policies required by this Section will be paid to Lessee.
(b) If, during the Term with respect to a Property the area in
which such Property is located is designated a "flood-prone" area
pursuant to the Flood Disaster Protection Act of 1973, or any
amendments or supplements thereto, then Lessee shall comply with the
National Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973. In addition, Lessee will fully comply with the
requirements of the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as each may be amended from
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time to time, and with any other Legal Requirement concerning flood
insurance to the extent that it may apply to any such Property.
14.3 COVERAGE.
(a) As of the date of this Lease and annually thereafter,
Lessee shall furnish Lessor and the Agent with certificates prepared by
the insurers or insurance broker of Lessee showing the insurance
required under SECTIONS 14.1 AND 14.2 to be in effect, naming (except
with respect to workers' compensation insurance) Lessor, the Agent,
each Lender and each Holder as an additional insured on all insurance
described in SECTION 14.1, and the Agent (for itself and on behalf of
the Lenders and the Holders) as additional insured and loss payee on
all insurance described in SECTION 14.2, and in each case evidencing
the other requirements of this ARTICLE XIV. All such insurance shall be
at the cost and expense of Lessee and provided by nationally
recognized, financially sound insurance companies. Such certificates
shall include a provision for thirty (30) days' advance written notice
by the insurer to Lessor and the Agent in the event of cancellation or
material alteration of such insurance. If a Lease Event of Default has
occurred and is continuing and Lessor so requests, Lessee shall deliver
to Lessor copies of all insurance policies required by SECTIONS 14.1
AND 14.2.
(b) Lessee agrees that any insurance policy required by
SECTIONS 14.1, 14.2(A) AND 14.2(B) shall include an appropriate
provision that such policy will not be invalidated should Lessee waive,
at any time, any or all rights of recovery against any party for losses
covered by such policy or due to any breach of warranty, fraud, action,
inaction or misrepresentation by Lessee or any Person acting on behalf
of Lessee. Lessee hereby waives any and all such rights against the
Lessor, the Holders, the Agent and the Lenders to the extent of
payments made to any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with
any insurance required under this ARTICLE XIV, except that Lessor may
carry separate liability insurance at Lessor's sole cost so long as (i)
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would
apply to a loss covered under Lessee's policy and (ii) each such
insurance policy will not cause Lessee's insurance required under this
ARTICLE XIV to be subject to a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by SECTION 14.1 AND SECTION 14.2, shall renew or
replace each policy prior to the expiration date thereof, and shall
otherwise maintain the coverage required by such Sections without any
lapse in coverage.
14.4 ADDITIONAL INSURANCE REQUIREMENTS. Without limiting the generality
of SECTIONS 14.1 through 14.3 above or any other provision of any Operative
Agreement, Lessee shall obtain any and all additional insurance policies with
regard to the Properties or otherwise with respect to the transactions
contemplated by the Operative Agreements, as requested from time to time by
Lessor.
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ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
(a) Subject to the provisions of this ARTICLE XV and ARTICLE
XVI (in the event Lessee delivers, or is obligated to deliver, a
Termination Notice), and prior to the occurrence and continuation of a
Lease Default or Lease Event of Default, Lessee shall be entitled to
receive (and Lessor hereby irrevocably assigns to Lessee all of
Lessor's right, title and interest in) any award, compensation or
insurance proceeds under SECTIONS 14.2(A) OR (B) hereof to which Lessee
or Lessor may become entitled by reason of their respective interests
in a Property (i) if all or a portion of such Property is damaged or
destroyed in whole or in part by a Casualty or (ii) if the use, access,
occupancy, easement rights or title to such Property or any part
thereof is the subject of a Condemnation; PROVIDED, HOWEVER, if a Lease
Default or Lease Event of Default shall have occurred and be continuing
such award, compensation or insurance proceeds shall be paid directly
to Lessor or, if received by Lessee, shall be held in trust for Lessor,
and shall be paid over by Lessee to Lessor and held in accordance with
the terms of this paragraph (a). All amounts held by Lessor hereunder
on account of any award, compensation or insurance proceeds either paid
directly to Lessor or turned over to Lessor shall be held as security
for the performance of Lessee's obligations hereunder.
(b) Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof. At Lessee's reasonable
request, and at Lessee's sole cost and expense, Lessor and the Agent
shall participate in any such proceeding, action, negotiation,
prosecution or adjustment. Lessor and Lessee agree that this Lease
shall control the rights of Lessor and Lessee in and to any such award,
compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a possible
Condemnation of a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed ten percent (10%) of
the Property Cost of such Property, Lessee shall give notice thereof to
the Lessor and to the Agent promptly after the receipt of such notice.
(d) In the event of a Casualty or a Condemnation (regardless
of whether notice thereof must be given pursuant to paragraph (c)),
this Lease shall terminate with respect to the applicable Property in
accordance with SECTION 16.1 if Lessee, within thirty (30) days after
such occurrence, delivers to Lessor and the Agent a Termination Notice
to such effect.
(e) If, pursuant to this SECTION 15.1, this Lease shall
continue in full force and effect following a Casualty or Condemnation
with respect to the affected Property, Lessee shall, at its sole cost
and expense and using, if available, the proceeds of any award,
compensation or insurance with respect to such Casualty or Condemnation
(including, without limitation, any such award, compensation or
insurance which has been received by the Agent and which should be
turned over to Lessee pursuant to the terms of the Operative
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Agreements, and if not available or sufficient, using its own funds),
promptly and diligently repair any damage to the applicable Property
caused by such Casualty or Condemnation in conformity with the
requirements of SECTIONS 10.1 AND 11.1, using the as-built plans and
specifications or manufacturer's specifications for the applicable
Improvements or Equipment (as modified to give effect to any subsequent
Modifications, any Condemnation affecting the Property and all
applicable Legal Requirements), so as to restore the applicable
Property to substantially the same condition, operation, function and
value as existed immediately prior to such Casualty or Condemnation. In
such event, title to the applicable Property shall remain with Lessor.
(f) In no event shall a Casualty or Condemnation with respect
to which this Lease remains in full force and effect under this SECTION
15.1 affect Lessee's obligations to pay Rent pursuant to SECTION 3.1.
(g) Notwithstanding anything to the contrary set forth in
SECTION 15.1(A) OR SECTION 15.1(E), if during the Term with respect to
a Property a Casualty occurs with respect to such Property or Lessee
receives notice of a Condemnation with respect to such Property, and
following such Casualty or Condemnation, (i) the applicable Property
cannot reasonably be restored, repaired or replaced on or before the
180th day prior to the Expiration Date (if such Casualty or
Condemnation occurs during the Term) to substantially the same
condition as existed immediately prior to such Casualty or
Condemnation, or (ii) on or before such day such Property is not in
fact so restored, repaired or replaced, then Lessee shall be required
to purchase such Property on the next Payment Date and pay Lessor the
Termination Value for such Property, plus any and all Rent then due and
owing, plus all other amounts then due and owing (including without
limitation amounts described in clause FIRST of SECTION 22.2).
15.2 ENVIRONMENTAL MATTERS. Promptly upon Lessee's actual knowledge of
the presence of Hazardous Substances in any portion of any Property (or in any
other property that is not subject to this Lease if Lessee has reason to believe
that such Hazardous Substances may be caused by an emission from or on, or a
condition on, any Property) in concentrations and conditions that constitute an
Environmental Violation and as to which, in the reasonable opinion of Lessee,
the cost to undertake any legally required response, clean up, remedial or other
action might result in a cost to Lessee or loss in the value of such Property of
more than $100,000, Lessee shall notify Lessor in writing of such condition. In
the event of any Environmental Violation (regardless of whether notice thereof
must be given to Lessor pursuant to the preceding sentence), Lessee shall, not
later than sixty (60) days after Lessee has actual knowledge of such
Environmental Violation, either deliver to Lessor a Termination Notice with
respect to the applicable Property or Properties pursuant to SECTION 16.1, if
applicable, or, at Lessee's sole cost and expense, promptly and diligently
undertake and complete any response, clean up, remedial or other action
necessary to remove, cleanup or remediate the Environmental Violation in
accordance with all Environmental Laws. If Lessee does not deliver a Termination
Notice with respect to such Property pursuant to SECTION 16.1, Lessee shall,
upon completion of remedial action by Lessee, cause to be prepared by a
reputable environmental consultant acceptable to Lessor a report describing the
Environmental Violation and the actions taken by Lessee (or its agents) in
response to such Environmental Violation, and a statement by the
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consultant that the Environmental Violation has been remedied in full compliance
with applicable Environmental Law.
15.3 NOTICE OF ENVIRONMENTAL MATTERS. Promptly, but in any event within
thirty (30) days from the date Lessee has actual knowledge thereof, Lessee shall
provide to Lessor written notice of any pending or threatened Environmental
Claim involving any Environmental Law or any Release on or in connection with
any Property. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and Lessee's proposed response thereto. In
addition, Lessee shall provide to Lessor, within five (5) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any Environmental Law in connection with any Property.
Lessee shall also promptly provide such detailed reports of any such material
Environmental Claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS. If any of the following occur:
(i) if the requirements of SECTION 15.1(C) are satisfied, or (ii) if the
requirements of SECTION 15.1(D) are satisfied and Lessee has determined pursuant
to such section that following the applicable Casualty or Condemnation this
Lease shall terminate with respect to the affected Property, or (iii) Lessee has
determined pursuant to the second sentence of SECTION 15.2 that, due to the
occurrence of an Environmental Violation, this Lease shall terminate with
respect to the affected Property, then Lessee shall be obligated to deliver,
within sixty (60) days of its receipt of notice of the applicable Condemnation
or the occurrence of the applicable Casualty or Environmental Violation, a
written notice to the Lessor in the form described in SECTION 16.2(A) (a
"Termination Notice") of the termination of this Lease with respect to the
applicable Property.
16.2 PROCEDURES.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a binding
and irrevocable agreement of Lessee to pay the Termination Value for
the applicable Property, any and all Rent then due and owing and all
other amounts then due and owing from Lessee under any of the Operative
Agreements (including without limitation amounts described in clause
FIRST of SECTION 22.2) and purchase such Property on such Termination
Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, any and all Rent then
due and owing and all other amounts then due and owing from Lessee
under any of the Operative Agreements (including without limitation
amounts described in clause FIRST of SECTION 22.2), and Lessor shall
convey such Property, or the remaining portion thereof, if any, to
Lessee (or Lessee's designee), all in accordance with SECTION 19.1.
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ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT. If any one or more of the following
events (each a "Lease Event of Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within three (3) days after the
same has become due and payable or (ii) any Termination Value, on the
date any such payment is due, or any payment of Basic Rent or
Supplemental Rent due on the due date of any such payment of
Termination Value, or any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in SECTION 17(A)(II)) due and
payable within three (3) days after receipt of notice that such payment
is due;
(c) Lessee shall fail to maintain insurance as required by
ARTICLE XIV of this Lease;
(d) Lessee or any Guarantor shall fail to observe or perform
any term, covenant or provision of Lessee or Guarantor under this Lease
or any other Operative Agreement to which Lessee or Guarantor is a
party other than those set forth in SECTIONS 17.1(A), (B) (C) OR (G)
hereof, and such failure shall remain uncured for a period of thirty
(30) days after the earlier of receipt of written notice from Lessor
thereof or a Responsible Officer of Lessee becomes aware of such
failure;
(e) An Agency Agreement Event of Default shall have occurred
and be continuing;
(f) (i) Any default, which is not waived, in the payment of
any principal, interest, premium or other amount with respect to any
Indebtedness (other than obligations under the Operative Agreements) of
Lessee or any Guarantor in an amount not less than $500,000 in the
aggregate outstanding, or (ii) any default, which is not waived, in the
performance, observance or fulfillment of any term or covenant
contained in any agreement or instrument under or pursuant to which any
such Indebtedness referred to in clause (i) may have been issued,
created, assumed, guaranteed or secured by Lessee, or (iii) any other
event of default as specified in any agreement or instrument under or
pursuant to which any such Indebtedness may have been issued, created,
assumed, guaranteed or secured by Lessee, and any such default or event
of default specified in clauses (i), (ii) or (iii) shall continue for
more than the period of grace, if any, therein specified, or such
default or event of default shall permit the holder of any such
Indebtedness (or any agent or trustee acting on behalf of one or more
holders) to accelerate the maturity thereof; or
(g) The breach of any financial covenant set forth or
incorporated by reference in ARTICLE XXVIII hereof (including without
limitation any covenant set forth in SECTIONS 28.4(A)-(D));
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(h) The Lessee or any Guarantor shall be unable to pay its
debts generally as they become due; file a petition to take advantage
of any insolvency statute; make an assignment for the benefit of its
creditors; commence a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or any
substantial part of its property; file a petition or answer seeking
liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute;
(i) A court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Lessee or any Guarantor or of the
whole or any substantial part of the properties of the Lessee or any
Guarantor, and such order, judgment or decree continues unstayed and in
effect for a period of sixty (60) days, or approve a petition filed
against the Lessee or any Guarantor seeking liquidation, reorganization
or arrangement or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States of America or
any state, which petition is not dismissed within sixty (60) days; or
if, under the provisions of any other law for the relief or aid of
debtors, a court of competent jurisdiction shall assume custody or
control of the Lessee or of the whole or any substantial part of its
properties, which control is not relinquished within sixty (60) days;
or if there is commenced against the Lessee or any Guarantor any
proceeding or petition seeking liquidation, reorganization, arrangement
or similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state
which proceeding or petition remains undismissed for a period of sixty
(60) days; or if the Lessee or any Guarantor takes any action to
indicate its consent to or approval of any such proceeding or petition;
(j) The entering of any order in any proceedings against
Lessee or any Guarantor decreeing the dissolution, divestiture or
split-up of Lessee or any Guarantor, and such order remains in effect
for more than sixty (60) days;
(k) Any representation, warranty or statement of fact
contained in any Operative Agreement or in any writing, report,
certificate, or statement at any time furnished to Lessor, the Agent,
any Holder or any Lender, by or on behalf of Lessee or any Guarantor
pursuant to or in connection with this Lease or any other Operative
Agreement or otherwise, shall be false or misleading in any material
respect when given;
(l) One or more judgments or orders where the amount not
covered by insurance (or the amount as to which the insurer) is found
not to be liable for) is in excess of $500,000 is rendered against
Lessee or any Guarantor, or (ii) there is any attachment, injunction or
execution against any of the Lessee's or any Guarantor's properties for
any amount in excess of $500,000 in the aggregate; and such judgment,
attachment, injunction or execution remains unpaid, unstayed,
undischarged, unbonded or undismissed for a period of thirty (30) days;
or
(m) Any material Environmental Violation shall have occurred
and be continuing;
(n) Any Aviation Sales Credit Agreement Event of Default, or
any default under the Subordinated Debt, shall have occurred and be
continuing;
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(o) Any Operative Agreement shall cease to be in full force
and effect; or
(p) Any material adverse change in (i) the business, condition
(financial or otherwise) assets, liabilities or operations of Aviation
Sales or any of its Subsidiaries, (ii) the ability of the Lessee, the
Construction Agent or any of their Subsidiaries to perform its
respective obligations under any Operative Agreement to which it is a
party, (iii) the validity or enforceability of any Operative Agreement
or the rights and remedies of the Agent, the Lenders, the Holders, or
the Lessor thereunder, or (iv) the validity, priority or enforceability
of any Lien on any Property created by any of the Operative Agreements,
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this ARTICLE XVII and in SECTION 18.1, terminate this
Lease by giving Lessee fifteen (15) days notice of such termination, and this
Lease shall terminate, and all rights of Lessee under this Lease shall cease.
Lessee shall, to the fullest extent permitted by law, pay as Supplemental Rent
all costs and expenses incurred by or on behalf of Lessor, including without
limitation reasonable fees and expenses of counsel, as a result of any Lease
Event of Default hereunder.
17.2 SURRENDER OF POSSESSION. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to SECTION 17.1, Lessee shall, upon thirty (30) days written
notice, surrender to Lessor possession of the Properties. Lessor may enter upon
and repossess the Properties by such means as are available at law or in equity,
and may remove Lessee and all other Persons and any and all personal property
and Lessee's equipment and personalty and severable Modifications from the
Properties. Lessor shall have no liability by reason of any such entry,
repossession or removal performed in accordance with applicable law. Upon the
written demand of Lessor, Lessee shall return the Properties promptly to Lessor,
in the manner and condition required by, and otherwise in accordance with the
provisions of, SECTION 22.1(C) hereof.
17.3 RELETTING. If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
SECTION 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of Lessee or otherwise, for such term or
terms (which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may collect, receive and retain the rents resulting from such reletting.
Lessor shall not be liable to Lessee for any failure to relet any Property or
for any failure to collect any rent due upon such reletting.
17.4 DAMAGES. Neither (a) the termination of this Lease as to all or
any of the Properties pursuant to SECTION 17.1; (b) the repossession of all or
any of the Properties; nor (c) the failure of Lessor to relet all or any of the
Properties, the reletting of all or any portion thereof, nor the failure of
Lessor to collect or receive any rentals due upon any such reletting, shall
relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. If any Lease Event of
Default shall have occurred and be continuing and notwithstanding any
termination of this Lease pursuant to SECTION 17.1, Lessee shall forthwith pay
to Lessor all Rent and other sums due and payable hereunder to and including the
date of such termination. Thereafter,
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on the days on which the Basic Rent or Supplemental Rent, as applicable, are
payable under this Lease or would have been payable under this Lease if the same
had not been terminated pursuant to SECTION 17.1 and until the end of the Term
hereof or what would have been the Term in the absence of such termination,
Lessee shall pay Lessor, as current liquidated damages (it being agreed that it
would be impossible accurately to determine actual damages) an amount equal to
the Basic Rent and Supplemental Rent that are payable under this Lease or would
have been payable by Lessee hereunder if this Lease had not been terminated
pursuant to SECTION 17.1, provided that Lessee's obligation to make payments of
Basic Rent and Supplemental Rent under this SECTION 17.4 shall continue only so
long as Lessor shall not have received the amounts specified in SECTION 17.5.
The amount of Lessee's liabilities and obligations under this Lease shall not be
reduced or offset by any proceeds Lessor may receive from any reletting of any
Property, EXCEPT THAT the net proceeds, if any, which are actually received by
Lessor from reletting of any Property shall be offset against the final
liquidated damages amount specified in SECTION 17.5. In calculating the amount
of such net proceeds from reletting, there shall be deducted all of Lessor's,
any Holder's, the Agent's and any Lender's reasonable expenses in connection
therewith, including repossession costs, brokerage or sales commissions, fees
and expenses of counsel and any necessary repair or alteration costs and
expenses incurred in preparation for such reletting. To the extent Lessor
receives any damages pursuant to this SECTION 17.4, such amounts shall be
regarded as amounts paid on account of Rent. Lessee specifically acknowledges
and agrees that its obligations under this SECTION 17.4 shall be absolute and
unconditional under any and all circumstances and shall be paid or performed, as
the case may be, without notice or demand and without any abatement, reduction,
diminution, setoff, defense, counterclaim or recoupment whatsoever.
17.5 FINAL LIQUIDATED DAMAGES. If a Lease Event of Default shall have
occurred and be continuing, whether or not this Lease shall have been terminated
pursuant to SECTION 17.1 and whether or not Lessor shall have collected any
current liquidated damages pursuant to SECTION 17.4, Lessor shall have the right
to recover, by demand to Lessee and at Lessor's election, and Lessee shall pay
to Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under SECTION 13 of the Participation Agreement, and in lieu of all
current liquidated damages beyond the date of such demand (it being agreed that
it would be impossible accurately to determine actual damages) the sum of (a)
the Termination Value for all Properties remaining under this Lease, PLUS (b)
all other amounts owing in respect of Rent, Supplemental Rent and other amounts
then due and payable under this Lease or any other Operative Agreement. It is
intended and agreed that the foregoing amount is and will be liquidated damages
and not a penalty. Upon payment of the amount specified pursuant to the first
sentence of this SECTION 17.5, Lessee shall be entitled to receive from Lessor,
either at Lessee's request or upon Lessor's election, in either case at Lessee's
cost, an assignment of Lessor's entire right, title and interest in and to the
Properties, the Improvements, Fixtures, Modifications and Equipment, in each
case in recordable form and otherwise in conformity with local custom and free
and clear of the Lien of this Lease (including the release of any memoranda of
Lease or the Lease Supplement recorded in connection therewith) and any Lessor
Liens. The Properties shall be conveyed to Lessee "AS IS" "WHERE IS" and in
their then present physical condition. If any statute or rule of law shall limit
the amount of such final liquidated damages to less than the amount agreed upon,
Lessor shall be entitled to the maximum amount allowable under such statute or
rule of law; PROVIDED, HOWEVER, Lessee shall not be entitled to receive an
assignment of Lessor's interest in the Properties, the Improvements, Fixtures,
Modifications or Equipment or
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documents unless Lessee shall have paid in full the Termination Value and all
other amounts due and owing hereunder and under the other Operative Agreements.
Lessee specifically acknowledges and agrees that its obligations under this
SECTION 17.5 shall be absolute and unconditional under any and all circumstances
and shall be paid or performed, as the case may be, without notice or demand
(except as otherwise specifically provided herein) and without any abatement,
reduction, diminution, setoff, defense, counterclaim or recoupment whatsoever.
17.6 WAIVER OF CERTAIN RIGHTS. If this Lease shall be terminated
pursuant to SECTION 17.1, Lessee waives, to the fullest extent permitted by law,
(a) any notice of re-entry or the institution of legal proceedings to obtain
re-entry or possession; (b) any right of redemption, re-entry or possession; (c)
the benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt; and (d) any other rights which might otherwise
limit or modify any of Lessor's rights or remedies under this ARTICLE XVII.
17.7 ASSIGNMENT OF RIGHTS UNDER CONTRACTS. If a Lease Event of Default
shall have occurred and be continuing, and whether or not this Lease shall have
been terminated pursuant to SECTION 17.1, Lessee shall upon Lessor's demand
immediately assign, transfer and set over to Lessor all of Lessee's right, title
and interest in and to each agreement executed by Lessee in connection with the
purchase, construction, development, use or operation of the Properties
(including, without limitation, all right, title and interest of Lessee with
respect to all warranty, performance, service and indemnity provisions), as and
to the extent that the same relate to the purchase, construction, use and
operation of the Properties.
17.8 ENVIRONMENTAL COSTS. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to SECTION 17.1, Lessee shall pay directly to any third
party (or at Lessor's election, reimburse Lessor) for the cost of any
environmental testing or remediation work undertaken respecting any Property as
such testing or work is deemed appropriate in the reasonable judgment of Lessor.
Lessee shall pay all amounts referenced in the immediately preceding sentence
within ten (10) days of any request by Lessor for such payment.
17.9 REMEDIES CUMULATIVE. The remedies herein provided shall be
cumulative and in addition to (and not in limitation of) any other remedies
available at law, equity or otherwise, including, without limitation, any
mortgage foreclosure remedies.
17.10 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Lessee shall promptly
notify the Lessor and the Agent if any Responsible Officer of Lessee has
received notice, or has actual knowledge, of any Default or Event of Default.
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS. Lessor, without
waiving or releasing any obligation or Lease Event of Default, may (but shall be
under no obligation to) remedy any Lease Event of Default for the account and at
the sole cost and expense of Lessee, including the failure by
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Lessee to maintain the insurance required by ARTICLE XIV, and may, to the
fullest extent permitted by law, and notwithstanding any right of quiet
enjoyment in favor of Lessee, enter upon any Property, or real property owned or
leased by Lessee, take all such action thereon as may be necessary or
appropriate therefor, and inspect or copy any records relating to any Property
or the transactions contemplated hereby (and Lessee shall make available to
Lessor, for inspection thereof, any such records). No such entry shall be deemed
an eviction of any lessee. All reasonable out-of-pocket costs and expenses so
incurred (including without limitation reasonable fees and expenses of counsel),
together with interest thereon at the Overdue Rate from the date on which such
sums or expenses are paid by Lessor, shall be paid by Lessee to Lessor on
demand.
ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S EXERCISE OF ITS PURCHASE OPTION.
Subject to SECTION 19.2, in connection with any termination of this Lease with
respect to any Property pursuant to the terms of SECTION 16.2, or in connection
with Lessee's exercise of its Purchase Option or its option to purchase all
Properties pursuant to SECTION 20.1, upon the date on which this Lease is to
terminate with respect to a Property or all of the Properties, and upon tender
by Lessee of the amounts set forth in SECTIONS 16.2(B) OR 20.1, as applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an assignment of Lessor's entire interest in the applicable
Property, in each case in recordable form and otherwise in conformity with local
custom and free and clear of the Lien of this Lease and any Lessor Liens
attributable to Lessor but without any other warranties (of title or otherwise)
from the Lessor. The Lessor's interest in the applicable Property shall be
conveyed to Lessee "AS IS" "WHERE IS" and in then present physical condition. In
addition, Lessor shall, upon Lessee's request and at Lessee's expense, execute
and deliver any documents (including any appropriate releases of or amendments
to financing statements or recorded memoranda of this Lease) necessary to
release the Lien of this Lease on the applicable Property.
19.2 NO TERMINATION WITH RESPECT TO LESS THAN ALL OF A PROPERTY. Lessee
shall not be entitled to exercise its Purchase Option separately with respect to
Property consisting of Land, Equipment and Improvements but shall be required to
exercise its Purchase Option with respect to an entire Property.
ARTICLE XX
20.1 PURCHASE PRIOR TO END OF TERM; PURCHASE OR SALE OPTION AT END OF
TERM.
(a) PURCHASE OPTION PRIOR TO END OF TERM. Provided no Default
or Event of Default shall have occurred and be continuing and provided
that the Election Notice referred to in SECTION 20.1(B) has not been
delivered, Lessee shall have the option, exercisable by giving the
Agent and Lessor no more than one hundred twenty (120) days and no less
than thirty (30) days written notice of Lessee's election to exercise
such option, to purchase all (but not less than all) of the Properties
on a Scheduled Interest Payment Date as identified in such written
notice, at a price equal to the Termination Value for such Properties
and all Rent then due and owing and all other amounts then due and
owing (by the Lessee or the Construction Agent) under this Lease or
under any other Operative Agreement (including
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without limitation amounts, if any, described in clause FIRST of
SECTION 22.2) (which the parties do not intend to be a "bargain"
purchase price); and, upon receipt of such amount, Lessor shall
transfer to Lessee all Lessor's right, title and interest in and to
such Properties in accordance with SECTION 19.1 as of the Business Day
on which such purchase occurs; and the Expiration Date shall be deemed
to have occurred on such date.
(b) PURCHASE OR SALE OPTION AT END OF TERM. Not less than 120
days and no more than 180 days prior to the Expiration Date, Lessee may
give Lessor and Agent irrevocable written notice (the "Election
Notice") that Lessee is electing to exercise either (a) the option to
purchase all, but not less than all, of the Properties on the
Expiration Date (the "Purchase Option") or (b) the option to remarket
all of the Properties and cause a sale of all of the Properties
pursuant to the terms of SECTION 22.1 (the "Sale Option"), such sale to
occur on the Expiration Date. If Lessee does not give an Election
Notice indicating the Sale Option at least 120 days and not more than
180 days prior to the Expiration Date, then Lessee shall be deemed to
have elected the Purchase Option for the Expiration Date. Lessor shall
have no obligation to sell any Property unless all of the Properties
are sold on the Expiration Date. If Lessee shall (i) elect (or be
deemed to elect) to exercise the Purchase Option, or (ii) elect to
remarket all of the Properties pursuant to SECTION 22.1 and fail to
deliver the environmental report required by SECTION 10.2 at the time
specified in such Section, or (iii) elect to remarket all of the
Properties pursuant to SECTION 22.1 and fail to cause all of the
Properties to be sold in accordance with the terms of SECTION 22.1 on
the Expiration Date on which such a sale of all of the Properties is
required in connection with such election, then in each case, Lessee
shall pay to Lessor on the Expiration Date or Payment Date an amount
(the "Purchase Option Price") equal to the Termination Value for all
the Properties (which the parties do not intend to be a "bargain"
purchase) plus all Rent and other amounts then due and payable under
this Lease or under any other Operative Agreement (including without
limitation the amounts described in clause FIRST of SECTION 22.2), and,
upon receipt of such amount, Lessor shall transfer to Lessee all of
Lessor's right, title and interest in and to the Properties in
accordance with SECTION 19.1. Lessee may not elect the Sale Option, and
Lessor shall have no obligation to sell any Property pursuant to
SECTION 22.1, if a Lease Event of Default has occurred and is
continuing on the date of the Election Notice or the Sale Date.
20.2 ACCOUNTING CHANGES. Although neither Lessor, the Agent, NMS, nor
any Lender or Holder makes any representation or warranty with respect to the
Lessee's accounting treatment of this transaction, Lessee represents that a
material incentive for Lessee to enter into this Lease is the advice of the
Lessee's independent auditors that this Lease may be treated as an operating
lease for financial accounting purposes under the applicable rules and
interpretations of the Financial Accounting Standards Board and/or the
Securities Exchange Commission (the "Lease Accounting Rules") in effect as of
the date of this Lease. In the event that Lessee's independent auditors shall
determine that any subsequent change in the Lease Accounting Rules will preclude
the Lessee (or raise a substantial question as to whether the Lessee is
precluded) from continuing to account for this Lease as an operating lease with
substantially the same financial accounting benefits as before the change in
Lease Accounting Rules, then the Lessee shall so notify the Lessor and the Agent
in writing of such determination by its auditors; and Lessee may elect (by
delivery of irrevocable written notice of such election to the Lessor and the
Agent) to purchase all of the Properties or to cause all of the
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Properties to be transferred to a third party transferee designated by Lessee
(such purchase or transfer to be consummated on a date (the "Accounting Change
Transfer Date") specified by Lessee in such notice and in any event within sixty
(60) days after the date of such notice). On the Accounting Change Transfer Date
(whether the Properties are to be purchased by Lessee or transferred to a third
party), Lessee shall pay to Lessor an amount equal to the Termination Value for
all the Properties (which the parties do not intend to be a "bargain" purchase)
plus all Rent and other amounts then due and payable under this Lease or under
any other Operative Agreement (including without limitation the amounts
described in clause FIRST of SECTION 22.2), and, upon receipt of such amount,
Lessor shall transfer to Lessee (or to the third party designated by Lessee) all
of Lessor's right, title and interest in and to the Properties in accordance
with SECTION 19.1 and the Expiration Date shall be deemed to have occurred on
the date of such transfer (without giving Lessee the right to remarket
Properties pursuant to Section 22.1).
ARTICLE XXI
[INTENTIONALLY LEFT BLANK.]
ARTICLE XXII
22.1 SALE PROCEDURE.
(a) During the Marketing Period, Lessee, on behalf of the
Lessor, shall obtain bids for the cash purchase of all of the
Properties in connection with a sale to one or more purchasers (other
than Lessee or any Subsidiary or Affiliate of Lessee) to be consummated
on the Expiration Date for the highest price available, shall notify
Lessor promptly of the name and address of each prospective purchaser
and the cash price which each prospective purchaser shall have offered
to pay for any Property and shall provide Lessor with such additional
information about the bids and the bid solicitation procedure as Lessor
may reasonably request from time to time. Lessor may reject any and all
bids and may assume sole responsibility for obtaining bids by giving
Lessee written notice to that effect; PROVIDED, HOWEVER, that
notwithstanding the foregoing, Lessor may not reject the highest bids
for the Properties submitted by the Lessee if (i) such bids, in the
aggregate, are greater than or equal to the sum of the Limited Recourse
Amount for all of the Properties, plus all reasonable costs and
expenses referred to in clause FIRST of SECTION 22.2 and represent bona
fide offers from one or more third party purchasers, and (ii) prior to
Lessor's acceptance of any such bid, Lessee has delivered to the Agent
cash collateral in an amount not less than the anticipated Deficiency
Balance (as defined in SECTION 22.1(B) below) as determined by the
Agent. If the price which a prospective purchaser or purchasers shall
have offered to pay for the Properties is less than the sum of the
Limited Recourse Amount plus all reasonable costs and expenses referred
to in clause FIRST of SECTION 22.2, Lessor may elect to retain the
Properties by giving Lessee prior written notice of Lessor's election
to retain the Properties, and upon receipt of such notice, Lessee shall
surrender the Properties to Lessor pursuant to SECTION 10.1. Unless
Lessor shall have elected to retain the Properties pursuant to the
preceding sentence, Lessee shall arrange for Lessor to sell the
Properties free and clear of the Lien of this Lease and any Lessor
Liens attributable to it, without recourse or warranty (of
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title or otherwise), for cash on the last day of the Marketing Period
(such date being hereafter referred to as the "Sale Date") to the
purchaser or purchasers identified by Lessee or Lessor, as the case may
be; PROVIDED, HOWEVER, solely as to Lessor or the Trust Company, in its
individual capacity, any Lessor Lien shall not constitute a Lessor Lien
so long as Lessor or the Trust Company, in its individual capacity, is
diligently contesting such Lessor Lien by appropriate proceedings in
good faith; and PROVIDED FURTHER that Lessor shall have no obligation
to sell any Property if a Lease Event of Default has occurred and is
continuing on the Date of the Election Notice or the Sale Date. Lessee
shall surrender the Property so sold or subject to such documents to
each purchaser in the condition specified in SECTION 10.1. Lessee shall
not take or fail to take any action which would have the effect of
unreasonably discouraging bona fide third party bids for any Property.
Lessor shall have no obligation to sell any Property on the Sale Date
unless all of the Properties are sold (and Lessor has received full
payment therefor in cash in the amount required pursuant to this
SECTION 22.1) on the Sale Date. If all of the Properties are not either
(i) sold on the Sale Date in accordance with the terms of this SECTION
22.1, or (ii) retained by the Lessor pursuant to an affirmative
election made by the Lessor pursuant to the third sentence of this
SECTION 22.1(A), then the Lessee shall be obligated to pay the Lessor
on the Sale Date an amount equal to the Termination Value for all of
the Properties (plus all Rent and other amounts then due and payable
under this Lease and any other Operative Agreements) in accordance with
the terms of SECTION 20.2.
(b) If the Properties are sold on the Sale Date to one or more
third party purchasers in accordance with the terms of SECTION 22.1(A)
and the aggregate purchase price paid for the Properties minus the sum
of all costs and expenses referred to in clause FIRST of SECTION 22.2
is less than the sum of the aggregate Termination Values for all of the
Properties plus all Rent and other amounts then due and payable under
this Lease and under any other Operative Agreements (hereinafter such
difference shall be referred to as the "Deficiency Balance"), then the
Lessee hereby unconditionally promises to pay to the Lessor on the Sale
Date the lesser of (i) the Deficiency Balance, or (ii) the Maximum
Residual Guarantee Amount for all of the Properties. If the Properties
are retained by the Lessor pursuant to an affirmative election made by
the Lessor pursuant to the third sentence of SECTION 22.1(A), then the
Lessee hereby unconditionally promises to pay to the Lessor on the Sale
Date an amount equal to the Maximum Residual Guarantee Amount for all
of the Properties.
(c) In the event that the Properties are either sold to one or
more third party purchasers on the Sale Date or retained by the Lessor
in connection with an affirmative election made by the Lessor pursuant
to the third sentence of SECTION 22.1(A), then in either case on the
Sale Date the Lessee shall provide Lessor or such third party
purchasers with (i) all permits, certificates of occupancy,
governmental licenses and authorizations necessary to use and operate
such Property for its intended purposes, (ii) such easements, licenses,
rights-of-way and other rights and privileges in the nature of an
easement as are reasonably necessary or desirable in connection with
the use, repair, access to or maintenance of such Property for its
intended purpose or otherwise as the Lessor shall reasonably request,
and (iii) a services agreement covering such services as Lessor or such
third party purchaser may
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request in order to use and operate a Property for its intended
purposes at such rates (not in excess of arm's-length fair market
rates) as shall be acceptable to Lessee and Lessor or such third party
purchaser. All assignments, licenses, easements, agreements and other
deliveries required by clauses (i) and (ii) of this paragraph (c) shall
be in form reasonably satisfactory to the Lessor or such third party
purchaser, as applicable, and shall be fully assignable (including both
primary assignments and assignments given in the nature of security)
without payment of any fee, cost or other charge.
22.2 APPLICATION OF PROCEEDS OF SALE. The Lessor shall apply the
proceeds of sale of any Property in the following order of priority:
(a) FIRST, to pay or to reimburse Lessor for the payment of
all reasonable costs and expenses incurred by Lessor in connection with
the sale;
(b) SECOND, so long as the Participation Agreement, the Credit
Agreement or the Trust Agreement is in effect and any Loan, Holder
Advance or any other amount is owing to the Lenders, the Holders or any
other Person under any Operative Agreement, to the Agent to be applied
pursuant to inter-creditor provisions between the Lenders and the
Holders contained in the Operative Agreements; and
(c) THIRD, to the Lessee.
22.3 INDEMNITY FOR EXCESSIVE WEAR. If the proceeds of the sale
described in SECTION 22.1 with respect to the Properties, less all expenses
incurred by Lessor in connection with such sale, shall be less than the Limited
Recourse Amount with respect to the Properties, and at the time of such sale it
shall have been reasonably determined (pursuant to the Appraisal Procedure) that
the Fair Market Sales Value of the Properties, shall have been impaired by
greater than expected wear and tear during the term of the Lease, Lessee shall
pay to Lessor within ten (10) days after receipt of Lessor's written statement
(i) the amount of such excess wear and tear determined by the Appraisal
Procedure or (ii) the amount of the Net Sale Proceeds Shortfall, whichever
amount is less.
22.4 APPRAISAL PROCEDURE. For determining the Fair Market Sales Value
of any Property or any other amount which may, pursuant to any provision of any
Operative Agreement, be determined by an appraisal procedure, Lessor and Lessee
shall use the following procedure (the "Appraisal Procedure"). Lessor and Lessee
shall endeavor to reach a mutual agreement as to such amount for a period of ten
(10) days from commencement of the Appraisal Procedure under the applicable
section of the Lease, and if they cannot agree within ten (10) days, then two
qualified appraisers, one chosen by Lessee and one chosen by Lessor, shall
mutually agree thereupon, but if either party shall fail to choose an appraiser
within twenty (20) days after notice from the other party of the selection of
its appraiser, then the appraisal by such appointed appraiser shall be binding
on Lessee and Lessor. If the two appraisers cannot agree within twenty (20) days
after both shall have been appointed, then a third appraiser shall be selected
by the two appraisers or, failing agreement as to such third appraiser within
(30) days after both shall have been appointed, by the American Arbitration
Association. The decisions of the three appraisers shall be given within twenty
(20) days of the appointment of the third appraiser and the decision of the
appraiser most different from the
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average of the other two shall be discarded and such average shall be binding on
Lessor and Lessee; PROVIDED that if the highest appraisal and the lowest
appraisal are equidistant from the third appraisal, the third appraisal shall be
binding on Lessor and Lessee. The fees and expenses of the appraiser appointed
by Lessee shall be paid by Lessee; the fees and expenses of the appraiser
appointed by Lessor shall be paid by Lessor (such fees and expenses not being
indemnified pursuant to SECTION 13 of the Participation Agreement); and the fees
and expenses of the third appraiser shall be divided equally between Lessee and
Lessor.
22.5 CERTAIN OBLIGATIONS CONTINUE. During the Marketing Period, the
obligation of Lessee to pay Rent with respect to the Properties (including the
installment of Basic Rent due on the Expiration Date) shall continue
undiminished until payment in full to Lessor of the sale proceeds, if any, the
Maximum Residual Guarantee Amount, the amount due under SECTION 22.3, if any,
and all other amounts due to Lessor with respect to all Properties. Lessor shall
have the right, but shall be under no duty, to solicit bids, to inquire into the
efforts of Lessee to obtain bids or otherwise to take action in connection with
any such sale, other than as expressly provided in this ARTICLE XXII.
ARTICLE XXIII
23.1 HOLDING OVER. If Lessee shall for any reason remain in possession
of a Property after the expiration or earlier termination of this Lease as to
such Property (unless such Property is conveyed to Lessee), such possession
shall be as a tenancy at sufferance during which time Lessee shall continue to
pay Supplemental Rent that would be payable by Lessee hereunder were the Lease
then in full force and effect with respect to the Property and Lessee shall
continue to pay Basic Rent at 110% of the Basic Rent that would otherwise be due
and payable at such time. Such Basic Rent shall be payable from time to time
upon demand by Lessor and such additional 10% amount shall be applied by the
Lessor to the payment of the Loans pursuant to the Credit Agreement and the
Holder Advances pursuant to the Trust Agreement pro rata between the Loans and
the Holder Advances. During any period of tenancy at sufferance, Lessee shall,
subject to the first sentence of this paragraph, be obligated to perform and
observe all of the terms, covenants and conditions of this Lease, but shall have
no rights hereunder other than the right, to the extent given by law to tenants
at sufferance, to continue their occupancy and use of such Property. Nothing
contained in this ARTICLE XXIII shall constitute the consent, express or
implied, of Lessor to the holding over of Lessee after the expiration or earlier
termination of this Lease as to any Property (unless such Property is conveyed
to Lessee) and nothing contained herein shall be read or construed as preventing
Lessor from maintaining a suit for possession of such Property or exercising any
other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 RISK OF LOSS. During the Term, unless Lessee shall not be in
actual possession of the Property in question solely by reason of Lessor's
exercise of its remedies of dispossession under ARTICLE XVII, the risk of loss
or decrease in the enjoyment and beneficial use of such Property as a result of
the damage or destruction thereof by fire, the elements, casualties, thefts,
riots, wars or otherwise is assumed by Lessee, and Lessor shall in no event be
answerable or accountable therefor.
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ARTICLE XXV
25.1 ASSIGNMENT.
(a) Lessee may not assign, mortgage, pledge or encumber this
Lease or any of its rights or obligations hereunder in whole or in part
to any Person without the prior written consent of the Agent, the
Lessor and the Lenders, with such consent to be given or withheld in
the sole discretion of each such party.
(b) No such assignment or other relinquishment of possession
to any Property shall in any way discharge or diminish any of the
obligations of Lessee to Lessor hereunder and Lessee shall remain
directly and primarily liable under this Lease.
25.2 SUBLEASES.
(a) Except as set forth in this Section 25.2(a), Lessee may
not sublet any Property or portion thereof without first obtaining the
prior written consent of the Lessor and the Agent, which consent may be
given or withheld in the sole discretion of each such party.
(b) Lessee may, without the consent of Lessor or the Agent,
sublet a Property only if:
(i) Lessee remains fully liable for all obligations
(including without limitation all Rent and other obligations
with respect to such subleased Properties and any other
Properties) under this Lease, each Lease Supplement and the
other Operative Agreements;
(ii) Such sublease is in writing and is expressly
subject and subordinate to the rights of the Lessor, the
Agent, the Lenders and the Holders under this Lease, the
Security Agreement, each Mortgage Instrument and all other
Operative Agreements; and
(iii) Such sublease is on commercially reasonable
terms and at market rates, and has a term that does not extend
past the Expiration Date, and such Property is at all times
used for the purposes set forth in this paragraph and in the
definition of "Property."
(c) No sublease or other relinquishment of possession to any
Property shall in any way discharge or diminish any of Lessee's
obligations to Lessor hereunder and Lessee shall remain directly and
primarily liable under this Lease as to the Property so sublet.
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(d) Each insurance policy carried by Lessee pursuant to
ARTICLE XIV hereof shall be endorsed to name each sublessee under any
such sublease as an additional insured. Prior to the effectiveness of
any such sublease, Lessee shall deliver a copy thereof to the Lessor
and the Agent.
(e) Promptly but in any event within five (5) days following
the execution and delivery of any sublease permitted by this ARTICLE
XXV, Lessee shall notify Lessor and the Agent of the execution of such
sublease. As of the date of each Lease Supplement, Lessee shall lease
the respective Properties described in such Lease Supplement from
Lessor, and (without limiting the generality of SECTIONS 25.2(A) - (D))
any existing tenant respecting such Property shall automatically be
deemed to be a subtenant of Lessee and not a tenant of Lessor.
ARTICLE XXVI
26.1 NO WAIVER. No failure by Lessor or Lessee to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
upon a default hereunder, and no acceptance of full or partial payment of Rent
during the continuance of any such default, shall constitute a waiver of any
such default or of any such term. To the fullest extent permitted by law, no
waiver of any default shall affect or alter this Lease, and this Lease shall
continue in full force and effect with respect to any other then existing or
subsequent default.
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER. No surrender to Lessor of this Lease or
of all or any portion of any Property or of any part of any thereof or of any
interest therein shall be valid or effective unless agreed to and accepted in
writing by Lessor and the Agent, and no act by Lessor or the Agent or any
representative or agent of Lessor or the Agent, other than a written acceptance,
shall constitute an acceptance of any such surrender.
27.2 NO MERGER OF TITLE. There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) any right, title or interest in any Property, (c) any
Notes, or (d) a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 REPORTING COVENANTS. The Lessee covenants and agrees that, until
the obligations of the Lessee, the Construction Agent and the Guarantors under
the Operative Agreements have been paid and satisfied in full and the Operative
Agreements have been terminated in accordance with the terms thereof, unless the
Lessor and the Majority Lenders shall otherwise give their prior written consent
thereto:
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(a) FINANCIAL STATEMENTS. The Lessee shall maintain, and cause
each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business
practices to permit preparation of consolidated and consolidating Fin-
ancial Statements in conformity with GAAP and each of the Financial
Statements described below shall be prepared from such system and
records. The Lessee shall deliver or cause to be delivered to the
Agent, each Lender, each Holder and (upon Lessor's request) the Lessor:
(i) QUARTERLY REPORTS. As soon as practicable, and in
any event within forty-five (45) days after the end of each
fiscal quarter in each Fiscal Year, the consolidated and
consolidating balance sheets of the Lessee and its
Subsidiaries as at the end of such period and the related
consolidated and consolidating statements of income,
shareholders' equity and cash flow of the Lessee and its
Subsidiaries for the period from the beginning of the then
current Fiscal Year to the end of such fiscal quarter, setting
forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the financial forecast
for the current Fiscal Year delivered on the Initial Closing
Date or pursuant to SECTION 28.1(A)(V), as applicable,
certified by the chief financial officer of the Lessee as
fairly presenting the respective consolidated and
consolidating financial positions, as applicable, of the
Lessee and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods
indicated in accordance with GAAP, subject to normal year end
adjustments. Notwithstanding the foregoing, in the event (A)
the filing of the Lessee's Form 10-Q with the SEC with respect
to any fiscal quarter is delayed for any reason and Lessee has
provided the Lessor and the Agent with written notice of such
delay by the due date for the reports required for such
quarter under this CLAUSE (I) and (B) the Lessee shall deliver
either the required reports or interim good faith estimates of
the information required to be reported under this CLAUSE (I)
within fifty-five (55) days after the end of such fiscal
quarter, upon delivery of such required reports or interim
estimates within such period the Lessee shall be deemed to
have complied with the requirements of this CLAUSE (I) with
respect to such quarter PROVIDED THAT Lessee delivers the
required reporting substantially concurrently with Lessee's
filing of its Form 10-Q with the SEC.
(ii) ANNUAL REPORTS. As soon as practicable, and in
any event within ninety (90) days after the end of each Fiscal
Year, (A) the consolidated and consolidating balance sheets of
the Lessee and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated and consolidating statements
of income, shareholders' equity and cash flow of the Lessee
and its Subsidiaries (the "Financial Statements"), setting
forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding
figures from the financial forecast for the current Fiscal
Year delivered on the Initial Closing Date or pursuant to
SECTION 28.1(A)(V), as applicable, and (B) a report on such
Financial Statements of the Lessee and its Subsidiaries of
Arthur Andersen LLP or other National Accounting Firm which
may be selected from time to time by the Lessee (or other
independent certified public accountants acceptable to the
Lessor and the Agent), which report shall be unqualified
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and shall state that such Financial Statements fairly present
the consolidated and consolidating financial position of the
Lessee and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods
indicated in conformity with GAAP applied on a basis
consistent with prior years (except for changes with which
Arthur Andersen LLP or any such other independent certified
public accountants, if applicable, shall concur and which
shall have been disclosed in the notes to the Financial
Statements) and that the examination by such accountants in
connection with such Financial Statements has been made in
accordance with generally accepted auditing standards.
Notwithstanding the foregoing, in the event (1) the filing of
the Lessee's annual report with the SEC with respect to any
Fiscal Year is delayed for any reason and the Lessee has
provided the Lessor and the Agent with written notice of such
delay by the due date for the reports required for such Fiscal
Year under this CLAUSE (II) and (2) the Lessee shall deliver
either the required reports or interim good faith estimates of
the information required to be reported under this CLAUSE (II)
within one hundred (100) days after the end of each Fiscal
Year, upon delivery of such required reports or interim
estimates within such period the Lessee shall be deemed to
have complied with the requirements of this CLAUSE (II) with
respect to such Fiscal Year PROVIDED THAT the Lessee delivers
the required reporting substantially concurrently with
Lessee's filing of its annual report with the SEC.
(iii) OFFICER'S CERTIFICATE. Together with each
delivery of any Financial Statement pursuant to this SECTION
28.1(A), (A) an Officer's Certificate on behalf of the Lessee
substantially in the form of EXHIBIT C hereto stating that the
Person signatory thereto has reviewed the terms of the
Operative Agreements, and has made, or caused to be made under
his/her supervision, a review in reasonable detail of the
transactions and financial condition of the Lessee and its
Subsidiaries during the accounting period covered by such
Financial Statements, that such review has not disclosed the
existence during or at the end of such accounting period, and
that such Person does not have knowledge of the existence as
at the date of such Officer's Certificate, of any condition or
event which constitutes an Event of Default or Default, or, if
any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the
Lessee or any Subsidiary has taken, is taking and proposes to
take with respect thereto; and (B) a certificate (the
"Compliance Certificate"), signed by the Lessee's chief
financial officer, setting forth calculations (with such
specificity as the Lessor or the Agent may reasonably request)
for the period then ended which demonstrate compliance, when
applicable, with the provisions of SECTION 28.4.
(iv) ACCOUNTANT'S STATEMENT AND PRIVITY LETTER.
Together with each delivery of the Financial Statements
referred to in SECTION 28.1(A)(I), a written statement, in
form and substance satisfactory to the Lessor and the Agent,
of the firm of independent certified public accountants
giving the report thereon (A) stating that their audit
examination has included a review of the terms of this
Agreement as it relates to accounting matters, (B) stating
whether, in connection with their audit examination, any
condition or event which constitutes an Event of Default or
Default has come to
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their attention, and if such condition or event has come to
their attention, specifying the nature and period of existence
thereof; PROVIDED THAT such accountants shall not be liable by
reason of any failure to obtain knowledge of any such
condition or event that would not be disclosed in the course
of their audit examination, and (C) stating that based on
their audit examination nothing has come to their attention
which causes them to believe that the information contained in
either or both of the certificates delivered therewith
pursuant to SECTION 28.1(A)(III) (as the information contained
in such certificates relates to financial covenants set forth
in SECTION 28.4) is not correct or that the matters set forth
in the Compliance Certificate delivered therewith pursuant to
SECTION 28.1(A)(III)(B) for the applicable Fiscal Year are not
stated in accordance with the terms of this Agreement. The
statement referred to above shall be accompanied by (1) a copy
of the management letter or any similar report delivered to
the Lessee or any Subsidiary or to any officer or employee
thereof by such accountants in connection with such Financial
Statements and (2) a letter in substantially the form of
EXHIBIT M attached to the Existing Aviation Sales Credit
Agreement and made a part hereof from the Lessee to such
accountants informing such accountants that the Agent, the
Lessor, the Holders and the Lenders are relying upon the
Financial Statements audited by such accountants and delivered
to the Agent the Lessor, the Lenders and the Holders pursuant
to SECTION 28.1(A)(II). The Agent or the Lessor may, with the
written consent of the Lessee (which consent shall not be
unreasonably withheld or delayed), communicate directly with
such accountants.
(v) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS.
As soon as practicable and in any event not later than thirty
(30) days prior to the commencement of each Fiscal Year for
each of the Fiscal Years ending in 1999 and thereafter, (A) a
quarterly budget for the Lessee and its Subsidiaries for such
Fiscal Year; (B) an annual business plan for the Lessee and
its Subsidiaries for such Fiscal Year, substantially in the
form of the business plans heretofore delivered to the Lessor,
the Agent, the Lenders or the Holders, accompanied by a report
reconciling all changes and departures from the business plans
delivered to the Lessor, the Agent, the Lenders or the Holders
for the preceding Fiscal Year; and (C) a plan and financial
forecast, prepared in accordance with the Lessee's normal
accounting procedures applied on a consistent basis, for each
succeeding Fiscal Year until the Maturity Date, including,
without limitation, (1) forecasted consolidated and
consolidating balance sheets and statements of cash flow of
the Lessee and its Subsidiaries for each Fiscal Year, (2)
forecasted consolidated and consolidating balance sheets,
statements of earnings and retained earnings, and cash flow of
the Lessee and its Subsidiaries for and as of the end of each
fiscal quarter of the immediately succeeding Fiscal Year and
for and as of the end of each such Fiscal Year thereafter, (3)
the amount of forecasted Capital Expenditures for such Fiscal
Year, and (4) forecasted compliance with the provisions of
SECTION 28.4.
(b) EVENTS OF DEFAULT. Promptly upon any of the chief
executive officer, chief operating officer, chief financial officer,
treasurer or controller of the Lessee obtaining knowledge (i) of any
condition or event which constitutes an Event of Default or Default, or
becoming aware that the Lessor, the Agent, any Lender or any Holder has
given any notice
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with respect to a claimed Event of Default or Default, (ii) that any
Person has given any notice to the Lessee or taken any other action
with respect to a claimed default or event or condition of the type
referred to in SECTION 17.1(F), or (iii) of any condition or event
which has resulted, or is reasonably likely to result, in a Material
Adverse Effect, the Lessee shall deliver to the Agent and the Lessor an
Officer's Certificate specifying (A) the nature and period of existence
of any such claimed default, Event of Default, Default, condition or
event, (B) the notice given or action taken by such Person in
connection therewith, and (C) what action the Lessee has taken, is
taking and proposes to take with respect thereto.
(c) LAWSUITS.
(i) INSTITUTION OF PROCEEDINGS. Promptly upon the
Lessee obtaining knowledge of the institution of, or written
threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Lessee
or any Subsidiary, or any Asset not previously disclosed
pursuant to SECTION 7.3(D) of the Participation Agreement or
on Schedule I hereto, which action, suit, proceeding,
governmental investigation or arbitration exposes, or in the
case of multiple actions, suits, proceedings, governmental
investigations or arbitrations arising out of the same general
allegations or circumstances which expose, in the Lessee's
reasonable judgment, the Lessee and/or any Subsidiary to
liability in an amount aggregating $3,000,000 or more
(exclusive of claims covered by insurance policies of the
Lessee and its Subsidiaries unless the insurers of such claims
have disclaimed coverage or reserved the right to disclaim
coverage on such claims), the Lessee shall give written notice
thereof to the Lessor, the Agent, the Lenders and the Holders
and provide such other information as may be reasonably
available to enable each of the Lessor, the Agent, the Lenders
and the Holders and its counsel to evaluate such matters.
(ii) QUARTERLY REPORTS. As soon as practicable and in
any event within forty-five (45) days after the end of each
fiscal quarter of the Lessee, the Lessee shall provide a
written quarterly report to the Lessor, the Agent, the Lenders
and the Holders covering the institution of, or written threat
of, any action, suit, proceeding, governmental investigation
or arbitration (not previously reported) against or affecting
the Lessee or its Subsidiaries, or any Asset not previously
disclosed by the Lessee to the Lessor or the Agent, and shall
provide such other information at such time as may be
reasonably available to enable each of the Lessor, the Agent,
the Lenders and the Holders and its counsel to evaluate such
matters.
(iii) ADDITIONAL REPORTS UPON REQUEST. In addition to
the requirements set forth in CLAUSES (I) and (II) of this
SECTION 28.1(C), the Lessee, upon the request of the Lessor,
the Agent or the Majority Lenders, shall promptly give written
notice of the status of any action, suit, proceeding,
governmental investigation or arbitration covered by a report
delivered pursuant to either of such CLAUSES (I) or (II) and
provide such other information as may be reasonably available
to it to enable each of the Lessor, the Agent, the Lenders and
the Holders and their counsel to evaluate such matters.
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(d) ERISA NOTICES. The Lessee shall deliver or cause to be
delivered the Lessor, the Agent, the Lenders and the Holders, at the
Lessee's expense, the following information and notices as soon as
reasonably possible, and in any event:
(i) within ten (10) Business Days after any Borrower
or any ERISA Affiliate knows or has reason to know that a
Termination Event has occurred, a written statement of the
chief financial officer of the Lessee describing such
Termination Event and the action, if any, which the Lessee or
any ERISA Affiliate has taken, is taking or proposes to take
with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after the Lessee
knows or has reason to know that an assessment of a prohibited
transaction excise tax under Section 4975 of the Code has
occurred, a statement of the chief financial officer of the
Lessee describing such transaction and the action which such
Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto;
(iii) within three (3) Business Days after the filing
of the same with the DOL, IRS or PBGC, copies of each annual
report (form 5500 series), including Schedule B thereto, filed
with respect to each Benefit Plan;
(iv) within three (3) Business Days after receipt by
the Lessee or any ERISA Affiliate of each actuarial report for
any Benefit Plan or Multiemployer Plan and each annual report
for any Multiemployer Plan, copies of each such report;
(v) within three (3) Business Days after the filing
of the same with the IRS, a copy of each funding waiver
request filed with respect to any Benefit Plan and all
communications received by the Lessee or any ERISA Affiliate
with respect to such request;
(vi) within three (3) Business Days after the
occurrence any material increase in the benefits of any
existing Benefit Plan or the establishment of any new Benefit
Plan or the commencement of contributions to any Benefit Plan
to which the Lessee or any ERISA Affiliate was not previously
contributing, notification of such increase, establishment or
commencement;
(vii) within three (3) Business Days after the Lessee
or any ERISA Affiliate receives notice of the PBGC's intention
to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
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(viii) within three (3) Business Days after the
Lessee or any ERISA Affiliate receives notice of any
unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code,
copies of each such notice and letter;
(ix) within three (3) Business Days after the Lessee
or any ERISA Affiliate receives notice from a Multiemployer
Plan regarding the imposition of withdrawal liability, copies
of each such notice;
(x) within three (3) Business Days after the Lessee
or any ERISA Affiliate fails to make a required installment or
any other required payment under Section 412 of the Code on or
before the due date for such installment or payment, a
notification of such failure; and
(xi) within three (3) Business Days after the Lessee
or any ERISA Affiliate knows (A) a Multiemployer Plan has been
terminated, (B) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan,
or (C) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan.
For purposes of this SECTION 28.1(D), the Lessee and each ERISA
Affiliate shall be deemed to know all facts known by the Administrator
of any Plan of which the Lessee or any ERISA Affiliate is the plan
sponsor.
(e) ENVIRONMENTAL NOTICES. Without limiting the generality of
any other provision of any Operative Agreement, and other than with
respect to environmental matters described in the Schedules to the
Existing Aviation Sales Credit Agreement, the Lessee shall notify the
Lessor, the Agent, each Holder and each Lender in writing, promptly
upon the Lessee's learning thereof, of any:
(i) notice or claim to the effect that the Lessee or
any Subsidiary is or may be liable to any Person as a result
of the Release or threatened Release of any Contaminant into
the environment which could reasonably result in an
expenditure by the Lessees and/or any Subsidiary over
$500,000;
(ii) notice that the Lessee or any Subsidiary is
subject to investigation by any Governmental Authority
evaluating whether any Remedial Action is needed to respond to
the Release or threatened Release of any Contaminant into the
environment which could reasonably result in an expenditure by
the Lessee and/or any Subsidiary over $500,000;
(iii) notice that any Asset is subject to an
Environmental Lien;
(iv) notice to the Lessee or any Subsidiary of any
material violation of any Environmental, Health or Safety
Requirement of Law;
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(v) condition which might reasonably result in a
material violation of any Environmental, Health or Safety
Requirement of Law;
(vi) commencement or threat of any judicial or
administrative proceeding alleging a material violation by the
Lessee or any Subsidiary (or any predecessor in interest
thereof) of any Environmental, Health or Safety Requirement of
Law;
(vii) new or proposed changes to any existing
Environmental, Health or Safety Requirement of Law that could
result in a Material Adverse Effect;
(viii) any proposed acquisition of stock, assets,
real estate, or leasing of property, or any other action by
the Lessee or any Subsidiary that could subject the Borrower
or such Subsidiary to environmental, health or safety
Liabilities and Costs which could reasonably result in an
expenditure by the Borrowers and/or any Guarantor over
$500,000; or
(ix) any filing or report made by the Lessee or any
Subsidiary with any Governmental Authority with respect to any
unpermitted Release or threatened Release of a Contaminant
which could reasonably result in an expenditure by the Lessee
and/or any Subsidiary over $500,000.
(f) LABOR MATTERS. The Lessee shall notify the Lessor, the
Agent, each Holder and each Lender in writing, promptly upon the
Lessee's learning thereof, of (i) any material labor dispute to which
the Lessee or any Subsidiary may become a party, including, without
limitation, any strikes, lockouts or other grievances relating to the
Lessee's or any Subsidiary's plants and other facilities and (ii) any
liability relating to its employees incurred with respect to the
closing of any plant or other facility of the Lessee or any Subsidiary.
(g) SEC REPORTING. Promptly after the same are available, the
Lessee shall deliver to the Lessor, the Agent, each Holder and each
Lender copies of all Financial Statements, reports and notices,
registration statements and proxy statements or other filings, if any,
sent or made available generally by the Lessee and/or any Subsidiary to
its respective Securities holders or filed with the SEC or other
securities exchange.
(h) OTHER INFORMATION. Promptly upon receiving a request
therefor from the Lessor or the Agent, the Lessor shall prepare and
deliver to the Lessor, the Agent, each Holder and each Lender such
other information with respect to the Lessee and its Subsidiaries as
from time to time may be reasonably requested by the Lessor or the
Agent.
(i) YEAR 2000. The Lessee covenants and agrees that its and
its Subsidiaries' computer systems and equipment containing embedded
microchips (including systems and equipment supplied by others, with
which such systems interface or on which such Persons rely) will
function properly on December 31, 1999 and thereafter and the Lessee is
taking all necessary and appropriate action to reasonably ensure the
same.
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(j) ACCOMMODATION OBLIGATIONS. Promptly upon becoming aware of
any actual or potential "Accommodation Obligation" (as defined in the
Existing Aviation Sales Credit Agreement) of the Lessor or any of its
Subsidiaries (other than "Permitted Existing Accommodation Obligations"
(as defined in the Existing Aviation Sales Credit Agreement)), the
Lessee shall deliver notice of such actual or potential Accommodation
Obligation to the Lessor and the Agent.
28.2 AFFIRMATIVE COVENANTS. Without limiting the generality of any
other provision of any Operative Agreement, until the obligations of the Lessee,
the Construction Agent and the Guarantors under the Operative Agreements have
been paid and satisfied in full and the Operative Agreements have been
terminated in accordance with the terms thereof, unless the Lessor and the
Majority Lenders and the Agent shall otherwise consent in writing.
(a) EXISTENCE, ETC. The Lessee shall at all times maintain,
and cause each of its Subsidiaries to maintain, its corporate existence
and preserve and keep, or cause to be preserved and kept, in full force
and effect their respective rights and franchises material to their
respective businesses.
(b) CORPORATE POWERS; CONDUCT OF BUSINESS. The Lessee shall,
and shall cause each of its Subsidiaries to, qualify and remain
qualified to do business and maintain its good standing in each
jurisdiction in which the nature of its business and the ownership of
its Assets requires it to be so qualified and in good standing.
(c) COMPLIANCE WITH LAWS, ETC. The Lessee shall, and shall
cause each of its Subsidiaries to, (i) comply with all Requirements of
Law and all restrictive covenants affecting it or its business, Assets,
or operations, and (ii) obtain as needed all Permits necessary for its
operations and maintain such Permits in good standing, except in the
case where noncompliance with either CLAUSE (I) or (II) above is not
reasonably likely to result in a Material Adverse Effect.
(d) PAYMENT OF TAXES AND CLAIMS. The Lessee shall, and shall
cause each of its Subsidiaries to, file all tax returns and reports as
and when required by the related Governmental Authority and pay (i) all
taxes, assessments and other governmental charges imposed upon it or on
any of its Assets or in respect of any of its franchises, business,
income or Assets before any penalty or interest accrues thereon and
(ii) all "Claims" (as defined in the Existing Aviation Sales Credit
Agreement) (including, without limitation, claims for labor, services,
materials and supplies) for sums which have become due and payable and
which by law have or may become a Lien (other than a Lien permitted by
SECTION 28.3(C)) upon any of such Assets of the Lessee or any
Subsidiary of the Lessee, prior to the time when any penalty or fine
shall be incurred with respect thereto; PROVIDED, HOWEVER, that no such
taxes, assessments and governmental charges referred to in CLAUSE (I)
above or "Claims" referred to in CLAUSE (II) above need be paid if
being contested in good faith by appropriate proceedings diligently
instituted and conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall
have been made therefor.
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(e) INSURANCE. The Lessee and its Subsidiaries shall maintain
insurance with responsible insurance companies on such of its
properties, in such amounts and against such risks as is customarily
maintained by similar businesses operating in the same vicinity,
specifically to include fire and extended coverage insurance covering
all assets, business interruption insurance, workers compensation
insurance and liability insurance, all to be with such companies and in
such amounts as customary and usual with respect to insurance on its
Assets.
(f) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
The Lessee shall permit, and shall cause each of its Subsidiaries to
permit, any authorized representative(s) designated by either the
Lessor, the Agent, any Lender or any Holder to visit and inspect,
whether by access to the Lessee's or its Subsidiaries' MIS or
otherwise, any of the Assets, to examine, audit, check and make copies
of the Lessee's or its Subsidiaries' financial and accounting records,
books, journals, orders, receipts and any correspondence (other than
privileged correspondence with legal counsel) and other data relating
to their respective businesses or the transactions contemplated hereby
or referenced herein (including, without limitation, in connection with
environmental compliance, hazard or liability), and to discuss their
affairs, finances and accounts with their management personnel and
independent certified public accountants, all upon reasonable written
notice and at such reasonable times during normal business hours, as
often as may be reasonably requested. Each such visitation and
inspection (i) by or on behalf of the Lessor, any Lender or any Holder
(other than by the Agent) shall be at the Lessor's, such Lender's or
such Holder's expense and (ii) by or on behalf of the Agent shall be at
the Lessee's expense. The Lessee shall keep and maintain, and cause
each of its Subsidiaries to keep and maintain, in all material respects
on its MIS and otherwise proper books of record and account in which
entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its respective businesses and activities.
If an Event of Default has occurred and is continuing and an
Acceleration has occurred, the Lessee, upon the Lessor's or the Agent's
request in connection with efforts to enforce the rights and remedies
of the Agent, the Lenders or the Holders under the Operative
Agreements, shall turn over, and cause each of its Subsidiaries to turn
over, any such records requested by the Lessor or the Agent to the
Lessor or the Agent or their representatives; PROVIDED, HOWEVER, that
the Lessee may, in its discretion, retain copies of such records.
(g) ERISA COMPLIANCE. The Lessee shall, and shall cause each
of its Subsidiaries and its/their ERISA Affiliates to, establish,
maintain and operate all Plans to comply in all material respects with
the provisions of ERISA, the Code, all other applicable laws, and the
regulations and interpretations thereunder and the respective
requirements of the governing documents for such Plans.
(h) MAINTENANCE OF ASSETS. The Lessee shall, and shall cause
each of its Subsidiaries to, maintain in all material respects all of
its owned and leased Assets in good, safe and insurable condition and
repair, and not permit, commit or suffer any waste or abandonment of
any such Assets and from time to time shall make or cause to be made
all material repairs, renewal and replacements thereof, including,
without limitation, any capital
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improvements which may be required; PROVIDED, HOWEVER, that, subject to
the terms of the Operative Agreements, such Assets may be altered or
renovated in the ordinary course of the Lessee's or a Subsidiary's
business.
28.3 NEGATIVE COVENANTS. Without limiting the generality of any other
provision of any Operative Agreement, the Lessee covenants and agrees that it
shall, and shall cause each of its Subsidiaries to, comply with the following
covenants until the obligations of the Lessee, the Construction Agent and the
Guarantors under the Operative Agreements have been paid and satisfied in full
and the Operative Agreements have been terminated in accordance with the terms
thereof, unless the Lessor and the Majority Lenders shall otherwise give prior
written consent:
(a) INDEBTEDNESS. The Lessee shall not, nor shall it permit
any of its Subsidiaries to, directly or indirectly create, incur,
assume or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness, except:
(i) Indebtedness under the Operative Documents (to
the extent the obligations of the Lessee thereunder are
determined to constitute Indebtedness); and
(ii) Indebtedness permitted under SECTION 10.01 of
the Existing Aviation Sales Credit Agreement.
(b) SALES OF ASSETS. The Lessee shall not, nor shall it permit
any of its Subsidiaries to, sell, assign, transfer, lease, convey or
otherwise dispose of any of its Assets, whether now owned or hereafter
acquired, or any income or profits therefrom, or enter into any
agreement to do so, except:
(i) any sale of such Assets specifically permitted
by the terms of the Operative Agreements;
(ii) the sale of such Assets permitted under SECTION
10.02 of the Existing Aviation Sales Credit Agreement; and
(iii) the sale of Assets (A) to any Guarantor, (B) to
any Person upon arm's-length terms in the ordinary course of
business, or (C) to any Person upon arm's-length terms to the
extent such sale does not materially alter the business of the
Lessor and its Subsidiaries or otherwise have a Material
Adverse Effect.
(c) LIENS. The Lessee shall not, nor shall it permit any of
its Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist any Lien on or with respect to any of their respective
Assets except:
(i) Permitted Liens; and
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(ii) Liens permitted under SECTION 10.03 of the
Existing Aviation Sales Credit Agreement, subject, however, to
any other provisions on Liens set forth in the Operative
Agreements.
(d) INVESTMENTS. The Lessee shall not, nor shall it permit any
of its Subsidiaries to, directly or indirectly make or own any
Investments except Investments permitted under SECTION 10.04 of the
Existing Aviation Sales Credit Agreement.
(e) ACCOMMODATION OBLIGATIONS. The Lessee shall not, nor shall
it permit any of its Subsidiaries to, directly or indirectly create or
become or be liable with respect to any Accommodation Obligation,
except Accommodation Obligations permitted under SECTION 10.05 of the
Existing Aviation Sales Credit Agreement
(f) RESTRICTED JUNIOR PAYMENTS. The Lessee shall not, nor
shall it permit any of its Subsidiaries to, declare or make any
Restricted Junior Payment, except Restricted Junior Payments permitted
under SECTION 10.06 of the Existing Aviation Sales Credit Agreement.
(g) CONDUCT OF BUSINESS. The Lessee shall not, nor shall it
permit any of its Subsidiaries to, engage in any business other than
(i) the businesses engaged in by the Lessee or such Subsidiaries on the
date hereof, (ii) any business or activities which are substantially
similar, related, incidental or complimentary thereto, including,
without limitation, the business of repair of aircraft spare parts, and
(iii) the business of new parts distribution, parts manufacturing,
related engineering or inventory management services.
(h) TRANSACTIONS WITH AFFILIATES. The Lessee shall not, nor
shall it permit any of its Subsidiaries to, directly or indirectly
enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of the Lessee, on
terms that are less favorable to the Lessee or such Subsidiary than
those that might be obtained in an arm's length transaction at the time
from Persons who are not such an Affiliate. Nothing contained in this
SECTION 28.3(H) shall prohibit (i) any transaction expressly permitted
by SECTION 28.3(F); (ii) increases in compensation and benefits for
officers and employees of the Lessee or its Subsidiaries which are
customary in the industry; PROVIDED THAT no Event of Default or Default
has occurred and is continuing; (iii) payment of customary officers'
and directors' indemnities; or (iv) the sale or other transfer of
Inventory of the Lessee or a Subsidiary to a Guarantor; PROVIDED THAT
the sale or other transfer of such Inventory is otherwise permissible
under the terms of SECTION 10.02(E) of the Existing Aviation Sales
Credit Agreement.
(i) RESTRICTION ON FUNDAMENTAL CHANGES. The Lessee shall not
(i) enter into any merger or consolidation with respect to which it is
not the surviving corporation, (ii) permit any Foreign Subsidiary to
enter into any merger or consolidation, (iii) permit any of its
Subsidiaries to enter into any merger or consolidation or (iv)
repurchase or redeem any of its Capital Stock other than as required
with respect to the Permitted Equity Securities Options. The Lessee
shall not liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution), or convey, lease, sell, transfer or otherwise dispose of,
in one transaction or a series of trans-
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actions, all or substantially all of its business or Assets, whether
now or hereafter acquired, except in connection with transactions
permitted under SECTION 28.3(B) or permit any of its Subsidiaries to
(a) liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution) or (b) convey, lease, sell, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or
substantially all of their respective businesses or Assets, whether now
or hereafter acquired, except in connection with transactions permitted
under SECTION 28.3(B), but in each case subject to any other provisions
of the Operative Agreements.
(j) SALES AND LEASEBACKS. Except for the Guaranty or any other
guaranties contained in the Operative Agreements, the Lessee shall not,
nor shall it permit any of its Subsidiaries to, become liable,
directly, by assumption or by Accommodation Obligation, with respect to
any lease, whether an Operating Lease or a Capital Lease, of any Assets
(whether real or personal property or mixed property) which it (a) sold
or transferred or is to sell or transfer to any other Person, or (b)
intends to use for substantially the same purposes as any other Asset
which has been or is to be sold or transferred by it to any other
Person, in either instance, in connection with such lease.
(k) ERISA. The Lessee shall not:
(i) engage, or permit any ERISA Affiliate to engage,
in any prohibited transaction described in Sections 406 of
ERISA or 4975 of the Internal Revenue Code for which a
statutory or class exemption is not available or a private
exemption has not been previously obtained from the DOL;
(ii) permit to exist any accumulated funding
deficiency (as defined in Sections 302 of ERISA and 412 of the
Internal Revenue Code), with respect to any Benefit Plan,
whether or not waived;
(iii) fail, or permit any ERISA Affiliate to fail, to
pay timely required contributions or annual installments due
with respect to any waived funding deficiency to any Benefit
Plan;
(iv) terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan which would result in any
liability of any Borrower or any ERISA Affiliate under Title
IV of ERISA;
(v) fail to make any contribution or payment to any
Multiemployer Plan which any Borrower or any ERISA Affiliate
may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(vi) fail, or permit any ERISA Affiliate to fail, to
pay any required installment or any other payment required
under Section 412 of the Code on or before the due date for
such installment or other payment; or
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(vii) amend, or permit any ERISA Affiliate to amend,
a Benefit Plan resulting in an increase in current liability
for the plan year such that the Borrower or any ERISA
Affiliate is required to provide security to such Plan under
Section 401(a)(29) of the Code;
if such event results, either singly or in the aggregate, after taking
into account all other such events and any liabilities associated
therewith, in an aggregate liability of the Lessee and its Subsidiaries
in excess of $500,000.
(l) ISSUANCE OF EQUITY SECURITIES. The Lessee shall not permit
any of its Subsidiaries to issue any equity Securities.
(m) ORGANIZATIONAL DOCUMENTS; FINANCE AFFILIATE INDEBTEDNESS.
The Lessee shall not, nor shall it permit any of its Subsidiaries to,
amend, modify or otherwise change any of the terms or provisions in any
of (a) its Organizational Documents as in effect on the Initial Closing
Date, except amendments to effect a change of name of the Lessee or a
Subsidiary, written notice of which change of name shall have provided
the Lessor and the Agent within sixty (60) days prior to the effective
date of any such name change, or (b) the agreements and instruments
evidencing the Finance Affiliate Indebtedness as in effect on the
Effective Date or (c) the agreements and instruments evidencing loans
and advances comprising part of the Leasing Affiliate Liabilities or
other loans and advances comprising intercompany loans.
(n) CHANGE OF CONTROL. The Lessee shall not permit any Change
of Control to occur.
28.4 FINANCIAL COVENANTS. Until the obligations of the Lessee, the
Construction Agent and the Guarantors under the Operative Agreements have been
paid and satisfied in full, and the Operative Agreements have been terminated in
accordance with the terms thereof, unless the Majority Lenders and the Agent
shall otherwise consent in writing, the Lessee will not, nor will it permit any
Subsidiary to:
(a) CONSOLIDATED TANGIBLE NET WORTH. Permit Consolidated
Tangible Net Worth to be less than (i) $78,779,000 as of September 30,
1998 and at the Initial Closing Date, and (ii) as at the last day of
each succeeding fiscal quarter of Lessee and until (but excluding the
last day of the next following fiscal quarter of Lessee, the sum of (A)
the amount of Consolidated Tangible Net Worth required to be maintained
pursuant to this Section as at the end of the immediately preceding
fiscal quarter, plus (B) 75% of Consolidated Net Income (with no
reduction for net losses during any period) for the fiscal quarter of
Lessee ending on such day (including within "Consolidated Net Income"
certain items otherwise excluded, as provided for in the definition of
"Consolidated Net Income"), plus (C) 100% of the aggregate amount of
all increases in the stated capital and additional paid-in capital
accounts of Lessee resulting from the issuance of equity securities or
other capital investments.
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(b) CONSOLIDATED FUNDED DEBT-TO-EBITDA RATIO. Permit the
Consolidated Funded Debt-to-EBITDA Ratio as of the end of any
Four-Quarter Period to be greater than that set forth below opposite
each such period:
CONSOLIDATED FUNDED
DEBT-TO-EBITDA
FOUR-QUARTER PERIOD ENDING ON RATIO MUST BE LESS THAN
Any date from September 30, 1998 5.50 to 1.00
through June 30, 1999
September 30, 1999 through 5.00 to 1.00
June 30, 2000
September 30, 2000 or any date 4.50 to 1.00
thereafter
(c) CONSOLIDATED SENIOR DEBT-TO-EBITDA RATIO. Permit the ratio
of Consolidated Senior Debt to Consolidated EBITDA as of the end of any
Four-Quarter Period to be greater than that set forth below opposite
each such period:
CONSOLIDATED SENIOR
DEBT-TO-EBITDA
FOUR-QUARTER PERIOD ENDING ON RATIO MUST BE LESS THAN
Any date from September 30, 1998 3.50 to 1.00
through June 30, 2000
September 30, 2000 or any date 3.25 to 1.00
thereafter
(d) CONSOLIDATED FIXED CHARGE RATIO. Permit the Consolidated
Fixed Charge Ratio during any Four-Quarter Period to be less than 1.25
to 1.00.
(e) CAPITAL EXPENDITURES. Permit Capital Expenditures made by
the Lessee and its Subsidiaries during any Fiscal Year, beginning with
the Fiscal Year commencing on January 1, 1999, to exceed an aggregate
amount of $15,000,000.
ARTICLE XXIX
29.1 NOTICES. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing and delivered personally or
by a nationally recognized overnight courier service or mailed (by registered or
certified mail, return receipt requested, postage prepaid) or telecopied with a
confirming notice, addressed to the respective parties, as follows:
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If to Lessee:
Aviation Sales Company
6905 NW 25th Street
Miami, Florida 33122
Attention: Joseph Civiletto
Chief Financial Officer
Telephone No.: (305) 599-6693
Telecopy No.: (305) 599-6610
With a copy to:
Akerman, Senterfitt & Eidson, P.A.
SunTrust International Center, 28th Floor
One Southeast Third Avenue
Miami, Florida 33131
Attention: Philip B. Schwartz
Telephone No.: (305) 374-5600
Telecopy No.: (305) 374-5095
provided, however, that the failure to deliver such copy shall not
affect the validity of any notice otherwise delivered in accordance
with this section.
If to Lessor:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Val T. Orton
Telephone No.: (801) 246-5630
Telecopy No.: (801) 246-5053
with a copy to the Agent:
(i) if by certified or registered mail:
NationsBank, National Association
P.O. Box 407090
Fort Lauderdale, Florida 33340-7090
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
(ii) if by hand-delivery, courier service or telecopy:
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NationsBank, National Association
One Financial Plaza
10th Floor
Fort Lauderdale, Florida 33394
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
or such additional parties or other address as such party may hereafter
designate, and shall be effective upon receipt or refusal thereof.
ARTICLE XXX
30.1 MISCELLANEOUS. Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any provision of
this Lease shall be held to be unenforceable in any jurisdiction, such
unenforceability shall not affect the enforceability of any other provision of
this Lease and such jurisdiction or of such provision or of any other provision
hereof in any other jurisdiction.
30.2 AMENDMENTS AND MODIFICATIONS. Neither this Lease, any Lease
Supplement nor any provision hereof may be amended, waived, discharged or
terminated except by an instrument in writing in recordable form signed by
Lessor and Lessee.
30.3 SUCCESSORS AND ASSIGNS. All the terms and provisions of this Lease
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
30.4 HEADINGS AND TABLE OF CONTENTS. The headings and table of contents
in this Lease are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
30.5 COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
30.6 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS, EXCEPT TO THE EXTENT THE LAWS OF THE
STATE IN WHICH A PROPERTY IS LOCATED MAY GOVERN MATTERS RELATING TO THE
PERFECTION, FORECLOSURE AND ENFORCEMENT OF LIENS ON SUCH PROPERTY.
30.7 CALCULATION OF RENT. All calculation of Rent payable hereunder
shall be computed based on the actual number of days elapsed over a year of 360
days.
30.8 MEMORANDA OF LEASE AND LEASE SUPPLEMENTS. This Lease shall not be
recorded; provided Lessor and Lessee shall promptly record a Memorandum of this
Lease and of the applicable
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Lease Supplement (in substantially the form of EXHIBIT B attached hereto)
regarding each Property promptly after the acquisition thereof in the local
filing office with respect thereto in all cases at Lessee's cost and expense,
and as required under applicable law to sufficiently evidence this Lease or any
such Lease Supplement in the applicable real estate filing records.
30.9 ALLOCATIONS BETWEEN THE LENDERS AND THE HOLDERS. Notwithstanding
any other term or provision of this Lease to the contrary, the allocations of
the proceeds of the Properties and any and all other Rent and other amounts
received hereunder shall be subject to the inter-creditor provisions between the
Lenders and the Holders contained in the Operative Agreements (or as otherwise
agreed among the Lenders and the Holders from time to time).
30.10 LIMITATIONS ON RECOURSE. Notwithstanding anything contained in
this Lease to the contrary, Lessee agrees to look solely to Lessor's estate and
interest in the Properties for the collection of any judgment requiring the
payment of money by Lessor in the event of liability by Lessor, and no other
property or assets of Lessor or any shareholder, owner or partner (direct or
indirect) in or of Lessor, or any director, officer, employee, beneficiary,
Affiliate of any of the foregoing shall be subject to levy, execution or other
enforcement procedure for the satisfaction of the remedies of Lessee under or
with respect to this Lease, the relationship of Lessor and Lessee hereunder or
Lessee's use of the Properties or any other liability of Lessor to Lessee,
EXCEPT to the extent expressly provided in SECTION 10.2(A) or 14.11(B) of the
Participation Agreement. Nothing in this Section shall be interpreted so as to
limit the terms of SECTIONS 6.1 OR 6.2.
30.11 WAIVERS OF JURY TRIAL. THE LESSOR AND THE LESSEE IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS LEASE OR ANY COUNTERCLAIM THEREIN.
30.12 ORIGINAL LEASES. The single executed original of this Lease
marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the signature
page thereof and containing the receipt of the Agent therefor on or following
the signature page thereof shall be the original executed counterpart of this
Lease (the "Original Executed Counterpart"). To the extent that this Lease
constitutes chattel paper, as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction, no security interest in this
Lease may be created through the transfer or possession of any counterpart other
than the Original Executed Counterpart.
30.13 MORTGAGE GRANT AND REMEDIES. Without limiting any other remedies
set forth in this Lease, in the event that a court of competent jurisdiction
rules that this Lease constitutes a mortgage, deed of trust, security deed or
other secured financing, as is the intent of the parties, then the Lessor and
the Lessee agree that the Lessee hereby grants, bargains, sells, conveys,
mortgages, and grants a security interest in each Property to Lessor WITH POWER
OF SALE to secure the payment of all sums due and owing by Lessee or the
Construction Agent hereunder or under any other Operative Agreement, and that,
upon the occurrence of any Event of Default, the Lessor shall have the power and
authority, to the extent provided by law or the Operative Agreements, after
prior notice and lapse of such time as may be required by law, to foreclose its
interest (or cause such interest to be foreclosed) in all or any part of any
Property, to appoint or obtain the appointment of a receiver for
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all or any part of the Property, and to exercise any other right or remedy that
may be available under applicable law to the holder of a mortgage, deed of
trust, security deed or other secured financing.
30.14 EXERCISE OF LESSOR RIGHTS. The Lessee hereby acknowledges and
agrees that the rights and powers of the Lessor under this Lease have been
collaterally assigned to the Agent pursuant to the terms of the Security
Agreement and the other Operative Agreements, and that the Lessor has encumbered
the Properties by various Mortgage Instruments made by the Lessor in favor of
the Agent, all as security for certain indebtedness and obligations described
therein of the Lessor to the Agent, the Lenders and the Holders under the
Operative Agreements. Lessee hereby consents to said assignment and said
Mortgage Instruments in favor of the Agent and further acknowledges and agrees
as follows:
(a) In the event that a court of competent jurisdiction rules
that this Lease constitutes a mortgage, deed of trust, security deed or
other secured financing as is the intent of the parties, then the
Lessor and the Lessee agree that the Lessor's collateral assignment of
this Lease to the Agent shall be deemed to be a collateral assignment
of such mortgage, deed of trust, security deed or other secured
financing, and the Agent as such collateral assignee shall be entitled
to exercise any and all rights and remedies of the Lessor set forth
herein during the existence of any Event of Default, including without
limitation the Lessor's rights to obtain a receiver, to obtain
possession of the Properties and the rents and revenues thereof, to
foreclose this Lease, to sell the Lessee's interest in the Properties,
and to exercise any other rights or remedies that may then be available
to the Lessor under applicable law on account of such Event of Default.
(b) Lessee's interest in the Properties is junior and
subordinate to the lien of any Mortgage Instruments made by the Lessor
in favor of the Agent against the respective Properties from time to
time in connection with the Operative Agreements; provided, however,
that for so long as no Event of Default shall have occurred and be
continuing, (i) the Agent shall not disturb Lessee's possession of the
Properties through any foreclosure or other remedial action against the
Properties under any Mortgage Instrument, and (ii) if Lessor's interest
in any Property shall be transferred to any Person other than the
Lessee as the result of the Agent's foreclosure or other remedial
action under any Mortgage Instrument, the Lessee shall (upon request of
the Agent) attorn to such transferee and recognize the transferee as
the Lessee's landlord under this Lease.
(c) During the existence of an Event of Default, the Agent as
holder of the Mortgage Instruments and as collateral assignee of this
Lease may exercise any and all rights and remedies that may then be
available under applicable law to the Agent in either or both
capacities, whether exercised singly, successively or concurrently.
Without limiting the generality of the foregoing, the Agent as
collateral assignee may enforce the Lessee's payment obligations under
this Lease (regardless of whether this Lease shall be deemed a
mortgage, deed of trust, security deed or other secured financing) even
if Lessee's interest and estate in any Property under this Lease shall
have been extinguished or forfeited under applicable law through the
foreclosure or other enforcement of any Mortgage Instrument.
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IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
WITNESS: AVIATION SALES COMPANY, as Lessee
By:_________________________ By:_____________________________________
Name:_______________________ Name:___________________________________
Title:__________________________________
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely
as Owner Trustee under the Aviation Sales
WITNESS: Trust 1998-1, as Lessor
By:_________________________ By:_____________________________________
Name:_______________________ Name:___________________________________
Title:__________________________________
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as of the date hereof
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
By:_________________________
Name:_______________________
Title:______________________
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[MAY BE MODIFIED, IF AGREEABLE TO LESSEE, LESSOR AND AGENT TO
CONFORM TO REQUIREMENTS OF LOCAL LAW WHERE PROPERTY IS LOCATED]
EXHIBIT A TO THE LEASE
LEASE SUPPLEMENT NO. __
THIS LEASE SUPPLEMENT NO. __ (this "Lease Supplement") dated as of
[__________] between FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, but solely as Owner Trustee under the Aviation Sales Trust 1998-1,
as lessor (the "Lessor"), and AVIATION SALES COMPANY, as lessee (the "Lessee").
WHEREAS, the Lessor is the owner or will be the owner of the Property
described on SCHEDULE I hereto (the "Leased Property") and wishes to lease the
same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in APPENDIX A to the Participation Agreement,
dated as of December 17, 1998, among Aviation Sales Company, as Construction
Agent, Lessee, the Lessor, not individually, except as expressly stated therein,
but solely as Owner Trustee under the Aviation Sales Trust 1998-1, the Holders
party thereto, the Lenders party thereto, and NationsBank, National Association,
as Agent for the Lenders (as such agreement may be amended, modified,
supplemented or restated from time to time).
SECTION 2. THE PROPERTIES. Attached hereto as Schedule I is the
description of the Leased Property, with an Equipment Schedule attached hereto
as Schedule I-A, an Improvement Schedule attached hereto as Schedule I-B and a
legal description of the Land for such Project attached hereto as Schedule I-C.
Effective upon the execution and delivery of this Lease Supplement by the Lessor
and the Lessee, the Leased Property shall be subject to the terms and provisions
of the Lease.
SECTION 3. USE OF PROPERTY. At all times during the Term with respect
to each Property, Lessee will comply with all obligations under and (to the
extent no Event of Default has occurred and is continuing and provided that such
exercise will not impair the value of such Property) shall be permitted to
exercise all rights and remedies under, all operation and easement agreements
and related or similar agreements applicable to such Property.
SECTION 4. RATIFICATION. Except as specifically modified hereby, the
terms and provisions of the Lease and the Operative Agreements are hereby
ratified and confirmed and remain in full force and effect.
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SECTION 5. ORIGINAL LEASE SUPPLEMENT. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. AS TO MATTERS RELATING TO THE CREATION,
PERFECTION, AND FORECLOSURE OF LIENS, AND ENFORCEMENT OF RIGHTS AND REMEDIES
AGAINST THE LEASED PROPERTY, THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ________________ WITHOUT
REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF LAWS. THIS LEASE
SUPPLEMENT SHALL IN ALL OTHER RESPECTS BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA.
SECTION 7. MORTGAGE GRANT AND REMEDIES. Without limiting any other
remedies set forth in the Lease, in the event that a court of competent
jurisdiction rules that the Lease constitutes a mortgage, deed of trust,
security deed or other secured financing as is the intent of the parties, then
the Lessor and the Lessee agree that the Lessee hereby grants, bargains, sells,
conveys, mortgages, and grants a security interest in each Property to Lessor
WITH POWER OF SALE to secure the payment of all sums due and owing by Lessee or
the Construction Agent hereunder or under any other Operative Agreement, and
that, upon the occurrence of any Event of Default, the Lessor shall have the
power and authority, to the extent provided by law or the Operative Agreements,
after prior notice and lapse of such time as may be required by law, to
foreclose its interest (or cause such interest to be foreclosed) in all or any
part of any Property, to appoint or obtain the appointment of a receiver for all
or any part of the Property, and to exercise any other right or remedy that may
be available under applicable law to the holder of a mortgage, deed of trust,
security deed or other secured financing.
SECTION 8. EXERCISE OF LESSOR RIGHTS. The Lessee hereby acknowledges
and agrees that the rights and powers of the Lessor under the Lease have been
collaterally assigned to the Agent pursuant to the terms of the Security
Agreement and the other Operative Agreements, and that the Lessor has encumbered
the Properties by various Mortgage Instruments made by the Lessor in favor of
the Agent, all as security for certain indebtedness and obligations described
therein of the Lessor to the Agent, the Lenders and the Holders under the
Operative Agreements. Lessee hereby consents to said assignment and said
Mortgage Instruments in favor of the Agent and further acknowledges and agrees
as follows:
(i) In the event that a court of competent jurisdiction rules
that the Lease constitutes a mortgage, deed of trust, security deed or
other secured financing as is the intent of the parties, then the
Lessor and the Lessee agree that the Lessor's collateral assignment of
the Lease to the Agent shall be deemed to be a collateral assignment of
such mortgage, deed of
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trust, security deed or other secured financing, and the Agent as such
collateral assignee shall be entitled to exercise any and all rights
and remedies of the Lessor set forth herein during the existence of any
Event of Default, including without limitation the Lessor's rights to
obtain a receiver, to obtain possession of the Properties and the rents
and revenues thereof, to foreclose the Lease, to sell the Lessee's
interest in the Properties, and to exercise any other rights or
remedies that may then be available to the Lessor under applicable law
on account of such Event of Default.
(ii) Lessee's interest in the Properties is junior and
subordinate to the lien of any Mortgage Instruments made by the Lessor
in favor of the Agent against the respective Properties from time to
time in connection with the Operative Agreements; provided, however,
that for so long as no Lease Event of Default shall have occurred and
be continuing, (i) except to the extent permitted by SECTION 5.1 of the
Lease, the Agent shall not disturb Lessee's possession of the
Properties through any foreclosure or other remedial action against the
Properties under any Mortgage Instrument, and (ii) if Lessor's interest
in any Property shall be transferred to any Person other than the
Lessee as the result of the Agent's foreclosure or other remedial
action under any Mortgage Instrument, the Lessee shall (upon request of
the Agent) attorn to such transferee and recognize the transferee as
the Lessee's landlord under the Lease.
(iii) During the existence of an Event of Default, the Agent
as holder of the Mortgage Instruments and as collateral assignee of the
Lease may exercise any and all rights and remedies that may then be
available under applicable law to the Agent in either or both
capacities, whether exercised singly, successively or concurrently.
Without limiting the generality of the foregoing, the Agent as
collateral assignee may enforce the Lessee's payment obligations under
the Lease (regardless of whether the Lease shall be deemed a mortgage,
deed of trust, security deed or other secured financing) even if
Lessee's interest and estate in any Property under this Lease shall
have been extinguished or forfeited under applicable law through the
foreclosure or other enforcement of any Mortgage Instrument.
SECTION 9. COUNTERPART EXECUTION. This Lease Supplement may be executed
in any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as Owner
Trustee under the Aviation Sales Trust 1998-1,
as Lessor
By:_____________________________________
Name:___________________________________
Title:__________________________________
LESSEE:
AVIATION SALES COMPANY, as Lessee
By:_____________________________________
Name:___________________________________
Title:__________________________________
52
<PAGE>
Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.
NATIONSBANK, NATIONAL ASSOCIATION, as
Agent
By:_____________________________________
Name:___________________________________
Title:__________________________________
53
<PAGE>
STATE OF ________________ )
) ss:
COUNTY OF ____________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County and State aforesaid of this ____ day of
___________, 199_, by _________ ______________, as __________ of FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, not individually,
but solely as Owner Trustee under the Aviation Sales Trust 1998-1, on behalf of
the Owner Trustee.
[Notarial Seal] ______________________________
Notary Public
My commission expires:__________
STATE OF ________________ )
) ss:
COUNTY OF ____________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County and State aforesaid this ____ day of
__________, 199_, by ____________ ________________, as _____________ of AVIATION
SALES COMPANY, a Florida corporation, on behalf of the corporation.
[Notarial Seal] ______________________________
Notary Public
My commission expires:__________
STATE OF _________________ )
) ss:
COUNTY OF _____________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County and State aforesaid this ____ day of
__________, 199_, by ____________ _________________, as _______________ of
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association, as Agent.
[Notarial Seal] ______________________________
Notary Public
My commission expires:__________
54
EXHIBIT 10.3
GUARANTY AGREEMENT
(Series A Obligations)
between
AVIATION SALES COMPANY,
THE OTHER GUARANTORS SIGNATORY HERETO
and
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Series A Lenders
Dated as of December 17, 1998
- --------------------------------------------------------------------------------
<PAGE>
GUARANTY AGREEMENT
(SERIES A OBLIGATIONS)
THIS GUARANTY AGREEMENT (SERIES A OBLIGATIONS) (the "Guaranty
Agreement" or the "Guaranty"), dated as of December 17, 1998 is made by AVIATION
SALES COMPANY, a Delaware corporation ("Aviation Sales" or the "Lessee") and THE
OTHER GUARANTORS SIGNATORY HERETO (collectively with Aviation Sales, the
"Guarantors") to NATIONSBANK, NATIONAL ASSOCIATION, as Administrative Agent (the
"Agent") for the ratable benefit of the Series A Lenders (as defined in the
Participation Agreement referred to below).
W I T N E S S E T H:
WHEREAS, the Agent and First Security Bank, N.A. (the "Borrower") have
entered into the Credit Agreement dated as of the date hereof (as from time to
time amended, modified, restated or supplemented, the "Credit Agreement"); and
Aviation Sales, as Construction Agent (the "Construction Agent"), Aviation
Sales, as Lessee (the "Lessee"), the Borrower, the Holders party thereto from
time to time, the Lenders party thereto from time to time, and the Agent have
entered into the Participation Agreement dated as of the date hereof (as from
time to time amended, modified, restated or supplemented, the "Participation
Agreement"); and
WHEREAS, pursuant to the Credit Agreement, the Participation Agreement
and certain other Operative Agreements (as defined in the Participation
Agreement), the Lenders with respect to the Series A Loans (the "Series A
Lenders") will extend a credit facility to the Borrower in the aggregate
principal amount of up to the aggregate Commitments for Series A Loans under the
Credit Agreement; and
WHEREAS, the proceeds of the Series A Loans will be used by the
Borrower to acquire and improve certain Properties which will be leased by the
Borrower to the Lessee as set forth in the Operative Agreements; and
WHEREAS, it is condition to the obligations of the Series A Loans under
the Credit Agreement that the Guarantors execute and deliver this Guaranty
Agreement; and
WHEREAS, Aviation Sales is the Lessee of the Properties and the other
Guarantors are direct or indirect subsidiaries of Aviation Sales, all of which
will materially benefit from (a) the Series A Lenders' extension of the credit
facility and making of Series A Loans to the Borrower, and (b) the Borrower's
acquisition and improvement of the Properties and its lease of the Properties to
the Lessee; and the Guarantors are willing to enter into this Guaranty to
provide an inducement for the Series A Lenders to extend the credit facility and
make Series A Loans to the Borrower;
NOW, THEREFORE, as required under the Operative Agreements and in order
to induce the Series A Lenders to extend the credit facility and to make Series
A Loans, each Guarantor agrees as follows:
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<PAGE>
1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement or (if
not defined in the Credit Agreement) in the Participation Agreement.
2. GUARANTY. Each Guarantor hereby, effective immediately following the
Completion of a Property (the "Completion Date"), unconditionally, absolutely,
continually and irrevocably guarantees to the Agent and the Series A Lenders the
payment in full of the Borrower's Liabilities (as defined below). For all
purposes of this Guaranty Agreement, "Borrower's Liabilities" means: the
Borrower's prompt payment in full, when due or declared due and at all such
times, of all Series A Loans and all other amounts pursuant to the terms of the
Credit Agreement, the Series A Notes and all other Operative Agreements
heretofore, now or at any time or times hereafter owing, arising, due or payable
from the Borrower to the Series A Lenders (or to the Agent on behalf of the
Series A Lenders), including without limitation all principal and interest on
any Series A Loans, and any fees or expenses (including, but not limited to,
attorneys' fees and expenses). Each Guarantor's obligations to the Agent and the
Series A Lenders under this Guaranty Agreement are hereinafter collectively
referred to as the "Guarantors' Obligations".
Each Guarantor agrees that, as of the Completion Date it shall be
directly and primarily liable for the Borrower's Liabilities.
3. PAYMENT. If the Borrower shall, on or after the Completion Date
default in payment of any Borrower's Liabilities, when and as the same shall
become due (and such default is not cured within the applicable grace period, if
any), whether according to the terms of the Credit Agreement, any Series A Note
or any other Operative Agreement, by acceleration, or otherwise, or upon the
occurrence of any other Event of Default that has not been cured or waived, then
each Guarantor, upon demand thereof by the Agent, or its successors or assigns,
will AS OF THE DATE OF THE AGENT'S DEMAND fully pay to the Agent (for the
benefit of the Series A Lenders), an amount equal to all of the Guarantors'
Obligations then due and owing.
4. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and not of
collection. The Guarantors' Obligations under this Guaranty Agreement shall be
absolute and unconditional irrespective of the validity, legality or
enforceability of the Credit Agreement, any Series A Note or any other Operative
Agreement, or any other guaranty of the Borrower's Liabilities, and shall not be
affected by any action taken under the Credit Agreement, any Series A Note or
any other Operative Agreement, any other guaranty of the Borrower's Liabilities,
or any other agreement between the Borrower and the Agent, any Series A Lender
or any other Person, in the exercise of any right or power therein conferred, or
by any failure or omission to enforce any right conferred thereby, or by any
waiver of any covenant or condition therein provided, or by any acceleration of
the maturity of any of the Borrower's Liabilities, or by the release or other
disposal of any security for any of the Borrower's Liabilities, or by the
dissolution of the Lessee or the combination or consolidation of the Lessee or
the Borrower into or with another entity or any transfer or disposition of any
assets of the Lessee or the Borrower, or by any extension or renewal of the
Credit Agreement, any Series A Note or any other Operative Agreement, in whole
or in part, or by any modification, alteration, amendment or addition of or to
the Credit Agreement, any Series A Note or any other Operative Agreement, any
other guaranty of the Borrower's Liabilities, or any other agreement between the
Borrower and the
3
<PAGE>
Agent, any Series A Lender or any other Person, or by any defense to or
avoidance or rejection (by a bankruptcy trustee or otherwise) of the Credit
Agreement, any Series A Note or any other Operative Agreement in any bankruptcy
or similar proceeding, or by any other circumstance whatsoever (with or without
notice to or knowledge of any Guarantor) which may or might in any manner or to
any extent vary the risks of any Guarantor, or might otherwise constitute a
legal or equitable discharge of a surety or guarantor; it being the purpose and
intent of the parties hereto that this Guaranty Agreement and the Guarantors'
Obligations hereunder shall be absolute and unconditional under any and all
circumstances and shall not be discharged except by payment as herein provided.
Without limiting the generality of the foregoing, each Guarantor acknowledges
and agrees that (a) the Guarantors' Obligations are absolute and separate from
the Borrower's obligations under the Credit Agreement, any Series A Note or any
other Operative Agreement, (b) the Guarantors' Obligations hereunder shall not
be reduced, limited or otherwise affected if the Credit Agreement, any Series A
Note or any other Operative Agreement is avoided, rejected or limited as an
executory contract in a bankruptcy or similar proceeding, and (c) for the
purpose of defining the Guarantor's Obligations, hereunder, the amount of the
Borrower's Liabilities shall include without limitation all principal and
interest on any Series A Loan and any other amount which is due or may become
due under the Credit Agreement, any Series A Note or any other Operative
Agreement, including without limitation any principal, interest or other amount
that would have been payable at any time but for the avoidance, rejection or
limitation of any Operative Agreement in a bankruptcy or similar proceeding.
5. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby guarantees that
the Guarantor's Obligations will be paid in lawful currency of the United States
of America and in immediately available funds, regardless of any law, regulation
or decree now or hereafter in effect that might in any manner affect the
Borrower's Liabilities, or the rights of the Agent (or any Series A Lender) with
respect thereto as against the Borrower, or cause or permit to be invoked any
alteration in the time, amount or manner of payment by the Lessee of any or all
of the Borrower's Liabilities.
6. EVENTS OF DEFAULT. In the event that (a) any Guarantor shall file a
petition to take advantage of any insolvency statute; (b) any Guarantor shall
commence or suffer to exist a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or substantially
all of its property; (c) any Guarantor shall file a petition or answer seeking
reorganization or arrangement or similar relief under the Federal bankruptcy
laws or any other applicable law or statute of the United States of America or
any state or similar law of any other country; (d) a court of competent
jurisdiction shall enter an order, judgment or decree appointing a custodian,
receiver, trustee, liquidator or conservator of any Guarantor or of the whole or
substantially all of its properties, or approve a petition filed against any
Guarantor seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country, or if, under
the provisions of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of any Guarantor or of
the whole or substantially all of its properties and such order, judgment,
decree, approval or assumption remains unstayed or undismissed for a period of
sixty (60) consecutive days; (e) there is commenced against any Guarantor any
proceeding or petition seeking reorganization, arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which proceeding or petition
4
<PAGE>
remains unstayed or undismissed for a period of sixty (60) consecutive days; (f)
there shall occur Event of Default (as defined in the Participation Agreement);
(g) any default shall occur in the payment of amounts due hereunder; or (h) any
other default shall occur hereunder which remains uncured or unwaived for a
period of thirty (30) days after receipt of written notice thereof from the
Agent or the Lessor thereof (each of the foregoing an "Event of Default"
hereunder); then notwithstanding any collateral that the Agent or any Lender may
possess from the Borrower or any Guarantor or any other guarantor of the
Borrower's Liabilities, or any other party, at the Agent's election and without
notice thereof or demand therefor, so long as such Event of Default shall be
continuing, the Guarantor's Obligations shall immediately become due and
payable.
7. SUITS. Each Guarantor shall from time to time on or after the
Completion Date pay to the Agent (on behalf of the Series A Lenders), on demand,
at the Agent's place of business set forth in the Credit Agreement, the
Guarantor's Obligations as they become or are declared due, and in the event
such payment is not made forthwith, the Agent may proceed to suit against any
Guarantor or all the Guarantors. At the Agent's election, one or more and
successive or concurrent suits may be brought hereon by the Agent against the
Guarantors, whether or not suit has been commenced against the Borrower, any
other guarantor of the Borrower's Liabilities, or any other Person and whether
or not the Agent has taken or failed to take any other action to collect all or
any portion of the Borrower's Liabilities.
8. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Agent or any Series A Lender as a defense, counterclaim, set-off or
cross claim, any defense (legal or equitable) or other claim which such
Guarantor may now or at any time hereafter have against the Lessee, the
Borrower, the Agent, any Lender, or any Holder, without waiving any additional
defenses, set-offs, counterclaims or other claims otherwise available to such
Guarantor. If at any time hereafter the Agent or any Series A Lender employs
counsel for advice or other representation to enforce the Guarantor's
Obligations that arise out of an Event of Default, then, in any of the foregoing
events, all of the attorneys' fees arising from such services and all expenses,
costs and charges in any way or respect arising in connection therewith or
relating thereto shall be obligations of the Guarantors and shall be paid by the
Guarantors to the Agent (or such Series A Lender), on demand.
9. WAIVER; SUBROGATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Agent's (or any Lender's) acceptance of this Guaranty
Agreement; (ii) any Series A Lender's heretofore, now or from time to time
hereafter, making any advances to the Borrower whether pursuant to the Credit
Agreement or any Series A Note, or any amendments, modifications, restatements
or supplements thereto, or replacements or extensions thereof; (iii) the
Borrower, the Agent or any Lender heretofore, now or at any time hereafter,
obtaining, amending, substituting for, releasing, waiving or modifying the
Credit Agreement, any Series A Note or any other Operative Agreements; (iv)
presentment, demand, notices of default, non-payment, partial payment and
protest; (v) the Agent (or any Lender) heretofore, now or at any time hereafter,
granting to the Borrower (or any other party liable to the Lessor on account of
the Borrower's Liabilities) any indulgence or extensions of time of payment of
the Borrower's Liabilities; and (vi) the Borrower heretofore, now
5
<PAGE>
or at any time hereafter, accepting from the Agent (or any Lender) or any other
person, any partial payment or payments on account of the Borrower's Liabilities
or any collateral securing the payment thereof or the Agent (or any Lender)
settling, subordinating, compromising, discharging or releasing the same. Each
Guarantor agrees that on or after the Completion Date the Agent (or any Lender)
may at any time thereafter do any or all of the foregoing in such manner, upon
such terms and at such times as the Agent (or any Lender), in its sole and
absolute discretion, deems advisable, without in any way or respect impairing,
affecting, reducing or releasing any Guarantor from the Guarantor's Obligations,
and each Guarantor hereby consents to each and all of the foregoing events or
occurrences.
(b) Each Guarantor hereby agrees that payment or performance by such
Guarantor of the Guarantor's Obligations under this Guaranty Agreement may be
enforced by the Agent upon demand by the Agent to such Guarantor without the
Agent being required, each Guarantor expressly waiving any right it may have to
require the Agent, to (i) prosecute collection or seek to enforce or resort to
any remedies against the Lessee, the Borrower or the other Guarantors or any
other guarantor of the Lessee's Liabilities, IT BEING EXPRESSLY UNDERSTOOD,
ACKNOWLEDGED AND AGREED TO BY EACH GUARANTOR THAT DEMAND UNDER THIS GUARANTY
AGREEMENT MAY BE MADE BY THE AGENT, AND THE PROVISIONS HEREOF ENFORCED BY THE
AGENT, EFFECTIVE AS OF THE FIRST DATE ON OR AFTER THE COMPLETION DATE ANY EVENT
OF DEFAULT OCCURS AND IS CONTINUING, or (ii) seek to enforce or resort to any
remedies with respect to any security interests, Liens or encumbrances granted
to the Agent by the Borrower or any other Person on account of the Lessee's
Liabilities or any guaranty thereof. The Agent shall not have any obligation to
protect, secure or insure any of the foregoing security interests, Liens or
encumbrances on the properties or interests in properties subject thereto. The
Guarantor's Obligations shall in no way be impaired, affected, reduced, or
released by reason of the Agent's failure or delay to do or take any of the
acts, actions or things described in this Guaranty Agreement including, without
limiting the generality of the foregoing, those acts, actions and things
described in this SECTION 10.
(c) Each Guarantor further agrees with respect to this Guaranty
Agreement that, until the Borrower's Liabilities have been paid in full and the
Lenders and the Holders have no further obligation to make any Loan or Holder
Advance, no Guarantor shall have any right of subrogation, reimbursement or
indemnity, nor any right of recourse to security for the Borrower's Liabilities.
This waiver is expressly intended to prevent the existence of any claim in
respect to such reimbursement by any Guarantor against the estate of Borrower
within the meaning of Section 101 of the Bankruptcy Code, and to prevent each
Guarantor from constituting a creditor of Borrower in respect of such
reimbursement within the meaning of Section 547(b) of the Bankruptcy Code in the
event of a subsequent case involving the Lessee.
(d) Any claim or claims that the Agent may at any time hereafter have
against any Guarantor under this Guaranty Agreement may be asserted by the Agent
by written notice directed to such Guarantor.
10. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the Completion Date and shall continue in full force and effect
until the Borrower's Liabilities are fully
6
<PAGE>
paid and the Credit Agreement, each Series A Note and the Participation
Agreement have terminated in accordance with their respective terms. The Agent
shall give the Guarantors written notice of such termination at the address set
forth in Section 17 below. This Guaranty Agreement shall be binding upon each
Guarantor and its successors and assigns and shall inure to the benefit of the
Agent, each Series A Lender, and their respective successors and assigns.
Notwithstanding the foregoing, no Guarantor may, without the prior written
consent of the Agent, assign any rights, powers, duties or obligations
hereunder.
11. REPRESENTATIONS AND WARRANTIES. Each Guarantor warrants and
represents to the Agent and each Series A Lender that such Guarantor is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against such
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that such Guarantor's execution, delivery and performance of
this Guaranty Agreement do not violate or constitute a breach of its certificate
of incorporation or other documents of corporate governance or any agreement to
which such Guarantor is a party, or any applicable laws, in each case, which
violation or breach could reasonably be expected to have a material adverse
effect on the business, operations or condition (financial or otherwise) of such
Guarantor.
12. INCORPORATION OF COVENANTS. Reference is made to Article XXVIII of
the Lease, and the "Incorporated Covenants" (as defined therein). Each Guarantor
agrees with the Lessor that, effective as of the date hereof (whether or not the
Basic Term has commenced with respect to any Property), the Incorporated
Covenants (and all other relevant provisions of the Existing Aviation Sales
Credit Agreement related thereto) are hereby incorporated by reference into this
Guaranty Agreement to the same extent and with the same effect as if set forth
fully herein and shall inure to the benefit of the Lessor, without giving effect
to any waiver, amendment, modification or replacement of the Existing Aviation
Sales Credit Agreement or any term or provision of the Incorporated Covenants
occurring subsequent to the date of this Guaranty, except to the extent any such
waiver or modification (or any covenants contained in any New Facility) are
approved as Incorporated Covenants pursuant to Section 28.1(a) of the Lease.
Without limiting the generality of the foregoing, from and after the date hereof
(whether or not the Basic Term has commenced with respect to any Property), to
the extent that the Incorporated Covenants require Aviation Sales or any of its
Subsidiaries to deliver any financial statement, certificate, notice, report, or
other document or information to the Existing Credit Agent (or any other agent
under the applicable credit facility), each Guarantor shall simultaneously
deliver a copy of such financial statement, certificate, notice, report,
document or information to the Agent, each Lender and (upon Lessor's request)
the Lessor.
13. EXPENSES. Each Guarantor agrees to be liable for the payment of all
fees and expenses, including attorney's fees, incurred by the Agent or any
Series A Lender in connection with the enforcement of this Guaranty Agreement.
14. REINSTATEMENT. Each Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any time
payment received by the Lessor under
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<PAGE>
the Credit Agreement, any Series A Note any other Operative Agreement or this
Guaranty Agreement is rescinded or must be restored for any reason.
15. COUNTERPARTS. This Guaranty Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall constitute one and
the same instrument.
16. RELIANCE. Each Guarantor represents and warrants to the Agent and
each Series A Lender that: (a) such Guarantor has adequate means to obtain from
Borrower, on a continuing basis, information concerning Lessee or Borrower and
Lessee's or Borrower's financial condition and affairs and has full and complete
access to Lessee's or Borrower's books and records; (b) such Guarantor is not
relying on the Agent, any Lender, or any of their respective employees, agents
or other representatives, to provide such information, now or in the future; (c)
such Guarantor is executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) such Guarantor has relied solely on its own independent
investigation, appraisal and analysis of Lessee and Borrower and Lessee's and
Borrower's financial condition and affairs in deciding to provide this Guaranty
and is fully aware of the same; and (e) such Guarantor has not depended or
relied on the Agent, any Lender, or any of their respective employees, agents or
representatives, for any information whatsoever concerning Lessee or Borrower or
Lessee's or Borrower's financial condition and affairs or other matters material
to such Guarantor's decision to provide this Guaranty or for any counseling,
guidance, or special consideration or any promise therefor with respect to such
decision. Each Guarantor agrees that neither the Agent nor any Lender has any
duty or responsibility whatsoever, now or in the future, to provide to such
Guarantor any information concerning Lessee or the Borrower or Lessee's or the
Borrower's financial condition and affairs, other than as expressly provided
herein, and that, if such Guarantor receives any such information from the
Agent, any Lender, or any of their respective employees, agents or other
representatives, such Guarantor will independently verify the information and
will not rely on the Agent, any Lender, or any of their respective employees,
agents or other representatives, with respect to such information.
17. TERMINATION. This Guaranty Agreement and all obligations of the
Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the date when all of the Borrower's
Liabilities have been fully paid and the Credit Agreement, each Series A Note
and the Participation Agreement have terminated in accordance with their
respective terms.
18. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telecopy, telegram or telex (where
the receipt of such message is verified by return) expressly provided for
hereunder, when received at such telephone, telecopy or telex number as may from
time to time be specified in written or verbal notice to the other parties
hereto or otherwise received), or if sent prepaid by certified or registered
mail return receipt requested on the third Business Day after the day on which
mailed, addressed to such party at said address:
8
<PAGE>
(a) if to any Guarantor:
c\of Aviation Sales Corporation
6905 N.W. 25th Street
Miami, Florida 33122
Attention:________________________________
Telephone No.:____________________________
Telecopy No.:_____________________________
(b) if to the Administrative Agent:
(i) if by certified or registered mail:
NationsBank, National Association
P.O. Box 407090
Fort Lauderdale, Florida 33340-7090
Attention: Andrew Hahn
Telephone: (954) 765-2612
Telefacsimile No.: (954) 765-2026
(ii) if by hand-delivery, courier service
or telecopy:
NationsBank, National Association
One Financial Plaza
10th Floor
Fort Lauderdale, Florida 33394
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telefacsimile No.: (954) 765-2026
19. GOVERNING LAW; WAIVERS OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA,
WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS.
(b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
20. SUBMISSION TO JURISDICTION; WAIVERS. Each of the parties hereto
irrevocably and unconditionally:
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<PAGE>
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Operative
Agreements to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of Florida and the courts of
the United States of America, in each case sitting in Broward County,
Florida, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same,
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail) postage
prepaid, to the respective party at its address set forth in SECTION 18
hereof or at such other address of which the Administrative Agent shall
have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 20 any special, exemplary, punitive or
consequential damages.
[SIGNATURE PAGE FOLLOWS.]
10
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first written above.
ADMINISTRATIVE AGENT:
NATIONSBANK, NATIONAL ASSOCIATION, as
Administrative Agent for the Series A Lenders
By:______________________________________
Name:____________________________________
Title:___________________________________
SIGNATURE PAGE 1
<PAGE>
GUARANTORS:
AVIATION SALES FINANCE COMPANY
WITNESS:
____________________ By:______________________________________________
Name: Joseph E. Civiletto
Title: President of the foregoing Guarantor
____________________
AVIATION SALES COMPANY
AVIATION SALES MANUFACTURING COMPANY
AVS/KRATZ-WILDE MACHINE COMPANY
APEX MANUFACTURING, INC.
AEROCELL STRUCTURES, INC.
AVIATION SALES DISTRIBUTION
SERVICES COMPANY
AVIATION SALES BEARINGS COMPANY
AVIATION SALES LEASING COMPANY
WHITEHALL CORPORATION
TRIAD INTERNATIONAL MAINTENANCE
CORPORATION
AVIATION SALES MAINTENANCE, REPAIR &
OVERHAUL COMPANY
CARIBE AVIATION, INC.
AIRCRAFT INTERIOR DESIGN, INC.
AERO HUSHKIT CORPORATION
AERO CORPORATION
AERO CORP MACON, INC.
HYDROSCIENCE, INC.
WITNESS:
____________________ By:______________________________________________
Name: Joseph E. Civiletto
Title: Vice President of each
____________________ of the foregoing Guarantors
SIGNATURE PAGE 2
EXHIBIT 10.4
GUARANTY AGREEMENT
(Lessee Obligations)
between
THE SUBSIDIARIES OF AVIATION SALES COMPANY
PARTY HERETO
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as
expressly stated herein,
but solely as Owner Trustee
for the Aviation Sales Trust 1998-1,
Dated as of December 17, 1998
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GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty Agreement" or the "Guaranty"),
dated as of December 17, 1998, is made by THE GUARANTORS SIGNATORY HERETO (the
"Guarantors"), to FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Owner Trustee
under the Aviation Sales Trust 1998-1, as Lessor under the Lease (defined below)
(the "Lessor").
W I T N E S S E T H:
WHEREAS, the Lessor and Aviation Sales Company, a Delaware corporation
("Aviation Sales" or the "Lessee") have entered into that certain Lease
Agreement dated as of the date hereof (as from time to time amended, modified or
supplemented, the "Lease"), pursuant to which the Lessor has leased or will
lease certain Properties to the Lessee, subject to the terms and conditions of
the Lease; and
WHEREAS, the Guarantors are direct or indirect subsidiaries of the
Lessee and will derive direct and indirect benefits from the Lessee entering
into the Lease; and
WHEREAS, it is a condition to the Lessor entering into the Lease that
the Guarantors execute and deliver this Guaranty, and that the Guarantors
guaranty the obligations of the Lessee as hereinafter set forth;
NOW, THEREFORE, as required under the Lease and in order to induce the
Lessor to lease the Properties to the Lessee thereunder, the Guarantors agree as
follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Lease or (if not defined
in the Lease) in the Participation Agreement dated as of the date hereof among
Aviation Sales, as Construction Agent, the Lessee, the Lessor, the Holders party
thereto, the Lenders party thereto, and NationsBank, National Association, as
Administrative Agent (such agreement, as from time to time amended, modified or
supplemented, being referred to as the "Participation Agreement").
2. GUARANTY. Each Guarantor hereby unconditionally, absolutely,
continually and irrevocably guarantees to the Lessor the payment and performance
in full of the Lessee's Liabilities (as defined below). For all purposes of this
Guaranty Agreement, "Lessee's Liabilities" means: (a) the Lessee's prompt
payment in full, when due or declared due and at all such times, of all Rent and
all other amounts pursuant to the terms of the Lease, the Lease Supplements, the
Participation Agreement, the Agency Agreement, and all other Operative
Agreements executed in connection with the Lease or the Agency Agreement
heretofore, now or at any time or times hereafter owing, arising, due or payable
from the Lessee to the Lessor, including without limitation any payment or
amount owed by the Lessee in its capacity as Lessee or as Construction Agent,
and including without limitation Basic Rent, Supplemental Rent, any purchase
price, Deficiency Balance or Maximum Residual Guaranty Amount with respect to
any Property, and any fees or expenses (including, but not limited to,
attorneys' fees and expenses); and (b) the Lessee's prompt, full and faithful
performance,
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observance and discharge of each and every agreement, undertaking, covenant and
provision to be performed, observed or discharged by the Lessee under the Lease,
the Lease Supplements, the Participation Agreement, the Agency Agreement and all
other Operative Agreements executed in connection with the Lease or the Agency
Agreement, including without limitation any obligation of the Lessee in its
capacity as Lessee or as Construction Agent. Each Guarantor's obligations to the
Lessor under this Guaranty Agreement are hereinafter collectively referred to as
the "Guarantor's Obligations."
Each Guarantor agrees that it is directly and primarily liable for the
Lessee's Liabilities.
3. PAYMENT. If the Lessee shall default in payment or performance of
any Lessee's Liabilities, when and as the same shall become due (and such is not
cured within the applicable grace period, if any), whether according to the
terms of the Lease, any Lease Supplement, the Participation Agreement, the
Agency Agreement or any other Operative Agreement, by acceleration, or
otherwise, or upon the occurrence of any other Event of Default that has not
been cured or waived, then each Guarantor, upon demand thereof by the Lessor or
its successors or assigns, will AS OF THE DATE OF THE LESSOR'S DEMAND fully pay
to the Lessor an amount equal to all of the Guarantors' Obligations then due and
owing.
4. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and not of
collection. The Guarantors' Obligations under this Guaranty Agreement shall be
absolute and unconditional irrespective of the validity, legality or
enforceability of the Lease, any Lease Supplement, the Participation Agreement,
the Agency Agreement or any other Operative Agreement, or any other guaranty of
the Lessee's Liabilities, and shall not be affected by any action taken under
the Lease, any Lease Supplement, the Participation Agreement, or any other
Operative Agreement, any other guaranty of the Lessee's Liabilities, or any
other agreement between the Lessor and the Lessee or any other person, in the
exercise of any right or power therein conferred, or by any failure or omission
to enforce any right conferred thereby, or by any waiver of any covenant or
condition therein provided, or by any acceleration of the maturity of any of the
Lessee's Liabilities, or by the release or other disposal of any security for
any of the Lessee's Liabilities, or by the dissolution of the Lessee or the
combination or consolidation of the Lessee into or with another entity or any
transfer or disposition of any assets of the Lessee or by any extension or
renewal of the Lease, any Lease Supplement, the Participation Agreement, the
Agency Agreement or any other Operative Agreement, in whole or in part, or by
any modification, alteration, amendment or addition of or to the Lease, any
Lease Supplement, the Participation Agreement or any other Operative Agreement,
any other guaranty of the Lessee's Liabilities, or any other agreement between
the Lessor and the Lessee or any other Person, or by any defense to or avoidance
or rejection (by a bankruptcy trustee or otherwise) of the Lease, any Lease
Supplement, the Participation Agreement, the Agency Agreement or any other
Operative Agreement in any bankruptcy or similar proceeding, or by any other
circumstance whatsoever (with or without notice to or knowledge of any
Guarantor) which may or might in any manner or to any extent vary the risks of
any Guarantor, or might otherwise constitute a legal or equitable discharge of a
surety or guarantor; it being the purpose and intent of the parties hereto that
this Guaranty Agreement and the Lessee's Obligations hereunder shall be absolute
and unconditional under any and all circumstances and shall not be discharged
except by payment as herein provided. Without limiting the generality of the
foregoing, each Guarantor acknowledges and agrees that (a)
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its Guarantor's Obligations are absolute and separate from the Lessee's
obligations under the Lease, any Lease Supplement, the Participation Agreement,
or any other Operative Agreement, (b) the Guarantors' Obligations hereunder
shall not be reduced, limited or otherwise affected if the Lease, any Lease
Supplement, the Participation Agreement, the Agency Agreement or any other
Operative Agreement is avoided, rejected or limited as an executory contract in
a bankruptcy or similar proceeding, and (c) for the purpose of defining the
Guarantors' Obligations, hereunder, the amount of the Lessee's Liabilities shall
include without limitation all Rent or any other amount which is due or may
become due under the Lease, any Lease Supplement or any other Operative
Agreement, including without limitation any Basic Rent, Supplemental Rent or
other amount that would have been payable at any time but for the avoidance,
rejection or limitation of the Lease, any Lease Supplement or other Operative
Agreement in a bankruptcy or similar proceeding.
5. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby guarantees that
the Guarantors' Obligations will be paid in lawful currency of the United States
of America and in immediately available funds, regardless of any law, regulation
or decree now or hereafter in effect that might in any manner affect the
Lessee's Liabilities, or the rights of the Lessor with respect thereto as
against the Lessee, or cause or permit to be invoked any alteration in the time,
amount or manner of payment by the Lessee of any or all of the Lessee's
Liabilities.
6. EVENTS OF DEFAULT. In the event that (a) any Guarantor shall file a
petition to take advantage of any insolvency statute; (b) any Guarantor shall
commence or suffer to exist a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or substantially
all of its property; (c) any Guarantor shall file a petition or answer seeking
reorganization or arrangement or similar relief under the Federal bankruptcy
laws or any other applicable law or statute of the United States of America or
any state or similar law of any other country; (d) a court of competent
jurisdiction shall enter an order, judgment or decree appointing a custodian,
receiver, trustee, liquidator or conservator of any Guarantor or of the whole or
substantially all of its properties, or approve a petition filed against any
Guarantor seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country, or if, under
the provisions of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of any Guarantor or of
the whole or substantially all of its properties and such order, judgment,
decree, approval or assumption remains unstayed or undismissed for a period of
sixty (60) consecutive days; (e) there is commenced against any Guarantor any
proceeding or petition seeking reorganization, arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which proceeding or petition remains
unstayed or undismissed for a period of sixty (60) consecutive days; (f) there
shall occur Event of Default (as defined in the Participation Agreement); (g)
any default shall occur in the payment of amounts due hereunder; or (h) any
other default shall occur hereunder which remains uncured or unwaived for a
period of thirty (30) days after receipt of written notice thereof from the
Agent or Lessor (each of the foregoing an "Event of Default" hereunder); then
notwithstanding any collateral that the Lessor may possess from Lessee or any
Guarantor or any other guarantor of the Lessee's Liabilities, or any other
party, at the Lessor's election and without notice thereof or demand therefor,
so long as such Event of Default shall be continuing, the Guarantors'
Obligations shall immediately become due and payable.
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7. SUITS. The Guarantors shall pay to the Lessor, on demand, at the
Lessor's place of business set forth in the Lease, the Guarantors' Obligations
as they become or are declared due, and in the event such payment is not made
forthwith, the Lessor may proceed to suit against any Guarantor. At the Lessor's
election, one or more and successive or concurrent suits may be brought hereon
by the Lessor against any Guarantor, whether or not suit has been commenced
against the Lessee, any other Guarantor, any other guarantor of the Lessee's
Liabilities, or any other Person and whether or not the Lessor has taken or
failed to take any other action to collect all or any portion of the Lessee's
Liabilities.
8. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Lessor as a defense, counterclaim, set-off or cross claim, any
defense (legal or equitable) or other claim which such Guarantor may now or at
any time hereafter have against the Lessee or the Lessor, without waiving any
additional defenses, set-offs, counterclaims or other claims otherwise available
to such Guarantor. If at any time hereafter the Lessor employs counsel for
advice or other representation to enforce the Guarantors' Obligations that
arise out of an Event of Default, then, in any of the foregoing events, all of
the attorneys' fees arising from such services and all expenses, costs and
charges in any way or respect arising in connection therewith or relating
thereto shall be obligations of the Guarantors and shall be paid by the
Guarantors to the Lessor, on demand.
9. WAIVER; SUBROGATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Lessor's acceptance of this Guaranty Agreement; (ii) the
Lessor's heretofore, now or from time to time hereafter making any advances to
the Construction Agent or leasing any Property to the Lessee, whether pursuant
to the Lease or any amendments, modifications, restatements or supplements
thereto, or replacements or extensions thereof; (iii) the Lessor or the Lessee
heretofore, now or at any time hereafter, obtaining, amending, substituting for,
releasing, waiving or modifying the Lease, the Agency Agreement or any other
Operative Agreements; (iv) presentment, demand, notices of default, non-payment,
partial payment and protest; (v) the Lessor heretofore, now or at any time
hereafter granting to the Lessee (or any other party liable to the Lessor on
account of the Lessee's Liabilities) any indulgence or extensions of time of
payment of the Lessee's Liabilities; and (vi) the Lessor heretofore, now or at
any time hereafter accepting from the Lessee or any other person, any partial
payment or payments on account of the Lessee's Liabilities or any collateral
securing the payment thereof or the Lessor settling, subordinating,
compromising, discharging or releasing the same. Each Guarantor agrees that the
Lessor may heretofore, now or at any time hereafter do any or all of the
foregoing in such manner, upon such terms and at such times as the Lessor, in
its sole and absolute discretion, deems advisable, without in any way or respect
impairing, affecting, reducing or releasing any Guarantor from the Guarantors'
Obligations, and each Guarantor hereby consents to each and all of the foregoing
events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by such
Guarantor of the Guarantors' Obligations under this Guaranty Agreement may be
enforced by the Lessor upon demand by the Lessor to such Guarantor without the
Lessor being required, each Guarantor expressly waiving any right it may have to
require the Lessor, to (i) prosecute collection or seek to enforce or resort to
any remedies against the Lessee, any other Guarantor, or any other guarantor of
the Lessee's
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Liabilities, IT BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY EACH
GUARANTOR THAT DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE MADE BY THE LESSOR,
AND THE PROVISIONS HEREOF ENFORCED BY THE LESSOR, EFFECTIVE AS OF THE FIRST DATE
ANY EVENT OF DEFAULT OCCURS AND IS CONTINUING, or (ii) seek to enforce or resort
to any remedies with respect to any security interests, Liens or encumbrances
granted to the Lessor by the Lessee or any other Person on account of the
Lessee's Liabilities or any guaranty thereof. The Lessor shall not have any
obligation to protect, secure or insure any of the foregoing security interests,
Liens or encumbrances on the properties or interests in properties subject
thereto. The Guarantors' Obligations shall in no way be impaired, affected,
reduced, or released by reason of the Lessor's failure or delay to do or take
any of the acts, actions or things described in this Guaranty Agreement
including, without limiting the generality of the foregoing, those acts, actions
and things described in this SECTION 10.
(c) Each Guarantor further agrees with respect to this Guaranty
Agreement that, until the Lessee's Liabilities have been paid in full and the
Lenders and the Holders have no further obligation to make any Loan or Holder
Advance, such Guarantor shall have no right of subrogation, reimbursement or
indemnity, nor any right of recourse to security for the Lessee's Liabilities.
This waiver is expressly intended to prevent the existence of any claim in
respect to such reimbursement by any Guarantor against the estate of Lessee
within the meaning of Section 101 of the Bankruptcy Code, and to prevent any
Guarantor from constituting a creditor of Lessee in respect of such
reimbursement within the meaning of Section 547(b) of the Bankruptcy Code in the
event of a subsequent case involving the Lessee.
(d) Any claim or claims that the Lessor may at any time hereafter have
against any Guarantor under this Guaranty Agreement may be asserted by the
Lessor by written notice directed to such Guarantor.
10. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the date of the Initial Closing Date and shall continue in full
force and effect until the Lessee's Liabilities are fully paid and the Lease,
the Agency Agreement and the Participation Agreement have terminated in
accordance with their respective terms. The Lessor shall give each Guarantor
written notice of such termination in case of the Lessee at the Lessee's address
set forth in Section 17 below. This Guaranty Agreement shall be binding upon and
inure to the benefit of each Guarantor and the Lessor and their respective
successors and assigns. Notwithstanding the foregoing, no Guarantor may, without
the prior written consent of the Lessor, assign any rights, powers, duties or
obligations hereunder. Each Guarantor acknowledges and agrees that the rights
and powers of the Lessor under this Guaranty have been collaterally assigned to
the Agent pursuant to the terms of the Security Agreement and the other
Operative Agreements.
11. REPRESENTATIONS AND WARRANTIES. Each Guarantor warrants and
represents to the Lessor that it is duly authorized to execute, deliver and
perform this Guaranty Agreement, that this Guaranty Agreement is legal, valid,
binding and enforceable against such Guarantor in accordance with its terms
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles; and that such
Guarantor's execution, delivery and performance of this Guaranty
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Agreement do not violate or constitute a breach of its certificate of
incorporation or other documents of corporate governance or any agreement to
which such Guarantor is a party, or any applicable laws, in each case, which
violation or breach could reasonably be expected to have a material adverse
effect on the business, operations or condition (financial or otherwise) of such
Guarantor.
12. EXPENSES. Each Guarantor agrees to be liable for the payment of all
fees and expenses, including attorney's fees, incurred by the Lessor in
connection with the enforcement of this Guaranty Agreement.
13. REINSTATEMENT. Each Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any time
payment received by the Lessor under the Lease, the Agency Agreement, any other
Operative Agreement or this Guaranty Agreement is rescinded or must be restored
for any reason.
14. COUNTERPARTS. This Guaranty Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall constitute one and
the same instrument.
15. RELIANCE. Each Guarantor represents and warrants to the Lessor
that: (a) such Guarantor has adequate means to obtain from Lessee, on a
continuing basis, information concerning Lessee and Lessee's financial condition
and affairs and has full and complete access to Lessee's books and records; (b)
such Guarantor is not relying on the Lessor, the Agent, any Lender, or any of
their respective employees, agents or other representatives, to provide such
information, now or in the future; (c) such Guarantor is executing this Guaranty
Agreement freely and deliberately, and understands the obligations and financial
risk undertaken by providing this Guaranty; (d) such Guarantor has relied solely
on its own independent investigation, appraisal and analysis of Lessee and
Lessee's financial condition and affairs in deciding to provide this Guaranty
and is fully aware of the same; and (e) such Guarantor has not depended or
relied on the Lessor, the Agent, any Lender, or any of their respective
employees, agents or representatives, for any information whatsoever concerning
Lessee or Lessee's financial condition and affairs or other matters material to
such Guarantor's decision to provide this Guaranty or for any counseling,
guidance, or special consideration or any promise therefor with respect to such
decision. Each Guarantor agrees that neither the Lessor nor the Agent or any
Lender has any duty or responsibility whatsoever, now or in the future, to
provide to such Guarantor any information concerning Lessee or Lessee's
financial condition and affairs, other than as expressly provided herein, and
that, if such Guarantor receives any such information from the Lessor, the
Agent, any Lender, or any of their respective employees, agents or other
representatives, such Guarantor will independently verify the information and
will not rely on the Lessor, the Agent, any Lender, or any of their respective
employees, agents or other representatives, with respect to such information.
16. TERMINATION. This Guaranty Agreement and all obligations of the
Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the date when all of the Lessee's
Liabilities have been fully paid and the Lease, the Agency Agreement and the
Participation Agreement have terminated in accordance with their respective
terms.
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17. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telecopy, telegram or telex (where
the receipt of such message is verified by return) expressly provided for
hereunder, when received at such telephone, telecopy or telex number as may from
time to time be specified in written or verbal notice to the other parties
hereto or otherwise received), or if sent prepaid by certified or registered
mail return receipt requested on the third Business Day after the day on which
mailed, addressed to such party at said address:
(a) if to the Guarantors:
c/o Aviation Sales Corporation
6905 N.W. 25th Street
Miami, Florida 33122
Attention:________________________________________
Telephone No.:____________________________________
Telecopy No.: ____________________________________
(b) if to the Lessor:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention:________________________________________
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with a copy to the Agent:
(i) if by certified or registered mail:
NationsBank, National Association
P.O. Box 407090
Fort Lauderdale, Florida 33340-7090
Attention: Andrew Hahn
Telephone: (954) 765-2612
Telefacsimile No.: (954) 765-2026
(ii) if by hand-delivery, courier service
or telecopy:
NationsBank, National Association
One Financial Plaza
10th Floor
Fort Lauderdale, Florida 33394
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telefacsimile No.: (954) 765-2026
18. GOVERNING LAW; WAIVERS OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA,
WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS.
(b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
19. SUBMISSION TO JURISDICTION; WAIVERS. Each of the parties hereto
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Operative
Agreements to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of Florida and the courts of
the United States of America, in each case sitting in Broward County,
Florida, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or
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proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the
same,
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail) postage
prepaid, to the respective party at its address set forth in SECTION 17
hereof or at such other address of which the Administrative Agent shall
have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 19 any special, exemplary, punitive or
consequential damages.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first written above.
LESSOR:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Owner Trustee under the Aviation Sales
Trust 1998-1
By:_____________________________________
Name:___________________________________
Title:__________________________________
SIGNATURE PAGE 1
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GUARANTORS:
AVIATION SALES FINANCE COMPANY
WITNESS:
________________________ By:___________________________________________
Name: Joseph E. Civiletto
________________________ Title: President of the foregoing Guarantor
AVIATION SALES MANUFACTURING COMPANY
AVS/KRATZ-WILDE MACHINE COMPANY
APEX MANUFACTURING, INC.
AEROCELL STRUCTURES, INC.
AVIATION SALES DISTRIBUTION
SERVICES COMPANY
AVIATION SALES BEARINGS COMPANY
AVIATION SALES LEASING COMPANY
WHITEHALL CORPORATION
TRIAD INTERNATIONAL MAINTENANCE
CORPORATION
AVIATION SALES MAINTENANCE, REPAIR &
OVERHAUL COMPANY
CARIBE AVIATION, INC.
AIRCRAFT INTERIOR DESIGN, INC.
AERO HUSHKIT CORPORATION
AERO CORPORATION
AERO CORP MACON, INC.
HYDROSCIENCE, INC.
WITNESS:
________________________ By:___________________________________________
Name: Joseph E. Civiletto
________________________ Title: Vice President of each
of the foregoing Guarantors
SIGNATURE PAGE 2
EXHIBIT 10.5
PARTICIPATION AGREEMENT
Dated as of December 17, 1998
among
AVIATION SALES COMPANY,
as Construction Agent,
AVIATION SALES COMPANY,
as Lessee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as Owner Trustee
under the Aviation Sales Trust 1998-1,
THE VARIOUS BANKS AND OTHER
LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME,
as the Holders,
THE VARIOUS BANKS AND OTHER
LENDING INSTITUTIONS WHICH
ARE PARTIES HERETO FROM TIME TO TIME,
as the Lenders,
and
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent for the
Lenders
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TABLE OF CONTENTS
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SECTION 1. THE LOANS....................................................................................1
SECTION 2. HOLDER FUNDINGS..............................................................................1
SECTION 3. SUMMARY OF TRANSACTIONS......................................................................2
3.1. Operative Agreements..............................................................2
3.2. Property Purchase.................................................................2
3.3. Construction of Improvements; Lease or Disposition of Properties..................2
3.4. Single Property...................................................................2
SECTION 4. THE CLOSINGS.................................................................................2
4.1. Initial Closing Date..............................................................2
4.2. Initial Closing Date; Property Closing Dates; Construction Fundings...............3
SECTION 5. FUNDINGS; REPORTING REQUIREMENTS ON COMPLETION
DATE; LESSEE DELIVERY OF NOTICES................................................................3
5.1. General...........................................................................3
5.2. Procedures for Funding............................................................3
5.3. Conditions to the Holders' and the Lenders' Obligations to advance
funds on the Initial Closing Date or funds for the Acquisition of
Property..........................................................................5
5.4. Conditions to the Holders' and the Lenders' Obligations to Make
Construction Fundings for the Commencement of Construction of any
Improvements......................................................................9
5.5. Conditions to the Holders' and the Lenders' Obligations to Make
Construction Fundings for the Ongoing Construction on any Property
Prior to the Construction Period Termination Date................................10
5.6. Reporting and Delivery Requirements on Completion Date...........................12
5.7. Construction Agent Delivery of Allocation Notice and Construction
Budget Modifications.............................................................13
5.8. Inspection of Documents; Hold Harmless; Removal of Properties....................13
SECTION 6. CONDITIONS OF THE INITIAL CLOSING...........................................................13
6.1. Conditions to the Lessor's and the Holders' Obligations..........................13
6.2. Conditions to the Lessee's Obligations...........................................15
6.3. Conditions to the Agent's Obligations............................................16
SECTION 7. REPRESENTATIONS AND WARRANTIES ON THE INITIAL
CLOSING DATE...................................................................................17
7.1. Representations and Warranties of the Initial Holders............................17
7.2. Representations and Warranties of the Owner Trustee..............................19
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7.3. Representations and Warranties of the Construction Agent and the
Lessee...........................................................................21
7.4. Representations and Warranties of the Agent......................................26
SECTION 8. REPRESENTATIONS AND WARRANTIES ON FUNDING DATES.............................................27
8.1. Representations and Warranties on Property Closing Dates.........................27
8.2. Representations and Warranties Upon Initial Construction Fundings................28
8.3. Representations and Warranties Upon the Date of Each Construction
Funding that is not an Initial Construction Funding..............................30
SECTION 9. PAYMENT OF CERTAIN EXPENSES.................................................................31
9.1. Transaction Expenses.............................................................31
9.2. Certain Fees and Expenses........................................................32
9.3. Unused Fee and Holder Unused Fee. ...............................................33
SECTION 10. OTHER COVENANTS AND AGREEMENTS.............................................................33
10.1. Cooperation with the Construction Agent or the Lessee............................33
10.2. Covenants of the Owner Trustee and the Holders...................................33
10.3. Lessee Covenants, Consent and Acknowledgment; Construction Agent
Covenants........................................................................36
10.4. Sharing of Certain Payments......................................................38
10.5. Grant of Easements, Voting at Meetings, etc......................................38
SECTION 11. CREDIT AGREEMENT AND TRUST AGREEMENT.......................................................38
11.1. Construction Agent's and Lessee's Credit Agreement Rights........................38
11.2. Construction Agent's and Lessee's Trust Agreement Rights.........................39
SECTION 12. TRANSFER OF INTEREST.......................................................................39
12.1. Restrictions on Transfer.........................................................39
12.2. Effect of Transfer...............................................................40
SECTION 13. INDEMNIFICATION............................................................................40
13.1. General Indemnity................................................................40
13.2. General Tax Indemnity............................................................43
13.3. Environmental Indemnity..........................................................47
13.4. Additional Provisions Regarding Indemnification During Construction
Period of a Property.............................................................47
13.5. Indemnification provided by the Owner Trustee in Favor of the Other
Indemnified Persons..............................................................47
SECTION 14. MISCELLANEOUS..............................................................................48
14.1. Survival of Agreements...........................................................48
14.2. No Broker, etc...................................................................49
</TABLE>
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<TABLE>
<CAPTION>
PAGE
----
<S> <C>
14.3. Notices..........................................................................49
14.4. Counterparts.....................................................................51
14.5. Amendments and Termination.......................................................52
14.6. Headings, etc....................................................................52
14.7. Parties in Interest..............................................................52
14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL.............................................52
14.9. Submission to Jurisdiction; Waivers..............................................52
14.10. Severability.....................................................................53
14.11. Liability Limited................................................................53
14.12. Rights of Lessee.................................................................54
14.13. Further Assurances...............................................................54
14.14. Calculations under Operative Agreements..........................................55
14.15. Confidentiality..................................................................55
14.16. Calculation of Rent, Interest, Holder Yield and Fees.............................56
Schedule 1 Initial Holders ..............................................................SCH-1
Schedule 7.3(s) Wetlands..................................................................SCH-7.3-1
Schedule 7.3(t) Environmental Conditions..................................................SCH-7.3-2
EXHIBIT A REQUISITION FORM................................................................A-1
Schedule 1 Legal Description of Land.......................................................A-4
Schedule 2 Description of Improvements.....................................................A-5
Schedule 3 Description of Equipment........................................................A-6
Schedule 4 Work............................................................................A-7
EXHIBIT B AVIATION SALES COMPANY OFFICER'S CERTIFICATE....................................B-1
Schedule 1 [itemized expenditures].........................................................B-3
EXHIBIT C FORM OF OPINION OF COUNSEL TO LESSEE, CONSTRUCTION
AGENT AND GUARANTORS............................................................C-1
EXHIBIT D AVIATION SALES COMPANY OFFICER'S CERTIFICATE....................................D-1
EXHIBIT E AVIATION SALES COMPANY SECRETARY'S CERTIFICATE..................................E-1
EXHIBIT F FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE...........................................................F-1
EXHIBIT G FIRST SECURITY BANK, NATIONAL ASSOCIATION
CERTIFICATE OF ASSISTANT SECRETARY..............................................G-1
EXHIBIT H FORM OF OPINION OF COUNSEL TO FIRST SECURITY BANK,
NATIONAL ASSOCIATION ...........................................................H-1
EXHIBIT I ADDITIONAL CONDITIONS AND REQUIREMENTS FOR
FUNDINGS........................................................................I-1
Appendix A Rules of Usage and Definitions.........................................Appendix A-1
</TABLE>
iii
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of December 17, 1998 (as
amended, modified, restated or supplemented from time to time, this
"Agreement"), is by and among AVIATION SALES COMPANY, a Delaware corporation
(the "Construction Agent"); AVIATION SALES COMPANY, as Lessee (the "Lessee");
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually (in its individual capacity, the "Trust Company"), except as
expressly stated herein, but solely as Owner Trustee under the Aviation Sales
Trust 1998-1 (the "Owner Trustee" or the "Lessor"); NATIONSBANK, NATIONAL
ASSOCIATION, as Administrative Agent (in such capacity, the "Agent") for the
Lenders; NATIONSBANK, NATIONAL ASSOCIATION, a national banking association and
the various other banks and lending institutions which are parties hereto from
time to time as Holders; NATIONSBANK, NATIONAL ASSOCIATION and the various other
banks and lending institutions which are parties hereto from time to time as
Lenders. Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings set forth in Appendix A hereto.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. THE LOANS.
The Lenders have agreed to make Loans to the Lessor from time to time
in an aggregate principal amount of up to the aggregate amount of the
Commitments of the Lenders in order for the Lessor to acquire the Properties and
certain Improvements and to develop and construct certain Improvements in
accordance with the Agency Agreement and the terms and provisions hereof, and in
consideration of the receipt of the proceeds of such Loans, the Lessor will
issue the Notes (together with any note or notes issued in exchange or
substitution therefor in accordance with the Credit Agreement, the "Notes"). The
Loans shall be made and the Notes shall be issued pursuant to the Credit
Agreement. Pursuant to SECTION 5 of this Agreement and SECTION 2 of the Credit
Agreement, the Loans will be made to the Lessor from time to time upon the
appropriate submission by the Construction Agent of a Requisition therefor, in
accordance with this Agreement and the other Operative Agreements. The Loans and
the obligations of the Lessor under the Credit Agreement shall be secured by the
Collateral. The Lessee and the Construction Agent agree that each Property shall
be improved for business purposes and shall not merely be held as unimproved
Land for speculative purposes.
SECTION 2. HOLDER FUNDINGS.
Subject to the terms and conditions of this Agreement and in reliance
on the representations and warranties of each of the parties hereto contained
herein or made pursuant hereto on each date Fundings are made in accordance with
SECTION 5 hereof, each Holder shall make a Holder Funding on a pro rata basis to
the Owner Trustee with respect to the Aviation Sales Trust 1998-1 based on its
Holder Commitment in an amount in immediately available funds such that the
aggregate of all Holder Fundings shall be three percent (3%) of the amount of
the
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Funding being funded on such date; provided, no Holder shall be obligated for
any Holder Funding in excess of its pro rata share of the Available Holder
Commitment. The aggregate amount of Holder Fundings shall be up to the aggregate
amount of the Holder Commitments. No prepayment or any other payment with
respect to any Funding shall be permitted such that the Holder Funding with
respect to such Funding is less than 3% of the outstanding amount of such
Funding, except in connection with termination or expiration of the Term or in
connection with the exercise of remedies relating to the occurrence of a Lease
Event of Default. The representations, warranties, covenants and agreements of
the Holders herein and in the other Operative Agreements are several, not joint,
and not joint and several.
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. OPERATIVE AGREEMENTS. As of the date hereof (the "Initial Closing
Date"), each of the respective parties hereto and thereto shall execute and
deliver this Agreement, the Lease, the Agency Agreement, the Credit Agreement,
the Notes, the Certificates, the Trust Agreement, the Security Agreement and
such other documents, instruments, certificates and opinions of counsel as
agreed to by the parties hereto.
3.2. PROPERTY PURCHASE. On each Property Closing Date and subject to
the terms and conditions of this Agreement (a) the Holders will each make a
Holder Funding in accordance with SECTIONS 2 AND 5 of this Agreement and the
terms and provisions of the Trust Agreement, (b) the Lenders will make Loans in
accordance with SECTIONS 1 AND 5 of this Agreement and the terms and provisions
of the Credit Agreement, and (c) the Lessor will purchase, or lease pursuant to
a Ground Lease, the applicable Property identified by the Construction Agent,
and grant the Agent a Lien on such Property by execution of the required
Security Documents.
3.3. CONSTRUCTION OF IMPROVEMENTS; LEASE OR DISPOSITION OF PROPERTIES.
Construction Fundings will be made with respect to particular Improvements to be
constructed and with respect to ongoing Work regarding the Equipment and ongoing
construction of particular Improvements, in each case, pursuant to the terms and
conditions of this Agreement and the Agency Agreement. The Construction Agent
will act as a construction agent on behalf of the Lessor respecting such Work
and the construction of such Improvements and the expenditures of the
Construction Fundings related thereto. The Construction Agent shall promptly
notify the Lessor upon Completion of the Improvements with respect to each
Property.
3.4. SINGLE PROPERTY. Notwithstanding the foregoing or any other
provision of this Participation Agreement or any other Operative Agreement,
unless and until the definition of "Property" is amended to permit more than one
Property, there shall be only one Property as described in the definition of
"Property" (and, accordingly, there shall be only one Property Closing Date,
only one Initial Construction Funding and only one Completion Date).
SECTION 4. THE CLOSINGS.
4.1. INITIAL CLOSING DATE. All documents and instruments required to be
delivered on the Initial Closing Date shall be delivered at the offices of Smith
Helms Mulliss & Moore, L.L.P.,
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Charlotte, North Carolina, or at such other location as may be determined by the
Lessor, the Agent and the Lessee.
4.2. INITIAL CLOSING DATE; PROPERTY CLOSING DATES; CONSTRUCTION
FUNDINGS. The Construction Agent shall deliver to the Lessor and the Agent a
requisition (a "Requisition"), in the form attached hereto as EXHIBIT A or in
such other form as is reasonably satisfactory to the Lessor, the Construction
Agent and the Agent (together with such additional schedules, affidavits,
releases, waivers, statements, invoices, bills, and other documents,
certificates and information required by the Agent, and any documents required
by Exhibit I or J), in connection with (a) the Initial Closing Date relating to
the Transaction Expenses and other fees, expenses and disbursements payable by
the Lessor pursuant to SECTION 9.1(A) with invoices (in form and substance
reasonably acceptable to the Agent and the Lessor) for such Transaction Expenses
and other fees, expenses and disbursements attached to such Requisition, (b)
each Property Closing Date relating to each Acquisition Funding pursuant to
SECTION 5.3 and (c) each date of a Construction Funding pursuant to SECTIONS 5.4
OR 5.5.
SECTION 5. FUNDINGS; REPORTING REQUIREMENTS ON COMPLETION
DATE; LESSEE DELIVERY OF NOTICES.
5.1. GENERAL. To the extent funds have been made available to the
Lessor as Loans by the Lenders and Holder Fundings by the Holders, the Lessor
will use such funds from time to time in accordance with the terms and
conditions of this Agreement and the other Operative Agreements (i) to pay
interest regarding the Loans relating to a Property and to pay the Holder Yield
regarding the Holder Fundings relating to a Property, in each case to the extent
accrued under the Credit Agreement or Trust Agreement (as the case may be)
during the period prior to the Basic Rent Commencement Date with respect to such
Property, (ii) at the direction of the Construction Agent to acquire Properties
in accordance with the terms of this Agreement, the Agency Agreement, the Lease
and the other Operative Agreements, (iii) to make advances to the Construction
Agent to permit the testing, engineering, installation, development,
construction, modification, design and renovation, as applicable, of
Improvements in accordance with the terms of the Agency Agreement, the Lease and
the other Operative Agreements, and (iv) to pay Transaction Expenses, fees,
expenses and other disbursements payable by the Lessor under SECTIONS 9.1(A) AND
(B).
5.2. PROCEDURES FOR FUNDING.
(a) The Construction Agent shall designate the date for
Fundings hereunder in accordance with the terms and provisions hereof;
provided, however, it is understood and agreed that no more than one
(1) Funding may be requested during any calendar month other than
Fundings which are made solely to fund interest and Holder Yield. Not
less than five (5) Business Days prior to the date of any requested
Base Rate Funding or Eurodollar Funding, the Construction Agent shall
deliver to the Lessor and the Agent, (A) with respect to the Initial
Closing Date and each Property Closing Date, a Requisition as described
in SECTION 4.2 hereof (including without limitation a legal description
of the Land, a schedule of the Improvements, if any, and a schedule of
the Equipment, if any, to
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be acquired on such date, and a schedule of the Work, if any, to be
performed, each of the foregoing in a form reasonably acceptable to the
Lessor and the Agent) and (B) with respect to each Construction
Funding, a Requisition identifying (among other things) the Property to
which such Work relates. Each such Requisition (other than a
Requisition for an Acquisition Funding) shall be delivered to the
Lessor and the Agent on a date between (and including) the first (1st)
and the fifth (5th) Business Day of a calendar month.
(b) Each Requisition shall: (i) be irrevocable, (ii) request
funds in an amount that is not in excess of the total aggregate of the
Available Commitments plus the Available Holder Commitments at such
time, and (iii) request that the Holders make Holder Fundings and that
the Lenders make Loans to the Lessor for the payment of the Property
Acquisition Costs (in the case of an Acquisition Funding) or other
Property Costs, including the cost of Improvements (in the case of a
Construction Funding) that have previously been incurred and were not
subject to a prior Requisition, in each case as specified in the
Requisition.
(c) Subject to the terms and conditions of the Credit
Agreement and the Trust Agreement and subject to the satisfaction of
the conditions precedent set forth in SECTIONS 5.3, 5.4 or 5.5, as
applicable, on each Property Closing Date or the date on which the
Construction Funding is to be made, as applicable,
(i) the Lenders shall make Loans to the Lessor in an
aggregate amount equal to 97% of the sum of (A) the Requested
Funds specified in any Requisition, (B) any additional amount
of Transaction Expenses and other fees, taxes, expenses and
disbursements (as described in SECTION 9.1(A) AND 9.1(B))
(unless such funding of fees, taxes, expenses, disbursements
or Transaction Expenses is declined in writing by each Lender
and each Holder, such decision to be in the sole discretion of
each Lender and each Holder), and (C) any additional amount
respecting any indemnity payment (as described in SECTION
13.5) (unless such indemnity payment is declined in writing by
each Lender and each Holder, in the sole discretion of each
Lender and each Holder) -- up to an aggregate principal amount
equal to the Available Commitments (such Loans to be
apportioned 88% to Series A Loans and 9% to Series B Loans);
(ii) each Holder shall make a pro rata Holder Funding
based on its Holder Commitment in an amount such that the
aggregate of all Holder Fundings at such time shall be 3% of
the sum of (A) the Requested Funds specified in any
Requisition, (B) any additional amount of Transaction Expenses
and other fees, taxes, expenses and disbursements (as
described in SECTION 9.1(A) AND 9.1(B)) (unless such funding
of fees, taxes, expenses, disbursements or Transaction
Expenses is declined in writing by each Lender and each
Holder, such decision to be in the sole discretion of each
Lender and each Holder), and (C) any additional amount
respecting any indemnity payment (as described in SECTION
13.5) (unless such indemnity payment is declined in writing by
each Lender and each Holder, in the sole discretion of each
Lender and each Holder) -- provided no such Holder
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Funding shall exceed such Holder's pro rata share of the
Available Holder Commitments; and
(iii) the total amount of such Loans and Holder
Fundings made on such date shall (w) be used by the Lessor to
pay the Property Acquisition Costs within three (3) Business
Days of the receipt by the Lessor of such Funding (in the case
of a Property Closing Date), (x) be used by the Lessor on the
date of such Funding to pay interest regarding the Loans
relating to a Property and to pay the Holder Yield regarding
the Holder Fundings relating to a Property, in each case to
the extent accrued under the Credit Agreement or Trust
Agreement (as the case may be) during the period prior to the
Completion Date with respect to such Property, (y) be used by
the Lessor to pay Transaction Expenses, fees, taxes, expenses,
other disbursements and indemnities to the extent permitted
under SECTIONS 5.3, 5.4, 5.5, 9.1(A), 9.1(B) OR 13.5 (as
applicable), or (z) be disbursed by the Lessor, on the date of
such Funding, to the Construction Agent or the Lessee to pay
Property Costs, as applicable. Any such amounts held by the
Lessor (or the Agent on behalf of the Lessor) shall be subject
to the lien of the Security Agreement.
5.3. CONDITIONS TO THE HOLDERS' AND THE LENDERS' OBLIGATIONS TO ADVANCE
FUNDS ON THE INITIAL CLOSING DATE OR FUNDS FOR THE ACQUISITION OF PROPERTY.
(a) The obligations of each Holder to make Holder Fundings,
and of each Lender to make Loans, to the Lessor on the Initial Closing
Date for the purpose of providing funds to the Lessor necessary to pay
Transaction Expenses, fees, expenses and other disbursements payable by
the Lessor under SECTION 9.1 of this Agreement, are subject to the
prior or contemporaneous satisfaction or waiver of the following
conditions precedent:
(i) the correctness in all material respects on
such date of the representations and warranties of the
Owner Trustee, the Construction Agent, the Lessee and the
Holders (other than such Holder) contained herein and in
each of the other Operative Agreements;
(ii) the performance in all material respects by
the Construction Agent and the Lessee of their respective
agreements contained herein and in the other Operative
Agreements which covenants are to be performed by them on
or prior to such date;
(iii) the satisfaction of all conditions to any
such Holder Funding or Loan set forth in any Operative
Agreement;
(iv) the Agent and the Owner Trustee shall have
received a fully executed copy of a counterpart of the
respective Requisition, appropriately completed; and
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(v) no Default or Event of Default under any of
the Operative Agreements shall have occurred after giving
effect to the Funding requested by such Requisition.
(b) The obligations of each Holder to make Holder Fundings,
and of each Lender to make Loans, to the Lessor on a Property Closing
Date for the purpose of providing funds to the Lessor necessary to pay
the Transaction Expenses, fees, expenses and other disbursements
payable by Lessor under SECTION 9.1 (B) of this Agreement and to
acquire a Property, are subject to the prior or contemporaneous
satisfaction or waiver of the following conditions precedent:
(i) the correctness in all material respects on
such Property Closing Date of the representations and
warranties of the Owner Trustee, the Construction Agent, the
Lessee and the Holders (other than such Holder) contained
herein and in each of the other Operative Agreements;
(ii) the performance in all material respects by
the Construction Agent and the Lessee of their respective
agreements contained herein and in the other Operative
Agreements which covenants are to be performed by them on or
prior to each such Property Closing Date;
(iii) the satisfaction of all conditions to any such
Holder Funding or Loan set forth in any Operative Agreement;
(iv) the Agent and the Owner Trustee shall have
received a fully executed copy of a counterpart of the
respective Requisition, appropriately completed;
(v) title to each Property being acquired on such
Property Closing Date shall conform to the representations and
warranties set forth in SECTION 8.1(C) hereof;
(vi) the Construction Agent shall have delivered to
the Lessor a copy of the Deed with respect to the Land and
existing Improvements (if any), a copy of the Ground Lease (if
any) with respect to the Land, and a copy of the Bill of Sale
with respect to the Equipment, in each case for such of the
foregoing as are being acquired on such Property Closing Date;
and such Land and existing Improvements shall be located in an
Approved State;
(vii) there shall not have occurred and be
continuing any Default or Event of Default under any of the
Operative Agreements and no Default or Event of Default under
any of the Operative Agreements shall have occurred after
giving effect to the Funding requested by such Requisition;
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(viii) the Construction Agent shall have delivered to
the Agent and the Owner Trustee, title insurance commitments
to issue policies in favor of the Owner Trustee and the Agent
with respect to each Property being acquired on such Property
Closing Date, such policies being in form and substance
reasonably acceptable to the Owner Trustee and the Agent, with
such title exceptions thereto as are reasonably acceptable to
the Owner Trustee and the Agent; and the Construction Agent
shall deliver to the Owner Trustee and the Agent, as soon as
possible after such Property Closing Date, the final title
insurance policies for each such Property, taking no specific
exception for any Lien filed on account of materials furnished
or labor performed in connection with the Property, and
otherwise showing no additional exceptions to coverage;
(ix) the Construction Agent shall have delivered to
the Agent and the Owner Trustee a "Phase I" environmental site
assessment with respect to each such Property, prepared by an
independent recognized professional reasonably acceptable to
the Agent and the Owner Trustee and in a form and substance
that is reasonably acceptable to the Agent and the Owner
Trustee;
(x) the Construction Agent shall have delivered to
the Agent and the Owner Trustee a survey of each such
Property, prepared by an independent recognized professional
meeting the then current minimum standard detail requirements
for American Land Title Association/American Congress of
Surveying and Mapping (ALTA/ACSM) Land Title Surveys certified
to the Agent and otherwise reasonably acceptable to the Agent;
(xi) the Construction Agent shall have caused to be
delivered to the Agent and the Owner Trustee a legal opinion
(in form and substance reasonably satisfactory to the Agent
and the Owner Trustee) from counsel located in the state where
each such Property is located or, if the Agent and the Owner
Trustee have previously received an opinion from counsel in
such state, the Agent and the Owner Trustee (in their
discretion) may accept an update or a reaffirmation of the
previous opinion, in each case addressed to each Lender;
(xii) the Owner Trustee and the Agent shall be
satisfied, in their sole discretion, that the acquisition or
ground leasing of each such Property and the execution of the
Mortgage Instrument and the other Security Documents will not
adversely affect in any material respect the rights of the
Owner Trustee, the Holders, the Agent or the Lenders under or
with respect to the Operative Agreements in effect as of such
Property Closing Date (it being understood and acknowledged
that the Agent and the Owner Trustee may require that the
Construction Agent deliver an acceptable legal opinion in
connection with this condition);
(xiii) the Construction Agent shall have determined
(as set forth in the related Requisition) that such Property
is appropriate for its business operations;
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and the Agent shall have consented to the Lessor's acquisition
of such Property, which consent (subject to clause (xii)
above) shall not be unreasonably withheld or delayed;
(xiv) the Construction Agent shall have delivered to
the Agent and the Owner Trustee, respecting each such
Property, invoices for the various Transaction Expenses and
other fees, expenses and disbursements referenced in SECTION
9.1 (A) OR (B) of this Agreement;
(xv) the Lessor shall have delivered to the Agent a
Mortgage Instrument and Lender Financing Statements with
respect to each such Property in a form reasonably acceptable
to the Agent and Lessee;
(xvi) the Construction Agent shall have delivered to
the Lessor with respect to each such Property, a Lease
Supplement and a memorandum regarding the Lease and such Lease
Supplement (such memorandum to be substantially in the forms
attached to the Lease as Exhibit B and in each case in form
suitable for recording);
(xvii) the Construction Agent shall have delivered to
the Lessor with respect to each such Property Lessor Financing
Statements executed by the Lessee and the Lessor;
(xviii) if any such Property is subject to a Ground
Lease, the Construction Agent shall have caused a lease
memorandum (in form and substance satisfactory to the Agent)
to be delivered to the Agent for such Ground Lease;
(xix) counsel for the ground lessor of each such
Property subject to a Ground Lease shall have issued to the
Lessor, the Agent and the Holders, an opinion satisfactory to
the Agent;
(xx) all necessary (or in the reasonable opinion of
the Owner Trustee, the Agent, or their respective counsel,
advisable) Governmental Actions, in each case required by any
law or regulation enacted, imposed or adopted on or prior to
each such date or by any change in facts or circumstances on
or prior to each such date, shall have been obtained or made
and be in full force and effect;
(xxi) the Construction Agent shall cause (i) Uniform
Commercial Code lien searches, tax lien searches and judgment
lien searches regarding each of the Lessee and the Lessor to
be conducted (and copies thereof to be delivered to the Agent
and the Owner Trustee) in the state and county (or other
jurisdiction) in which such Property is located, by a
nationally recognized search company acceptable to the Owner
Trustee and the Agent and (ii) the liens referenced in such
lien searches which are objectionable to the Owner Trustee or
the Agent to be
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either removed or otherwise handled in a manner reasonably
satisfactory to the Owner Trustee and the Agent;
(xxii) the Agent shall have received an Appraisal for
such Property showing that such Property has a value at least
equal to ninety-three and one-half percent (93.5%) of the
expected total Property Cost of such Property and all
Improvements constructed or expected to be constructed thereon
(based on a Construction Budget satisfying the requirements of
SECTION 5.4(E)); and
(xxiii) all additional conditions to, and covenants
relating to, such Holder Fundings and Loans, as set forth in
Exhibits I and J attached hereto, shall have been fulfilled to
the satisfaction of the Agent. The terms of Exhibits I and J
are hereby incorporated by reference into this Agreement.
5.4. CONDITIONS TO THE HOLDERS' AND THE LENDERS' OBLIGATIONS TO MAKE
CONSTRUCTION FUNDINGS FOR THE COMMENCEMENT OF CONSTRUCTION OF ANY IMPROVEMENTS.
The obligations of each Holder to make Holder Fundings, and of each Lender to
make Loans, to the Lessor for the purpose of providing funds to the Lessor
necessary to pay the Transaction Expenses, fees, expenses and other
disbursements payable by Lessor under SECTION 9.1(B) of this Agreement, to make
an advance for the commencement of construction of any Improvements on a
Property and acquisition of Equipment, or to pay interest regarding the Loans
relating to a Property and to pay the Holder Yield regarding the Holder Fundings
relating to a Property, in each case regarding such interest and Holder Yield to
the extent accrued and payable under the Credit Agreement or Trust Agreement (as
the case may be), in each case during the period prior to the Completion Date
for such Property, are subject to the satisfaction or waiver of the following
conditions precedent:
(a) the correctness in all material respects on the date of
such Holder Fundings and Loans of the representations and warranties of
the Owner Trustee, the Construction Agent, the Lessee and the Holders
(other than such Holder) contained herein and in each of the other
Operative Agreements;
(b) the performance in all material respects by the
Construction Agent and the Lessee of their respective agreements
contained herein and in the other Operative Agreements and to be
performed by them on or prior to each such date;
(c) the satisfaction of all conditions to any such Holder
Funding or Loan set forth in any Operative Agreement;
(d) the Agent and the Owner Trustee shall have received a copy
of a fully executed counterpart of the respective Requisition
appropriately completed, together with copies of all Bills of Sale with
respect to any Equipment acquired as a part of any Improvements;
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(e) with respect to each Initial Construction Funding, the
Agent and the Owner Trustee shall have received a copy of the
Construction Budget for the completion of the Improvements to which
such Funding relates, which Construction Budget shall indicate a total
Property Cost for such Improvements and the Land on which such
Improvements are to be constructed of not more than 106% of the
appraised value of such Property as set forth in the most recent
Appraisal thereof;
(f) with respect to each Initial Construction Funding, (i) the
title insurance commitments to issue policies (and any policies)
delivered in connection with the requirements of SECTION 5.3(B)(VIII)
shall be endorsed and down-dated (in a manner satisfactory to the
Agent) to provide insurance in an amount at least equal to the maximum
total Property Cost indicated by the Construction Budget referred to in
subparagraph (e) above (and in any event no less than the total actual
Property Cost after giving effect to such Funding), taking no specific
exception for any Lien filed on account of materials furnished or labor
performed in connection with the Property, and otherwise showing no
title change or any additional exceptions to coverage not approved by
the Agent; and (ii) all necessary recording fees, documentary stamp
taxes or similar amounts will be paid in connection with the related
Mortgage Instrument in an amount sufficient to cover such maximum total
Property Cost;
(g) there shall not have occurred and be continuing any
Default or Event of Default or under any of the Operative Agreements,
and no Default or Event of Default under any of the Operative
Agreements will have occurred after giving effect to the Funding
requested by such Requisition;
(h) with respect to each Initial Construction Funding, based
upon Construction Budgets which satisfy the requirements of
subparagraph (e) above, the Available Commitment and the Available
Holder Commitment (after deducting the Unfunded Amount) will be
sufficient to complete the Improvements;
(i) the Construction Agent shall have determined (as set forth
in the related Requisition) that such Improvements are appropriate to
its business; and the Agent shall have consented to such Improvements,
which consent shall not be unreasonably withheld or delayed; and
(j) all additional conditions to, and covenants relating to,
such Holder Fundings and Loans, as set forth in Exhibits I and J
attached hereto, shall have been fulfilled to the satisfaction of the
Agent. The terms of Exhibits I and J are hereby incorporated by
reference into this Agreement.
5.5. CONDITIONS TO THE HOLDERS' AND THE LENDERS' OBLIGATIONS TO MAKE
CONSTRUCTION FUNDINGS FOR THE ONGOING CONSTRUCTION ON ANY PROPERTY PRIOR TO THE
CONSTRUCTION PERIOD TERMINATION DATE. The obligations of each Holder to make
Holder Fundings, and of each Lender to make Loans, to the Lessor (i) in
connection with all subsequent requests for Fundings to pay the Transaction
Expenses, fees, expense and other disbursements payable by Lessor under SECTION
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9.1(B) of this Agreement, (ii) to pay interest regarding the Loans relating to a
Property and to pay the Holder Yield regarding the Holder Fundings relating to a
Property, in each case regarding such interest and Holder Yield to the extent
accrued and payable under the Credit Agreement or Trust Agreement (as the case
may be), during the period prior to the Completion Date with respect to such
Property, and (iii) to pay for the construction of Improvements and acquisition
of Equipment with respect to any Property, in each case prior to the Completion
Date for such Property, are subject to the satisfaction or waiver of the
following conditions precedent:
(a) the correctness in all material respects on the date of
such Holder Fundings and Loans of the representations and warranties of
the Owner Trustee, the Construction Agent, the Lessee and the Holders
(other than such Holder) contained herein and in each of the other
Operative Agreements;
(b) the performance in all material respects by the
Construction Agent and the Lessee hereto of their respective agreements
contained herein and in the other Operative Agreements and to be
performed by them on or prior to each such date;
(c) the satisfaction of all conditions to any such Holder
Funding or Loan set forth in any Operative Agreements;
(d) the Agent and the Owner Trustee shall have received a copy
of a fully executed counterpart of the respective Requisition,
appropriately completed;
(e) there shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Agreements, and
no Default or Event of Default under any of the Operative Agreements
will have occurred after giving effect to the Construction Funding
requested by such Requisition;
(f) (with respect to each Construction Funding) based upon
Construction Budgets which satisfy the requirements of SECTION 5.4(E)
of this Agreement, the Available Commitments and the Available Holder
Commitment (after deducting the Unfunded Amount) will be sufficient to
complete the Improvements;
(g) with respect to each Construction Funding, the title
insurance commitments to issue policies (or any policies) delivered in
connection with the requirements of SECTION 5.3(B)(III)) shall be
endorsed and down-dated (in a manner satisfactory to the Agent) to
provide insurance in an amount at least equal to the maximum total
Property Cost indicated by the Construction Budget referred to in
SECTION 5.4(E) (and in any event no less than the total actual Property
Cost after giving effect to such Funding), taking no specific exception
for any Lien filed on account of materials furnished or labor performed
in connection with the Property, and otherwise showing no title change
or any additional exceptions to coverage not approved by the Agent; and
(h) all additional conditions to, and covenants relating to,
such Holder Fundings and Loans, as set forth in Exhibits I and J
attached hereto, shall have been
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fulfilled to the satisfaction of the Agent. The terms of Exhibits I and
J are hereby incorporated by reference into this Agreement.
5.6. REPORTING AND DELIVERY REQUIREMENTS ON COMPLETION DATE. On the
Completion Date for each Property, the Construction Agent shall deliver to the
Agent, and the Owner Trustee an Officer's Certificate in the form attached
hereto as EXHIBIT B specifying (a) the Completion Date for the construction of
Improvements at the Property, (b) the aggregate Property Cost for the Property
and (c) if any of the Property consists of Tangible Personal Property, a
separate statement of the Property Cost attributable to such Tangible Personal
Property. Such Officer's Certificate shall also include, in form and in detail
reasonably acceptable to the Agent and the Holders, a summary of the Property
Cost figures and a certification to the effect that all Improvements have been
made in accordance with all applicable material Legal Requirements, in a good
and workmanlike manner and otherwise in substantial compliance with the
standards and practices of the Construction Agent with respect to similar
properties and improvements owned by the Construction Agent, and that no consent
or approval of any Person is required for such Improvements except for consents
and approvals which have already been obtained. Furthermore, (i) on the
Completion Date for each Property, the Construction Agent shall deliver or cause
to be delivered originals of the following to the Agent (and copies thereof to
the Owner Trustee) each of which shall be in a form reasonably acceptable to the
Agent: (1) insurance certificates with respect to the Property as required under
the Lease Agreement, and (2) if requested by the Agent or the Owner Trustee,
amendments or modifications to the Lender Financing Statements or the Lessor
Financing Statements executed by the Lessee and the Lessor; and (ii) on or prior
to the Completion Date for each Property (and in no event later than the date of
the last Funding with respect to such Property, as set forth in Exhibit I), the
Construction Agent shall deliver or cause to be delivered originals of the
following to the Agent (and copies thereof to the Owner Trustee) each of which
shall be in a form reasonably acceptable to the Agent: (1) three copies of a
final as-built survey for the applicable Property, (2) an endorsement of the
title insurance policy regarding such Property, amending the effective date of
such policy to the date of such endorsement and taking no exception for any Lien
on account of materials furnished or labor performed in connection with the
Property, and otherwise showing no title changes or any additional exceptions to
coverage that have not been approved by the Agent, and (3) the final Plans and
Specifications for such Property. In addition, on the Completion Date for such
Property the Construction Agent covenants and agrees that the recording fees,
documentary stamp taxes or similar amounts paid or required to be paid in
connection with the related Mortgage Instrument shall be in an amount required
by applicable law. If such Property has been completed in accordance with the
Plans and Specifications (excluding immaterial punch list items) and the total
Property Cost of such Property as of the Completion Date (after giving effect to
any Fundings on such date) is less than the amount of Fundings estimated in the
Construction Budget for such Property (such shortfall not in excess of
$2,000,000 being referred to as the "Funding Shortfall"), then on any date on or
after the Completion Date, at the election of the Lessee, upon notice to the
Agent and the Lessor, (y) the Total Commitment and Total Holder Commitment shall
be permanently reduced (in accordance with the Operative Agreements) by an
aggregate amount (not in excess of $2,000,000) equal to the Funding Shortfall
(such reduction to be applied pro rata among the Commitments and Holder
Commitments), and (z) simultaneously with such
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reduction in Commitments and Holder Commitments, the amount of the Letter of
Credit shall be reduced by an amount equal to the Funding Shortfall.
5.7. CONSTRUCTION AGENT DELIVERY OF ALLOCATION NOTICE AND CONSTRUCTION
BUDGET MODIFICATIONS. The Construction Agent covenants and agrees to deliver (i)
to the Agent at least five (5) Business Days before any Scheduled Interest
Payment Date during the Commitment Period the Allocation Notice referred to in
the first sentence of SECTION 2.3(B) of the Credit Agreement, and (ii) to the
Agent and the Owner Trustee each month any modification to any Construction
Budget regarding any Property; provided, no Construction Budget may be amended
unless (a) the title insurance policies referenced in SECTION 5.3(B)(VIII) are
also modified or endorsed, if necessary, to provide for insurance in an amount
that satisfies the requirements of SECTION 5.4(F)(I) of this Agreement and, if
necessary, any additional recording fees, documentary stamp taxes or similar
amounts paid in connection with the related Mortgage Instrument in an amount
sufficient to comply with the requirements of SECTION 5.4(F)(II), and (b) after
giving effect to any such amendment the Construction Budget remains in
compliance with the requirements of SECTION 5.4(E) of this Agreement. Any
amendment to the Construction Budget is also subject to the requirements of the
Agency Agreement.
5.8. INSPECTION OF DOCUMENTS; HOLD HARMLESS; REMOVAL OF PROPERTIES. Any
document or item (including without limitation any environmental report)
delivered to the Agent shall be available for inspection at any time during
ordinary business hours upon reasonable notice by any Lender or Holder. The
Agent shall not incur any liability to any Lender, any Holder, the Owner Trustee
or any other Person (and each Lender, each Holder, the Owner Trustee, the Lessee
and the Construction Agent hereby holds the Agent harmless from any such
liability) as a result of any such document or item, any information contained
therein, the failure to receive any such document, or the Agent's approval of
any Property. In the event the Majority Lenders determine that any environmental
site assessment reveals an Environmental Violation and they or the Agent so
notify the Lessee, then the Lessee shall remedy or purchase such Property in
accordance with SECTIONS 15.2, 16.1 AND 16.2 of the Lease, provided that if the
Property is a Construction Period Property, the Construction Agent shall be
responsible for such remedy or purchase.
SECTION 6. CONDITIONS OF THE INITIAL CLOSING.
6.1. CONDITIONS TO THE LESSOR'S AND THE HOLDERS' OBLIGATIONS. The
obligations of the Lessor and the Holders to consummate the transactions
contemplated by this Agreement, including the obligation to execute and deliver
the applicable Operative Agreements to which each is a party on the Initial
Closing Date, are subject to (i) the accuracy and correctness on the Initial
Closing Date of the representations and warranties of the other parties hereto
contained herein, (ii) the accuracy and correctness on the Initial Closing Date
of the representations and warranties of the other parties hereto contained in
any other Operative Agreement or certificate delivered pursuant hereto or
thereto, (iii) the performance by the other parties hereto of their respective
agreements contained herein and in the other Operative Agreements and to be
performed by them on or prior to the Initial Closing Date and (iv) the
satisfaction, or waiver by the Lessor and the Holders, of all of the following
conditions on or prior to the Initial Closing Date:
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(a) Each of the Operative Agreements to be entered into as of
the Initial Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, other than the Lessor or such Holder,
and shall be in full force and effect, and no Default or Event of
Default shall exist thereunder (both before and after giving effect to
the transactions contemplated by the Operative Agreements), and the
Lessor shall have received a fully executed copy of each of the
Operative Agreements (other than the Notes of which it shall have
received specimens). The Operative Agreements (or memoranda thereof),
any supplements thereto and any financing statements and fixture
filings in connection therewith required under the Uniform Commercial
Code shall have been filed or shall be promptly filed, if necessary, in
such manner as to enable the Lessee's counsel to render its opinion
referred to in SECTION 6.1(G) hereof;
(b) All taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements shall have been paid or provision for such payment
shall have been made to the reasonable satisfaction of the Lessor and
the Agent;
(c) No action or proceeding shall have been instituted, nor
shall any action or proceeding be threatened, before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority (i) to set aside,
restrain, enjoin or prevent the full performance of this Agreement, any
other Operative Agreement or any transaction contemplated hereby or
thereby or (ii) which is reasonably likely to have a Material Adverse
Effect;
(d) In the reasonable opinion of the Lessor and the Holders
and their counsel, the transactions contemplated by the Operative
Agreements do not and will not violate any material Legal Requirements
and do not and will not subject the Lessor or the Holders to any
materially adverse regulatory prohibitions or constraints;
(e) The Lessor and the Agent shall each have received an
Officer's Certificate of the Lessee, dated as of the Initial Closing
Date, in the form attached hereto as EXHIBIT D or in such other form as
is reasonably acceptable to such parties stating that (i) each and
every representation and warranty of the Lessee contained in the
Operative Agreements to which it is a party is true and correct in all
material respects on and as of the Initial Closing Date; (ii) no
Default or Event of Default has occurred and is continuing under any
Operative Agreement; (iii) each Operative Agreement to which Lessee is
a party is in full force and effect with respect to it; and (iv) the
Lessee has performed and complied with all covenants, agreements and
conditions contained herein or in any Operative Agreement required to
be performed or complied with by it on or prior to the Initial Closing
Date;
(f) The Lessor and the Agent shall each have received (i) a
certificate of the Secretary or an Assistant Secretary of each of the
Lessee and each Guarantor in the form attached hereto as EXHIBIT E or
in such other form as is reasonably acceptable to such parties
attaching and certifying as to (A) the resolutions of the Board of
Directors of Lessee or such Guarantor (as the case may be) duly
authorizing the execution, delivery
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and performance by Lessee or such Guarantor (as the case may be) of
each of the Operative Agreements to which it is or will be a party, (B)
its certificate of incorporation and by-laws, in each case certified as
of a recent date by the Secretary of State of the State of its
incorporation, and (C) the incumbency and signature of persons
authorized to execute and deliver on its behalf the Operative
Agreements to which it is a party and (ii) a good standing certificate
from the appropriate officer of each state in which it is required to
be qualified to do business as to its good standing in such state;
(g) Counsel for the Lessee and the Guarantors reasonably
acceptable to the other parties hereto shall have issued to the Lessor,
the Agent, the Lenders and the Holders an opinion in the form attached
hereto as EXHIBIT C or in such other form as is reasonably acceptable
to such parties; and
(h) As of the Initial Closing Date, there shall not have
occurred any material adverse change in the consolidated assets,
liabilities, operations, business or financial condition of the Lessee
from that set forth in the audited financial statements of the Lessee
dated December 31, 1997.
6.2. CONDITIONS TO THE LESSEE'S OBLIGATIONS. The obligation of the
Lessee to consummate the transactions contemplated by this Agreement, including
the obligation to execute and deliver the Operative Agreements to which it is a
party as of the Initial Closing Date, is subject to (i) the accuracy and
correctness on the Initial Closing Date of the representations and warranties of
the other parties hereto contained herein, (ii) the accuracy and correctness on
the Initial Closing Date of the representations and warranties of the other
parties hereto contained in any other Operative Agreement or certificate
delivered pursuant hereto or thereto, (iii) the performance by the other parties
hereto of their respective agreements contained herein and in the other
Operative Agreements, in each case to be performed by them on or prior to the
Initial Closing Date, and (iv) the satisfaction or waiver by the Lessee of all
of the following conditions on or prior to the Initial Closing Date:
(a) Each of the Operative Agreements to be entered into as of
the Initial Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, other than the Lessee, and shall be
in full force and effect, and no Default, other than Defaults of the
Lessee, shall exist thereunder, and the Lessee shall have received a
fully executed copy of each of the Operative Agreements (other than
Notes of which it shall have received a specimen);
(b) In the reasonable opinion of the Lessee and its counsel,
the transactions contemplated by the Operative Agreements do not
violate any material Legal Requirements and will not subject Lessee to
any materially adverse regulatory prohibitions or constraints;
(c) No action or proceeding shall have been instituted nor
shall any action or proceeding be threatened, before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental
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Authority (i) to set aside, restrain, enjoin or prevent the full
performance of this Agreement, any other Operative Agreement or any
transaction contemplated hereby or thereby or (ii) which is reasonably
likely to have a Material Adverse Effect;
(d) The Lessee and the Agent shall each have received an
Officer's Certificate of the Lessor dated as of such Closing Date in
the form attached hereto as EXHIBIT F or in such other form as is
reasonably acceptable to Lessee and the Agent, stating that (i) each
and every representation and warranty of the Lessor contained in the
Operative Agreements to which it is a party is true and correct on and
as of the Initial Closing Date; (ii) each Operative Agreement to which
the Lessor is a party is in full force and effect with respect to it,
and (iii) the Lessor has duly performed and complied with all
covenants, agreements and conditions contained herein or in any
Operative Agreement required to be performed or complied with by it on
or prior to the Initial Closing Date;
(e) The Lessee and the Agent shall each have received (i) a
certificate of the Secretary, an Assistant Secretary, Trust Officer or
Vice President of the Trust Company in the form attached hereto as
EXHIBIT G or in such other form as is reasonably acceptable to Lessee
and the Agent, attaching and certifying as to (A) the signing
resolutions, (B) its articles of incorporation or other equivalent
charter documents, as the case may be, certified as of a recent date by
an appropriate officer of the Trust Company, (C) its by-laws and (D)
the incumbency and signature of persons authorized to execute and
deliver on its behalf the Operative Agreements to which it is a party
and (ii) a good standing certificate from the state of incorporation of
the Trust Company; and
(f) Counsel for the Lessor acceptable to the other parties
hereto shall have issued to the Lessee, the Holders, the Lenders and
the Agent an opinion in the form attached hereto as EXHIBIT H or in
such other form as is reasonably acceptable to such parties.
6.3. CONDITIONS TO THE AGENT'S OBLIGATIONS. The obligation of the Agent
to consummate the transactions contemplated by this Agreement, including the
obligation to execute and deliver each of the Operative Agreements to which it
is a party as of the Initial Closing Date, is subject to (i) the accuracy and
correctness on the Initial Closing Date of the representations and warranties of
the other parties hereto contained herein, (ii) the accuracy and correctness on
the Initial Closing Date of the representations and warranties of the other
parties hereto contained in any other Operative Agreement or certificate
delivered pursuant hereto or thereto, (iii) the performance by the other parties
hereto of their respective agreements contained herein and in the other
Operative Agreements, in each case to be performed by them on or prior to the
Initial Closing Date, and (iv) the satisfaction, or waiver by the Agent, of all
of the following conditions on or prior to the Initial Closing Date:
(a) Each of the Operative Agreements to be entered into as of
the Initial Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, other than the Agent, and shall be in
full force and effect, and no Default or Event of Default shall exist
thereunder (both before and after giving effect to the transactions
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contemplated by the Operative Agreements), and the Agent shall have
received a fully executed copy of each of the Operative Agreements
(including the Notes). The Operative Agreements (or memoranda thereof),
any supplements thereto and any financing statements and fixture
filings in connection therewith required under the Uniform Commercial
Code shall have been filed or shall be promptly filed, if necessary, in
such manner as to enable the Lessor's counsel to render its opinion
referred to in SECTION 6.2(F) hereof;
(b) The satisfaction of each of the conditions set forth in
SECTIONS 6.1(B), (C), (E), (F) AND (H) and SECTIONS 6.2(D), (E) AND (F)
hereof; and
(c) In the reasonable opinion of the Agent and its counsel,
the transactions contemplated by the Operative Agreements do not and
will not violate any material Legal Requirements and do not and will
not subject the Agent to any materially adverse regulatory prohibitions
or constraints.
SECTION 7. REPRESENTATIONS AND WARRANTIES ON THE INITIAL
CLOSING DATE.
7.1. REPRESENTATIONS AND WARRANTIES OF THE INITIAL HOLDERS. Effective
as of the Initial Closing Date, each Holder on such date represents and warrants
to each of the other parties hereto that:
(a) It is a national banking association, or a corporation
that is a commercial finance company, in each case duly organized,
validly existing and in good standing under the laws of the United
States or the country or state of its organization and has the power
and authority to carry on its business as now conducted and to enter
into and perform its obligations under each Operative Agreement to
which it is or will be a party and each other agreement, instrument and
document to be executed and delivered by it on or before each Closing
Date in connection with or as contemplated by each such Operative
Agreement to which it is or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party have been duly authorized
by all necessary action on its part and neither the execution and
delivery thereof, nor the consummation of the transactions contemplated
thereby, nor compliance by it with any of the terms and provisions
thereof (i) requires or will require any approval of the stockholders
of, or approval or consent of any trustee or holder of any indebtedness
or obligations of, such Holder which have not been obtained and in full
force and effect, (ii) violates or will violate any Legal Requirement
applicable to or binding on it (except no representation or warranty is
made as to any Legal Requirement to which it may be subject solely as a
result of the activities of the Lessee) as of the date hereof, (iii)
violates or will violate or result in any breach of or constitute any
default under, or result in the creation of any Lien upon any Property
or any of the Improvements (other than Liens created by the Operative
Agreements) under its certificate of incorporation or other equivalent
charter documents, or any indenture,
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mortgage, chattel mortgage, deed of trust, conditional sales contract,
bank loan or credit agreement or other agreement or instrument to which
it is a party or by which it or its properties is bound or affected or
(iv) requires or will require any Governmental Action by any
Governmental Authority (other than arising solely by reason of the
business, condition or activities of the Lessee or any Affiliate
thereof or the construction or use of the Properties or the
Improvements);
(c) This Agreement and each other Operative Agreement to which
it is or will be a party have been, or will be, duly executed and
delivered by it and constitute, or upon execution and delivery will
constitute, a legal, valid and binding obligation enforceable against
it in accordance with the terms thereof, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting the enforceability of creditors' rights
generally and to the effect of general principles of equity (whether
considered in a proceeding at law or in equity);
(d) There is no action or proceeding pending or, to its
knowledge, threatened against it before any Governmental Authority that
questions the validity or enforceability of any Operative Agreement to
which it is or will become a party or that, if adversely determined,
would materially and adversely affect its ability to perform its
obligations under the Operative Agreements to which it is a party;
(e) It has not assigned or transferred any of its right, title
or interest in or under the Lease except in accordance with the
Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) It is not a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of a "holding company" or a
"public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or a "public utility" within the
meaning of the Federal Power Act, as amended. It is not an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act or an "investment adviser"
within the meaning of the Investment Advisers Act of 1940, as amended;
and
(h) It is acquiring its interest in the Trust Estate for its
own account for investment and not with a view to any distribution (as
such term is used in Section 2(11) of the Securities Act) thereof, and
if in the future it should decide to dispose of its interest in the
Trust Estate, it understands that it may do so only in compliance with
the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder and any applicable state securities
laws. Neither it nor anyone authorized to act on its behalf has taken
or will take any action which would subject, as a direct result of such
action alone, the issuance or sale of any interest in any Property, the
Trust Estate or the Lease to the registration requirements of Section 5
of the Securities Act. No representation or warranty contained in this
SECTION 7.1(I) shall include or cover any
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action or inaction of the Lessee or any Affiliate thereof whether or
not purportedly on behalf of the Holders, the Owner Trustee or any of
their Affiliates.
7.2. REPRESENTATIONS AND WARRANTIES OF THE OWNER TRUSTEE. Effective as
of the Initial Closing Date, Trust Company in its individual capacity and as the
Owner Trustee, as indicated, represents and warrants to each of the other
parties hereto as follows, provided, that the representations in paragraphs (h),
(i), (j) and (k) below are made solely in its capacity as the Owner Trustee:
(a) It is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America and has the power and authority to enter into and
perform its obligations under the Trust Agreement and (assuming due
authorization, execution and delivery of the Trust Agreement by the
Holders) has the corporate and trust power and authority to act as the
Owner Trustee and to enter into and perform the obligations under each
of the other Operative Agreements to which Trust Company or the Owner
Trustee, as the case may be, is or will be a party and each other
agreement, instrument and document to be executed and delivered by it
on or before each Closing Date in connection with or as contemplated by
each such Operative Agreement to which Trust Company or the Owner
Trustee, as the case may be, is or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party, either in its individual
capacity or (assuming due authorization, execution and delivery of the
Trust Agreement by the Holders) as the Owner Trustee, as the case may
be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the
terms and provisions thereof (i) requires or will require any approval
of its stockholders, or any approval or consent of any trustee or
holders of any of its indebtedness or obligations, (ii) violates or
will violate any current law, governmental rule or regulation relating
to its banking or trust powers, (iii) violates or will violate or
result in any breach of or constitute any default under, or result in
the creation of any Lien upon any of its property under, (A) its
charter or by-laws, or (B) any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it is a party or by
which it or its properties may be bound or affected, which violation,
breach, default or Lien under clause (B) would materially and adversely
affect its ability, in its individual capacity or as Owner Trustee, to
perform its obligations under the Operative Agreements to which it is a
party or (iv) requires or will require any Governmental Action by any
Governmental Authority regulating its banking or trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is
the legal, valid and binding obligation of the Holders, each other
Operative Agreement to which the Trust Company or the Owner Trustee, as
the case may be, is or will be a party have been, or will be, duly
executed and delivered by Trust Company or the Owner Trustee, as the
case may
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be, and the Trust Agreement and each such other Operative Agreement to
which Trust Company or the Owner Trustee, as the case may be, is a
party constitutes, or upon execution and delivery will constitute, a
legal, valid and binding obligation enforceable against Trust Company
or the Owner Trustee, as the case may be, in accordance with the terms
thereof;
(d) There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability, in its individual capacity or as Owner Trustee, to
perform its obligations under the Operative Agreements to which it is a
party or would question the validity or enforceability of any of the
Operative Agreements to which it is or will become a party;
(e) It has not assigned or transferred any of its right, title
or interest in or under the Lease or the Agency Agreement except in
accordance with the Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) Neither the Owner Trustee nor any Person authorized by the
Owner Trustee to act on its behalf has offered or sold any interest in
the Trust Estate or the Notes, or in any similar security relating to a
Property, or in any security the offering of which for the purposes of
the Securities Act would be deemed to be part of the same offering as
the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person other than, in the
case of the Notes, the Lenders, and neither the Owner Trustee nor any
Person authorized by the Owner Trustee to act on its behalf will take
any action which would subject, as a direct result of such action
alone, the issuance or sale of any interest in the Trust Estate or the
Notes to the provisions of Section 5 of the Securities Act, or require
the qualification of any Operative Agreement under the Trust Indenture
Act of 1939, as amended;
(h) The Owner Trustee's chief place of business, chief
executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each
other Operative Agreement are kept are located at 79 South Main Street,
Salt Lake City, Utah 84111;
(i) The Owner Trustee is not engaged principally in, and does
not have as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System of the United States), and no part of the
proceeds of the Loans or the Holder Fundings will be used by it to
purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any such margin stock
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or for any purpose that violates, or is inconsistent with, the
provisions of Regulations T, U, or X of the Federal Reserve Board; and
(j) The Owner Trustee is not a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or a "public
utility" within the meaning of the Federal Power Act, as amended. The
Owner Trustee is not an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company
Act or an "investment adviser" within the meaning of the Investment
Advisers Act of 1940, as amended.
7.3. REPRESENTATIONS AND WARRANTIES OF THE CONSTRUCTION AGENT AND THE
LESSEE. Effective as of the Initial Closing Date, Construction Agent and the
Lessee represent and warrant to each of the other parties hereto that:
(a) Each of the Construction Agent and the Lessee is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware; each of their Subsidiaries is listed
on Schedule 5 hereto and each is duly organized and validly existing
under the laws of the jurisdiction of its organization; and each of the
Construction Agent and the Lessee and each of their Subsidiaries is
duly qualified to do business in each other jurisdiction where the
nature of its business makes such qualification necessary, except where
such failure to so qualify would not have a Material Adverse Effect.
Each of the Construction Agent, the Lessee and each of their
Subsidiaries has the power and authority to carry on its business as
now conducted and to enter into and perform its obligations under each
Operative Agreement to which it is or will be a party and each other
agreement, instrument and document to be executed and delivered by it
on or before each Closing Date in connection with or as contemplated by
each such Operative Agreement to which it is or will be a party;
(b) The execution, delivery and performance by each of the
Construction Agent, the Lessee and any of their Subsidiaries of this
Agreement and the other Operative Agreements to which each is or will
be a party have been duly authorized by all necessary corporate action
on the part of each of the Construction Agent, the Lessee and each such
Subsidiary (including any necessary shareholder action), have received
all necessary governmental approval, and do not and will not (i)
violate any Legal Requirement, decree, judgment or award which is
applicable to or binding on the Construction Agent or the Lessee or any
of their Subsidiaries, (ii) violate or conflict with, or result in a
breach of, any provision of the Certificate of Incorporation, By-Laws
or other organizational documents of either the Construction Agent or
the Lessee or any of their Subsidiaries, or any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales contract, bank loan,
credit agreement or other agreement, instrument or document to which
either the Construction Agent or the Lessee or any of their
Subsidiaries is a party or which is binding on either the Construction
Agent or the Lessee or any of their Subsidiaries or any of their
respective properties, or (iii) result in, or require, the creation or
imposition of any Lien
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(other than pursuant to the terms of the Operative Agreements) on any
asset of either of the Construction Agent or the Lessee or any of their
Subsidiaries;
(c) Each of this Agreement and each other Operative Agreement
to which the Construction Agent, the Lessee or any of their
Subsidiaries is or will be a party has been, or will be, duly executed
and delivered by it and constitutes, or upon execution and delivery
will constitute, the legal, valid or binding obligation of the
Construction Agent, the Lessee or such Subsidiary, as the case may be,
enforceable against it in accordance with the terms thereof, subject to
the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar laws affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity (whether considered in a proceeding at law or in equity). The
Construction Agent, the Lessee and each of their Subsidiaries have each
executed the various Operative Agreements required to be executed as of
the Initial Closing Date;
(d) There are no actions, suits or proceedings (including,
without limitation, any derivative action) pending or, to the knowledge
of either the Construction Agent or the Lessee, threatened with respect
to the Construction Agent or Lessee or any of their Subsidiaries which,
if adversely decided, are reasonably likely to result, either
individually or collectively, in a Material Adverse Effect. None of the
Construction Agent, the Lessee nor any of their Subsidiaries has any
material contingent liabilities not provided for or disclosed in the
financial statements referred to in SECTION 7.3(F), which are required
in accordance with GAAP to be reported in such financial statements;
(e) No Governmental Action by any Governmental Authority or
authorization, registration, consent, approval, waiver, notice or other
action by, to or of any other Person is required to authorize or is
required in connection with (i) the execution, delivery or performance
of any Operative Agreement or (ii) the legality, validity, binding
effect or enforceability of any Operative Agreement, in each case,
except those which have been obtained and are in full force and effect;
(f) (i) The audited consolidated financial statements of each
of the Construction Agent and the Lessee as at December 31, 1997,
copies of which have been furnished to the Agent and the Owner Trustee,
were prepared in accordance with GAAP and fairly present the financial
condition of each of the Construction Agent and the Lessee and their
Subsidiaries on a consolidated basis as of such date and their
consolidated results of operations for the fiscal year then ended and
(ii) the unaudited consolidated financial statements as at September
30, 1998, copies of which have been furnished to the Agent and the
Owner Trustee, were prepared in accordance with GAAP (subject to normal
year-end adjustments) and fairly present the financial condition of the
Construction Agent and the Lessee and their Subsidiaries on a
consolidated basis as of such date and their consolidated results of
operations for the fiscal year then ended and such two-quarter period,
respectively;
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(g) Since the date of the audited financial statements
described in SECTION 7.3(F)(I), there has been no event or occurrence
which has had or is reasonably likely to have a Material Adverse
Effect;
(h) Neither the Construction Agent nor the Lessee knows of any
proposed material tax assessments against it or any of its
Subsidiaries. No extension of time for assessment or payment of any
material federal, state or local tax by either the Construction Agent
or the Lessee or any of their Subsidiaries is in effect;
(i) ERISA.
(A) None of the employee benefit plans maintained at
any time by the Construction Agent or the Lessee or any of
their Subsidiaries or the trusts created thereunder has
engaged in a prohibited transaction which could subject any
such employee benefit plan or trust to a material tax or
penalty on prohibited transactions imposed under Code Section
4975 or ERISA;
(B) None of the employee benefit plans maintained at
any time by the Construction Agent or the Lessee or any of
their Subsidiaries which are employee pension benefit plans
and which are subject to Title IV of ERISA or the trusts
created thereunder has been terminated nor has any such
employee benefit plan of the Construction Agent or Lessee or
any of their Subsidiaries incurred any liability to the PBGC,
other than for required insurance premiums which have been
paid; neither the Construction Agent nor the Lessee or any of
their Subsidiaries has withdrawn from or caused a partial
withdrawal to occur with respect to any Multi-employer Plan;
the Construction Agent, the Lessee and their Subsidiaries have
made or provided for all contributions to all such employee
pension benefit plans which they maintain and which are
required as of the end of the most recent fiscal year under
each such plan; neither the Construction Agent nor the Lessee
or any of their Subsidiaries has incurred any accumulated
funding deficiency with respect to any such plan, whether or
not waived; nor has there been any reportable event, or other
event or condition, which presents a material risk of
termination of any such employee benefit plan by the PBGC;
(C) The present value of all vested accrued benefits
under the employee pension benefit plans which are subject to
Title IV of ERISA, maintained by the Construction Agent, the
Lessee or any of their Subsidiaries, did not, as of the most
recent valuation date for each such plan, exceed the then
current value of the assets of such employee benefit plans
allocable to such benefits;
(D) The consummation of the transactions contemplated
by the Operative Agreements will not involve any prohibited
transaction under ERISA;
(E) To the best of the Construction Agent's and the
Lessee's knowledge, each employee pension benefit plan subject
to Title IV of ERISA,
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maintained by the Construction Agent, the Lessee, or any of
their Subsidiaries, has been administered in accordance with
its terms and is in compliance in all material respects with
all applicable requirements of ERISA and other applicable
laws, regulations and rules;
(F) There has been no withdrawal liability incurred
with respect to any Multi-employer Plan to which the
Construction Agent, the Lessee or any of their Subsidiaries is
or was a contributor;
(G) As used in this Agreement, the terms "employee
benefit plan," "employee pension benefit plan," "accumulated
funding deficiency," "reportable event," and "accrued
benefits" shall have the respective meanings assigned to them
in ERISA, and the term "prohibited transaction" shall have the
meaning assigned to it in Code Section 4975 and ERISA;
(H) Neither the Construction Agent nor the Lessee or
any of their Subsidiaries has any liability, contingent or
otherwise, under any plan or program or the equivalent for
unfunded post-retirement benefits, including pension, medical
and death benefits, which liability would have a Material
Adverse Effect;
(j) Upon the execution and delivery of each Lease Supplement
to the Lease, (i) the Lessee will have unconditionally accepted the
Property subject to the Lease Supplement and will have a valid and
subsisting leasehold interest in the Property, subject only to the
Permitted Exceptions, and (ii) no offset will exist with respect to any
Rent or other sums payable under the Lease;
(k) Neither the Construction Agent nor the Lessee or any of
their Subsidiaries has filed a voluntary petition in bankruptcy or been
adjudicated bankrupt or insolvent, or filed any petition or answer
seeking any reorganization, liquidation, receivership, dissolution or
similar relief under any bankruptcy, receivership, insolvency, or other
law relating to relief for debtors, or sought or consented to or
acquiesced in the appointment of any trustee, receiver, conservator or
liquidator of all or any part of its properties or its interest in any
Property. No court of competent jurisdiction has entered an order,
judgment, or decree approving a petition filed against the Construction
Agent, the Lessee or any of their Subsidiaries seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any federal or state bankruptcy,
receivership, insolvency or other law relating to relief for debtors,
and no other liquidator has been appointed for the Construction Agent,
the Lessee or any of their Subsidiaries or all or any part of its
properties or its interest in any Property, and no such action is
pending. Neither the Construction Agent nor the Lessee or any of their
Subsidiaries has given notice to any Governmental Authority or any
Person of insolvency or pending insolvency, or suspension or pending
suspension of operations;
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(l) Each of the Construction Agent, the Lessee and their
Subsidiaries owns marketable title to, or a subsisting leasehold
interest in, all of its Properties free and clear of all Liens, except
Permitted Liens;
(m) Neither the Construction Agent, the Lessee nor any of
their Subsidiaries is (a) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act or an "investment adviser" within the meaning of
the Investment Advisers Act of 1940, as amended, or (b) a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", or a "public utility", within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or a "public
utility" within the meaning of the Federal Power Act, as amended;
(n) Neither the Construction Agent, the Lessee nor any of
their Subsidiaries is engaged principally in, or has as one of its
important activities, the business of extending credit for the purpose
of purchasing or carrying any margin stock (within the meaning of
Regulation U of the Federal Reserve Board), and no part of the proceeds
of the Loans or the Holder Fundings will be used for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying
any margin stock or maintaining or extending credit to others for such
purpose, or for any purpose that violates, or is inconsistent with
Regulations T, U, or X of the Federal Reserve Board;
(o) Each of the Construction Agent, the Lessee and their
Subsidiaries has filed all material tax returns and reports required by
Law to have been filed by it and has paid all Taxes and governmental
charges thereby shown to be owing, except any such Taxes or charges
which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall in accordance with
GAAP have been set aside on its books;
(p) To the best of the knowledge of each of the Construction
Agent and the Lessee, after inquiry it has deemed appropriate, each of
the Construction Agent, the Lessee and their Subsidiaries is in
material compliance with all Environmental Laws and Occupational Safety
and Health Laws where failure to comply could have a Material Adverse
Effect. None of the Construction Agent, the Lessee nor any of their
Subsidiaries has received notice of any claims that any of them is not
in compliance in all material respects with any Environmental Law where
failure to comply could have a Material Adverse Effect;
(q) Each of the Construction Agent, the Lessee and their
Subsidiaries is in compliance with all statutes, judicial and
administrative orders, permits and governmental rules and regulations
which are material to its business or the non-compliance with which
could result in Material Adverse Result;
(r) All information heretofore or contemporaneously herewith
furnished by either the Construction Agent or the Lessee or any of
their Subsidiaries to the Agent, the
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Owner Trustee, any Lender or any Holder for purposes of or in
connection with this Agreement and the transactions contemplated hereby
is, and all information hereafter prepared and furnished by the
Construction Agent, the Lessee or any of their Subsidiaries to the
Agent, the Owner Trustee, any Lender or any Holder pursuant hereto or
in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified,
and such information, taken as a whole, does not and will not omit to
state any material fact necessary to make such information, taken as a
whole, not misleading;
(s) WETLANDS. Except as listed on Schedule 7.3(s) there are no
wetlands, tidelands or swamp or overflow lands on any Property;
(t) ON-SITE AND OFF-SITE CONDITIONS. Except as listed on
Schedule 7.3(t), there is no condition arising from or affecting any
Property or arising from or affecting any lands nearby or adjacent to
any Property that is having or is reasonably likely to have a
significant adverse effect upon human health or the environment at such
Property or upon the use or value of such Property; and
(u) CONDEMNATION. The Lessee and the Construction Agent have
done the proper due diligence to determine, and have determined, that
there is no reasonable likelihood that any Property will be condemned,
taken by eminent domain or otherwise taken by any Governmental
Authority.
7.4. REPRESENTATIONS AND WARRANTIES OF THE AGENT. Effective as of the
Initial Closing Date, the Agent represents and warrants to each of the other
parties hereto that:
(a) It is a national banking association duly organized and
validly existing under the laws of the United States of America and has
the full power and authority to enter into and perform its obligations
under this Agreement and each other Operative Agreement to which it is
or will be a party;
(b) The execution, delivery and performance by the Agent of
this Agreement and each other Operative Agreement to which it is or
will be a party are not, and will not be, inconsistent with the
articles of incorporation or by-laws or other charter documents of the
Agent, do not and will not contravene any applicable Law of the State
of Florida or of the United States of America governing its activities
and will not contravene any provision of, or constitute a default under
any indenture, mortgage, contract or other instrument to which it is a
party or by which it or its properties are bound, or require any
consent or approval of any Governmental Authority under any applicable
law, rule or regulation of the State of Florida or any federal law,
rule or regulation of the United States of America governing its
activities; and
(c) Each of this Agreement and each other Operative Agreement
to which it is a party has been, or when executed and delivered will
be, duly authorized by all necessary corporate action on the part of
the Agent and has been, or on such Closing Date will be,
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duly executed and delivered by the Agent and, assuming the due
authorization, execution and delivery hereof and thereof by the other
parties hereto and thereto, will constitute a legal, valid and binding
obligation enforceable against the Agent in accordance with the terms
thereof.
SECTION 8. REPRESENTATIONS AND WARRANTIES ON FUNDING DATES.
8.1. REPRESENTATIONS AND WARRANTIES ON PROPERTY CLOSING DATES. The
Construction Agent and the Lessee hereby represent and warrant as of each
Property Closing Date as follows:
(a) The representations and warranties of the Construction
Agent and the Lessee set forth in the Operative Agreements (including
without limitation the representations and warranty set forth in
SECTION 7 of this Agreement) are true and correct in all material
respects on and as of such Property Closing Date as if made on and as
of such date. The Construction Agent, the Lessee and their Subsidiaries
are in all material respects in compliance with their respective
obligations under the Operative Agreements and there exists no Default
or Event of Default under any of the Operative Agreements. No Default
or Event of Default will occur under any of the Operative Agreements as
a result of, or after giving effect to, the Funding requested by the
Requisition on such Property Closing Date;
(b) The Properties to be acquired are being acquired at a
price that is not in excess of fair market value and such Properties
consist of (i) unimproved Land, or (ii) Land and existing Improvements
thereon which Improvements are either suitable for occupancy at the
time of acquisition or will be renovated or modified in accordance with
the terms of this Agreement, or (iii) Equipment. Each of the Properties
is located at the site set forth on the applicable Requisition, which
is in one of the Approved States;
(c) Upon the acquisition of each Property on such Property
Closing Date, and at all times thereafter, the Lessor will have
marketable title to such Property, subject only to Permitted
Exceptions;
(d) The execution and delivery of each Operative Agreement
delivered by the Construction Agent, the Lessee or any of their
subsidiaries on such Property Closing Date and the performance of the
obligations of the Construction Agent, the Lessee and each of their
subsidiaries under each Operative Agreement have been duly authorized
by all requisite corporate action of the Construction Agent or the
Lessee, as applicable;
(e) Each Operative Agreement delivered on such Property
Closing Date by the Construction Agent, the Lessee or any of their
subsidiaries has been duly executed and delivered by the Construction
Agent, the Lessee or such subsidiary;
(f) Each Operative Agreement delivered by the Construction
Agent, the Lessee or any of their Subsidiaries on such Property Closing
Date is a legal, valid and binding obligation of the Construction
Agent, the Lessee or such Subsidiary, as applicable,
27
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enforceable against the Construction Agent, the Lessee or such
Subsidiary, as applicable, in accordance with its respective terms,
subject to the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar laws affecting the
enforceability of creditors' rights generally and to the effect of
general principles of equity (whether considered in a proceeding at law
or in equity);
(g) Upon filing of each of the UCC Financing Statements (with
respect to the Property being acquired) in the filing offices
designated by the Construction Agent or the Lessee, such UCC Financing
Statements will have been filed with the appropriate Governmental
Authorities in order to perfect a security interest in the Property
described therein (to the extent perfection can be obtained by filing
under the UCC);
(h) Upon filing in the filing offices designated by the
Construction Agent or the Lessee, the Lender Financing Statements,
together with an assignment to the Agent of the filed Lessor Financing
Statements, will perfect a valid first priority security interest in
all Equipment and other collateral described therein in which a
security interest or mortgage can be perfected by filing under the UCC,
subject only to Permitted Exceptions, and upon filing, the Lessor
Financing Statements will protect Lessor's interest under the Lease to
the extent the Lease is a security agreement and mortgage;
(i) No portion of any Property being acquired by the Lessor on
such Property Closing Date is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or
other applicable agency, or if any such Property is located in an area
identified as a special flood hazard area by any such agency, then
flood insurance has been obtained for such Property in accordance with
SECTION 14.2(B) of the Lease and in accordance with the National Flood
Insurance Act of 1968, as amended;
(j) The Construction Agent has obtained insurance coverage for
each Property being acquired by the Lessor on such Property Closing
Date which meets the requirements of ARTICLE XIV of the Lease and all
of such coverage is in full force and effect;
(k) Each Property being acquired by the Lessor on such
Property Closing Date complies with all Legal Requirements (including,
without limitation, all zoning and land use laws and Environmental
Laws), except to the extent that failure to comply therewith would not,
individually or in the aggregate, have a Material Adverse Effect; and
(l) All utility services and facilities necessary for the
construction of the Improvements existing on, or to be constructed
after, such Property Closing Date (including, without limitation, gas,
electrical, water and sewage services and facilities) are available at
the boundaries of the real property upon which such Improvements exist
or will be constructed on each such Property prior to the Completion
Date for such Property.
8.2. REPRESENTATIONS AND WARRANTIES UPON INITIAL CONSTRUCTION FUNDINGS.
The Construction Agent and the Lessee hereby represent and warrant as of each
date on which an Initial Construction Funding is made as follows:
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(a) The representations and warranties of the Construction
Agent and the Lessee set forth in the Operative Agreements (including
without limitation the representations and warranties set forth in
SECTIONS 7 AND 8.1) are true and correct in all material respects on
and as of the date of such Initial Construction Funding as if made on
and as of such date. The Construction Agent and the Lessee are in all
material respects in compliance with their respective obligations under
the Operative Agreements and there does not exist any Default or Event
of Default under any of the Operative Agreements. No Default or Event
of Default will occur under any of the Operative Agreements as a result
of, or after giving effect to, the Funding requested by the Requisition
on such date;
(b) The Lessor has marketable title to each Property, subject
only to Permitted Exceptions;
(c) Upon filing in the filing offices designated by the
Construction Agent or the Lessee, the Lender Financing Statements,
together with an assignment of the filed Lessor Financing Statements,
will perfect a valid first priority security interest in all the
Properties and other collateral described therein in which a security
interest can be perfected by filing under the UCC, subject only to
Permitted Liens;
(d) All consents, licenses, permits, authorizations,
assignments and building permits required as of the date on which such
Funding is made by all Legal Requirements or pursuant to the terms of
any contract, indenture, instrument or agreement for construction,
completion, occupancy, operation, leasing or subleasing of each
Property with respect to which a Funding is being made have been
obtained and are in full force and effect, except to the extent that
the failure to so obtain would not, individually or in the aggregate,
have a Material Adverse Effect;
(e) The Construction Agent has obtained insurance coverage
covering the Property which is the subject of such Funding which
coverage meets the requirements of SECTION 2.6 of the Agency Agreement
before commencing construction, repairs or modifications, as the case
may be, and such coverage is in full force and effect;
(f) The Improvements which are the subject of the Funding, as
improved in accordance with the Plans and Specifications, will comply
as of the applicable Completion Date with all applicable Legal
Requirements and Insurance Requirements (including, without limitation,
all zoning and land use laws and Environmental Laws), except to the
extent the failure to comply therewith would not, individually or in
the aggregate, have a Material Adverse Effect. The Plans and
Specifications have been or will be prepared in accordance with all
applicable Legal Requirements (including, without limitation, all
applicable Environmental Laws and building, planning, zoning and fire
codes), except to the extent the failure to comply therewith would not,
individually or in the aggregate, have a Material Adverse Effect, and
upon completion of such Improvements in accordance with the Plans and
Specifications, such Improvements will not encroach in any manner onto
any adjoining land (except as permitted by express written easements)
and such Improvements and the use thereof by the Lessee and its agents,
assignees, employees, invitees, lessees,
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licensees and tenants will comply as of the applicable Completion Date
in all respects with all applicable Legal Requirements (including,
without limitation, all applicable Environmental Laws and building,
planning, zoning and fire codes), except to the extent the failure to
comply therewith would not, individually or in the aggregate, have a
Material Adverse Effect. Upon completion of such Improvements in
accordance with the Plans and Specifications, (i) there will be no
material defects to such Improvements including, without limitation,
the plumbing, heating, air conditioning and electrical systems thereof
and (ii) all water, sewer, electric, gas, telephone and drainage
facilities and all other utilities required to adequately service such
Improvements for their intended use will be available pursuant to
adequate permits (including any that may be required under applicable
Environmental Laws), except to the extent that failure to obtain any
such permit would not, individually or in the aggregate, have a
Material Adverse Effect. There is no action, suit or proceeding
(including any proceeding in condemnation or eminent domain or under
any Environmental Law) pending or, to the best knowledge of the Lessee
or the Construction Agent, threatened which adversely affects the title
to, or the use, operation or value of, such Properties. No fire or
other casualty with respect to such Properties has occurred which (y)
has had a Material Adverse Effect or (2) is not fully covered by
insurance. All utilities serving the related Properties, or proposed to
serve the related Properties in accordance with the Plans and
Specifications, are located in (or will be located in) and vehicular
access to such Improvements is provided by (or will be provided by),
either public rights-of-way abutting the related Property or
Appurtenant Rights. All licenses, approvals, authorizations, consents,
permits (including, without limitation, building, demolition and
environmental permits, licenses, approvals, authorizations and
consents), easements and rights-of-way, including proof of dedication,
required for (i) the use, treatment, storage, transport, disposal or
disposition of any Hazardous Substance on, at, under or from the real
property underlying such Improvements during the construction of such
Improvements and the use and operation of such Improvements following
such construction, (ii) the construction of such Improvements in
accordance with the Plans and Specifications and the Agency Agreement
and (iii) the use and operation of such Improvements following such
construction with the applicable Equipment which such Improvements
support for the purposes for which they were intended have either been
obtained from the appropriate Governmental Authorities or from private
parties, as the case may be, or will be obtained from the appropriate
Governmental Authorities or from private parties, as the case may be,
prior to commencing any such construction or use and operation, as
applicable; and
(g) All conditions precedent contained in this Agreement and
in the other Operative Agreements relating to the Initial Construction
Funding have been substantially satisfied.
8.3. REPRESENTATIONS AND WARRANTIES UPON THE DATE OF EACH CONSTRUCTION
FUNDING THAT IS NOT AN INITIAL CONSTRUCTION FUNDING. The Construction Agent and
the Lessee hereby represent and warrant as of each date on which a Construction
Funding is made, when such advance is not an Initial Construction Funding, as
follows:
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(a) The representations and warranties of the Construction
Agent and the Lessee set forth in the Operative Agreements (including
the representations and warranties set forth in SECTIONS 7, 8.1 AND
8.2) are true and correct in all material respects on and as of the
date of such Construction Funding as if made on and as of such date.
The Construction Agent and the Lessee are in all material respects in
compliance with their respective obligations under the Operative
Agreements and there does not exist any Default or Event of Default
under any of the Operative Agreements. No Default or Event of Default
will occur under any of the Operative Agreements as a result of, or
after giving effect to, the Funding requested by the Requisition on
such date;
(b) Construction of the Improvements to date has been
performed in a good and workmanlike manner, substantially in accordance
with the Plans and Specifications and in compliance with all Insurance
Requirements and Legal Requirements, except to the extent noncompliance
with any Legal Requirements would not, individually or in the
aggregate, have a Material Adverse Effect;
(c) All consents, licenses, permits, authorizations,
assignments and building permits required as of the date on which such
Funding is made by all Legal Requirements or pursuant to the terms of
any contract, indenture, instrument or agreement for construction,
completion, occupancy, operation, leasing or subleasing of each
Property have been obtained and are in full force and effect;
(d) When completed, the Improvements shall be wholly within
any building restriction lines (unless consented to by applicable
Government Authorities), however established; and
(e) The Funding is secured by the Lien of the Security
Agreement, and there have been no Liens against the applicable
Improvements other than Permitted Liens.
SECTION 9. PAYMENT OF CERTAIN EXPENSES.
9.1. TRANSACTION EXPENSES.
(a) Lessor agrees on the Initial Closing Date, to pay, or
cause to be paid, all reasonable fees, expenses and disbursements of
the various outside legal counsels for the Lessor and the Agent in
connection with the transactions contemplated by the Operative
Agreements and incurred in connection with the Initial Closing Date,
including all Transaction Expenses (arising in connection with the
Initial Closing Date), and all other reasonable fees, expenses and
disbursements in connection with the Initial Closing Date, and
including, without limitation, all fees, taxes and expenses for the
recording, registration and filing of documents; PROVIDED, HOWEVER,
that the Lessor shall pay such amounts described in this SECTION 9.1(A)
only if (i) such amounts are properly described in a Requisition
delivered on or before such date (or, in the absence of such a
Requisition, if requested by the Agent, subject to SECTION 5.2(C)), and
(ii) funds are made available by the Lenders and the Holders in
connection with such Requisition in an amount sufficient to
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allow such payment. On the Initial Closing Date, after delivery and
receipt of the Requisition referenced in SECTION 4.2(A) hereof and
satisfaction of the other conditions precedent for such date, the
Holders shall make Holder Fundings and the Lenders shall make Loans to
the Lessor to pay for the Transaction Expenses, fees, expenses and
other disbursements referenced in this SECTION 9.1(A).
(b) Lessor agrees on each Property Closing Date, on the date
of any Construction Funding and on the Completion Date to pay, or cause
to be paid, all reasonable fees, expenses and disbursements of the
various legal counsels for the Lessor and the Agent in connection with
the transactions contemplated by the Operative Agreements and billed in
connection with such Property Closing Date, the date of such Funding,
or such Completion Date, including all Transaction Expenses (arising
with respect to the Initial Closing Date, such Property Closing Date,
the date of such Funding or such Completion Date), all fees, expenses
and disbursements incurred with respect to the various items referenced
in SECTIONS 5.3, 5.4, 5.5 OR 5.6 (including without limitation the cost
of any Appraisals or environmental site assessments, any developer's
fees, any premiums for title insurance policies and charges for any
updates to such policies) and all other reasonable fees, expenses and
disbursements in connection with such Property Closing Date, the date
of such Funding or such Completion Date including, without limitation,
all expenses relating to and all fees (including brokers' fees), taxes
(including any and all stamp, transfer or similar taxes) and expenses
for the recording, registration and filing of documents; PROVIDED,
HOWEVER, the Lessor shall pay such amounts described in this SECTION
9.1(B) only if (i) such amounts are properly described in a Requisition
delivered on the applicable date (or, in the absence of such a
Requisition, if requested by the Agent, subject to SECTION 5.2(C)), and
(ii) funds are made available by the Lenders and the Holders in
connection with such Requisition in an amount sufficient to allow such
payment. On each Property Closing Date, on the date of any Construction
Funding or any Completion Date, after delivery of the applicable
Requisition and satisfaction of the other conditions precedent for such
date, the Holders shall make a Holder Funding and the Lenders shall
make Loans to the Lessor to pay for the Transaction Expenses, fees,
expenses and other disbursements referenced in this SECTION 9.1(B).
9.2. CERTAIN FEES AND EXPENSES. Lessee agrees to pay or cause to be
paid (i) all reasonable costs and expenses (including reasonable counsel fees
and expenses) incurred by the Construction Agent, the Lessee, the Agent, the
Lenders, the Holders or the Lessor in entering into any future amendments or
supplements requested by the Lessee with respect to any of the Operative
Agreements, whether or not such amendments or supplements are ultimately entered
into, or giving or withholding of waivers of consents hereto or thereto which
have been requested by the Lessee, or any purchase of any Property by the Lessee
pursuant to ARTICLE XX of the Lease, (ii) all reasonable costs and expenses
(including reasonable counsel fees and expenses) incurred by the Lessor, the
Construction Agent, the Lessee, the Holders, the Lenders or the Agent in
connection with the enforcement of any Operative Agreement or any exercise of
remedies under any Operative Agreement, and (iii) (following the Completion Date
for the initial Property), the initial and annual Owner Trustee's fee and all
reasonable expenses of the Owner Trustee and any necessary co-trustees
(including reasonable outside counsel fees and expenses) or any
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successor owner trustee, for acting as owner trustee under the Trust Agreement.
From the date of this Agreement through the Completion Date for the initial
Property, the Owner Trustee shall cause to be paid the initial and annual Owner
Trustee's fee and all reasonable expenses of the Owner Trustee and any necessary
co-trustees (including reasonable outside counsel fees and expenses) or any
successor owner trustee, (a) to the extent, but only to the extent, amounts are
available therefor under the Available Commitments and Available Holder
Commitments and (b) unless each Lender and each Holder has declined in writing
to fund such amount. Notwithstanding any other provision in any other Operative
Agreement to the contrary, all amounts so advanced shall be deemed added to the
Property Cost of all the Properties (ratably with respect to each Property,
based on the ratio of the Property Cost for such Property individually to the
aggregate Property Cost of all Properties at such time).
9.3. UNUSED FEE AND HOLDER UNUSED FEE. From the date hereof through the
Construction Period Termination Date, the Owner Trustee shall pay (a) to the
Agent, for the pro rata benefit of the Lenders of each Category of Loans based
on the Commitment Percentage of each such Lender during the period for which
payment is made, the Unused Fee; and (b) to the Lessor, for the pro rata benefit
of the Holders based on the Holder Commitment of each such Holder during the
period for which payment is made, the Holder Unused Fee; PROVIDED that such
amounts under clauses (a) and (b) shall be paid by the Owner Trustee (i) to the
extent, but only to the extent, amounts are available therefor under the
Available Commitments and Available Holder Commitments and (ii) unless each
Lender and each Holder has declined in writing to fund such amount.
Notwithstanding any other provision in any other Operative Agreement to the
contrary, all amounts so advanced shall be deemed added to the Property Cost of
all the Properties (ratably with respect to each Property, based on the ratio of
the Property Cost for such Property individually to the aggregate Property Cost
of all Properties at such time). Such payments of fees provided for in this
SECTION 9.3 shall be due in arrears on each Unused Fee Payment Date.
Notwithstanding the foregoing, so long as any Lender or Holder fails (in
violation of the Operative Agreements) to make available any portion of its
Commitment or Holder Commitment when requested, such Person shall not be
entitled to receive payment of its pro rata share of its Unused Fee or Holder
Unused Fee (as the case may be) until such Person shall make available such
portion. Each such fee shall be calculated on the basis of a year of 360 days
for the actual number of days elapsed. If all or a portion of any Unused Fee or
Holder Unused Fee shall not be paid when due, such overdue amount shall bear
interest, payable by the Lessee on demand, at a rate per annum equal to the Base
Rate plus 2%, from the date of such non-payment until such amount is paid in
full (as well after as before judgment).
SECTION 10. OTHER COVENANTS AND AGREEMENTS.
10.1. COOPERATION WITH THE CONSTRUCTION AGENT OR THE LESSEE. The
Holders, the Owner Trustee (at the direction of the Holders) and the Agent
shall, to the extent reasonably requested by the Construction Agent or Lessee
(but without assuming additional liabilities on account thereof), at the
Construction Agent's or the Lessee's expense, cooperate with the Construction
Agent or the Lessee in connection with its covenants contained herein including,
without limitation, at any time and from time to time, upon the request of the
Construction Agent or the Lessee, promptly and duly executing and delivering any
and all such further instruments, documents and financing statements (and
continuation statements related thereto) as the Construction Agent or the Lessee
may reasonably request in order to perform such covenants.
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10.2. COVENANTS OF THE OWNER TRUSTEE AND THE HOLDERS. Each of the Owner
Trustee and the Holders hereby agree that so long as this Agreement is in
effect:
(a) None of the Holders and the Owner Trustee (both in its
trust capacity and in its individual capacity) will create or permit to
exist at any time, and each of the Holders and the Owner Trustee will,
at its own cost and expense, promptly take such action (and notify
Lessee of such action) as may be necessary duly to discharge, or to
cause to be discharged, all Lessor Liens attributable to it on the
Properties; PROVIDED, HOWEVER, that the Holders and the Owner Trustee
shall not be required to discharge any such Lessor Lien while the same
is being contested in good faith by appropriate proceedings diligently
prosecuted so long as (a) such proceedings shall not involve any
material danger of impairment of the Liens of the Security Documents or
of the sale, forfeiture or loss of, any Property or title thereto or
any interest therein or the payment of Rent, and (b) such proceedings
shall not materially interfere with the disposition of any Property or
title thereto or interest therein or the payment of Rent;
(b) Without prejudice to any right of the Owner Trustee under
the Trust Agreement to resign (subject to requirement set forth in the
Trust Agreement that such resignation shall not be effective until a
successor shall have agreed to accept such appointment), or the
Holders' rights under the Trust Agreement to remove the institution
acting as Owner Trustee (after consent to such removal by the Agent as
provided in the Trust Agreement), each of the Holders and the Owner
Trustee hereby agrees with the Lessee and the Agent (i) not to
terminate or revoke the trust created by the Trust Agreement except as
permitted by ARTICLE VIII of the Trust Agreement, (ii) not to amend,
supplement, terminate or revoke or otherwise modify any provision of
the Trust Agreement in such a manner as to adversely affect the rights
of the Lessee or the Agent without the prior written consent of such
party and (iii) to comply with all of the terms of the Trust Agreement,
the nonperformance of which would adversely affect any such party;
(c) The Owner Trustee or any successor may resign or be
removed by the Holders as Owner Trustee, a successor Owner Trustee may
be appointed and a corporation may become the Owner Trustee under the
Trust Agreement, only in accordance with the provisions of ARTICLE IX
of the Trust Agreement and, with respect to such appointment, with the
consent of the Lessee, which consent shall not be unreasonably
withheld, conditioned or delayed;
(d) The Owner Trustee, in its capacity as Owner Trustee under
the Trust Agreement, and not in its individual capacity, shall not
contract for, create, incur or assume any indebtedness, or enter into
any business or other activity, other than pursuant to or under the
Operative Agreements;
(e) The Holders will not instruct the Owner Trustee to take
any action in violation of the terms of any Operative Agreement;
(f) Neither any Holder nor the Owner Trustee shall (i)
commence any case, proceeding or other action with respect to the Owner
Trustee under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency,
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reorganization, arrangement, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (ii)
seek appointment of a receiver, trustee, custodian or other similar
official with respect to the Owner Trustee or for all or any
substantial benefit of the creditors of the Owner Trustee; and neither
any Holder nor the Owner Trustee shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any
of the acts set forth in this paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee
and the Agent if the Owner Trustee's chief place of business or chief
executive office, or the office where the records concerning the
accounts or contract rights relating to a Property are kept, shall
cease to be located at 79 South Main Street, Salt Lake City, Utah
84111, or if it shall change its name;
(h) Provided that no Lease Event of Default has occurred and
is continuing, neither the Owner Trustee nor any Holder shall, without
the prior written consent of the Lessee, consent to or permit any
amendment, supplement or other modification of the terms and provisions
of the Credit Agreement or the Notes or (to the extent such amendment,
supplement or modification would have an adverse effect on the rights
or obligations of the Lessee under the Lease) any other Operative
Agreement;
(i) Neither the Owner Trustee nor any Holder shall consent to
or permit any amendment, supplement or other modification of the terms
and provisions of any Operative Agreement, in each case without the
prior written consent of the Agent except as described in SECTION 10.5
of this Agreement;
(j) The Owner Trustee (i) shall take such actions and shall
refrain from taking such actions with respect to the Operative
Agreements or the Properties and shall grant such approvals and
otherwise act or refrain from acting with respect to the Operative
Agreements or the Properties in each case as directed in writing by the
Agent or, to the extent required by SECTION 10.5 hereof, the Lessee,
notwithstanding any contrary instruction or absence of instruction by
any Holder or Holders; and (ii) shall not take any action, grant any
approvals or otherwise act under or with respect to the Operative
Agreements or any matters relating to the Properties without first
obtaining the prior written consent of the Agent (and without regard to
any contrary instruction or absence of instruction by any Holder);
PROVIDED, HOWEVER, that notwithstanding the foregoing provisions of
this subparagraph (j) the Owner Trustee, the Agent and the Holders each
acknowledge, covenant and agree that, with respect to all matters under
the Operative Agreements that require the consent or concurrence of all
of the Lenders pursuant to the terms of SECTION 9.1 of the Credit
Agreement (the "Unanimous Vote Matters"), neither the Owner Trustee nor
the Agent shall act or refrain from acting with respect to any
Unanimous Vote Matter until such party has received the approval of
each Lender and each Holder with respect thereto;
(k) Except as otherwise contemplated by the Operative
Agreements, neither the Owner Trustee nor any Holder shall use the
proceeds of any Loan or Holder Funding for any purpose other than the
payment of Transaction Expenses and the fees, expenses and other
disbursements referenced in SECTIONS 9.1(A) and (B) of this Agreement,
the
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purchase or lease of Properties, the acquisition of Equipment, the
construction of Improvements and the payment of interest regarding the
Loans and the payment of the Holder Yield regarding the Holder
Fundings, in each case accrued under the Credit Agreement or Trust
Agreement, as the case may be, during the period prior to the
Completion Date with respect to a particular Property; and
(l) during the period prior to the Completion Date for the
initial Property, the Lessee shall cause the Lessor to pay (when and as
due) any fees pursuant to the Fee Letter (a) to the extent, but only to
the extent, amounts are available therefor under the Available
Commitments and Available Holder Commitments and (b) unless each Lender
and each Holder has declined in writing to fund such amount; and
(m) following the Completion Date for the initial Property,
the Lessee shall pay (when and as due) any fees pursuant to the Fee
Letter.
10.3. LESSEE COVENANTS, CONSENT AND ACKNOWLEDGMENT; CONSTRUCTION AGENT
COVENANTS.
(a) Lessee acknowledges and agrees that the Owner Trustee,
pursuant to the terms and conditions of the Security Agreement and the
Mortgage Instruments, shall create Liens respecting the various
personal property, fixtures and real property described therein in
favor of the Agent. Lessee hereby irrevocably consents to the creation,
perfection and maintenance of such Liens.
(b) Lessor hereby instructs Lessee, and Lessee hereby
acknowledges and agrees, that until such time as the Loans are paid in
full and the Liens evidenced by the Security Agreement and the Mortgage
Instruments have been released, (i) any and all Rent and any and all
other amounts of any kind or type under any of the Operative Agreements
due and owing or payable to the Lessor or the Owner Trustee shall
instead be paid directly to the Agent or as the Agent may direct from
time to time and (ii) Lessee shall cause all notices, certificates,
financial statements, communications and other information which is
delivered, or is required to be delivered, to the Lessor, the Owner
Trustee or any Holder also to be delivered at the same time to the
Agent.
(c) Lessee shall not consent to or permit any amendment,
supplement or other modification of the terms or provisions of any
Operative Agreement without, in each case, obtaining the prior written
consent of the Agent and, to the extent required by the proviso at the
end of SECTION 10.2(J) hereof, each of the Holders.
(d) Except as otherwise contemplated by the Operative
Agreements, the Construction Agent shall not use the proceeds of any
Holder Funding or Loan for any purpose other than the payment of
Transaction Expenses and the fees, expenses and other disbursements
referenced in Section 9.1(A) and (B) of this Agreement, the purchase or
lease of Properties, the acquisition of Equipment, the construction of
Improvements, the payment of interest regarding the Loans and the
payment of the Holder Yield regarding the Holder Fundings, in each case
accrued under the Credit Agreement or Trust Agreement, as the case may
be, during the period prior to the Basic Rent Commencement Date with
respect to a particular Property.
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(e) The Construction Agent and the Lessee shall ensure that,
at all times, all of the Equipment consists of Fixtures or other goods
incorporated into a Property that are customarily considered to be part
of a building or structure erected on real property (such as heating,
ventilating, air-conditioning, electrical and mechanical equipment or
systems, escalators, elevators, wall and floor coverings, plumbing,
pumps, tanks, conduits, wiring, lighting, security systems, sprinklers
and other fire prevention and extinguishing apparatus).
(f) Neither the Lessee nor the Construction Agent shall create
or permit to exist at any time (and each of the Lessee and the
Construction Agent shall, at its own expense, take such action as may
be necessary to duly discharge, or cause to be discharged) any Lien
against any Property other than Permitted Liens.
(g) The Lessee and the Construction Agent agree that the
aggregate Property Cost of each Property shall at all times be less
than or equal to 106% of the appraised value of such Property as shown
in the most recent Appraisal of such Property received by the Agent
pursuant to SECTION 5.3(B) or otherwise.
(h) The Lessee and the Construction Agent agree that they
shall, so long as any commitment or Holder Commitment exists, or any
obligation remains unpaid, maintain the Letter of Credit, in form and
substance satisfactory to the Agent, securing the L/C Obligations
(defined below) of the Lessee and the Construction Agent up to an
amount equal to the greatest of (i) $7,995,200, (ii) 20% of the
aggregate of the Commitments and Holder Commitments (from time to
time), or (iii) 20% of the aggregate Property Cost (from time to time)
of all of the Properties, SUBJECT however to reduction in accordance
with SECTION 5.6. "L/C Obligations" means collectively, (i) any
obligations of the Lessee or the Construction Agent under the Guaranty
Agreement, (ii) any payment identified as a payment pursuant to SECTION
22.1(B) of the Lease (or otherwise) of the Maximum Residual Guaranty
Amount (or any such lesser amount as may be required pursuant to such
Section) in respect of the Properties, and (iii) upon and during the
continuation of an Event of Default, any obligations of the Lessee or
the Construction Agent under any Operative Agreement.
(i) The Lessee agrees to perform each of the Incorporated
Covenants and any other covenants set forth in (or incorporated by
reference into) Article XXVIII of the Lease, in accordance with their
respective terms.
(j) The Lessee and the Construction Agent shall take all
reasonable and necessary steps to identify any wetlands, tidelands or
swamp and overflow lands on any Property prior to development of, or
construction of any Improvements on, such Property, and each Property
will be developed in a manner consistent with all applicable wetlands
regulations.
(k) The Lessee and the Construction Agent give immediate
notice to the Agent and the Owner Trustee in the event that any
condition arising from or affecting any Property or arising from or
affecting any lands nearby or adjacent to any Property has or
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threatens to have a significant adverse effect upon human health or the
environment at such Property or upon the use or value of such Property.
10.4. SHARING OF CERTAIN PAYMENTS. The parties hereto acknowledge and
agree that all payments due and owing by the Lessee to the Lessor under the
Lease or any of the other Operative Agreements shall be made by the Lessee
directly to the Agent as more particularly provided in SECTION 10.3 hereof. The
Holders and the Agent, on behalf of the Lenders, acknowledge the terms of
SECTION 8 of the Credit Agreement regarding the allocation of payments and other
amounts made or received from time to time under the Operative Agreements and
agree all such payments and amounts are to be allocated as provided in SECTION 8
of the Credit Agreement. In connection therewith the Holders hereby (a) appoint
the Agent to act as collateral agent for the Holders in connection with the Lien
granted by the Mortgage Instruments to secure the Holder Amount and (b)
acknowledge and agree and direct that the rights and remedies of the
beneficiaries of the Lien of the Mortgage Instruments shall be exercised by the
Agent on behalf of the Lenders and the Holders as directed from time to time by
the Lenders without notice to or consent from the Holders.
10.5. GRANT OF EASEMENTS, VOTING AT MEETINGS, ETC. The Agent and the
Holders hereby agree that, so long as no Event of Default shall have occurred
and be continuing, and until such time as the Agent gives instructions to the
contrary to the Owner Trustee, the Owner Trustee shall, from time to time at the
request of the Lessee, in connection with the transactions contemplated by the
Agency Agreement, the Lease or the other Operative Agreements, (i) grant
easements and other rights in the nature of easements with respect to any
Property, (ii) release existing easements or other rights in the nature of
easements which are for the benefit of any Property, (iii) execute and deliver
to any Person any instrument appropriate to confirm or effect such grants or
releases, and (iv) execute and deliver to any Person such other documents or
materials in connection with the acquisition, development or operation of any
Property, including, without limitation, reciprocal easement agreements,
operating agreements, development agreements, plats, replats or subdivision
documents; provided, that each of the agreements and documents referred to in
this SECTION 10.5 shall be of the type normally executed by the Lessee in the
ordinary course of the Lessee's business and shall be on commercially reasonable
terms so as not to diminish the value of any Property in any material respect.
SECTION 11. CREDIT AGREEMENT AND TRUST AGREEMENT.
11.1. CONSTRUCTION AGENT'S AND LESSEE'S CREDIT AGREEMENT RIGHTS.
Notwithstanding anything to the contrary contained in the Credit Agreement, the
Agent, the Construction Agent, the Lessee and the Owner Trustee hereby agree
that, prior to the occurrence and continuation of any Lease Default or Lease
Event of Default, the Construction Agent and the Lessee (as designated below)
shall have the following rights:
(a) the Construction Agent shall have the right and obligation
(as more specifically provided in SECTION 5.7 hereof) to designate the
portion of the Loans on which interest is due and payable for purposes
of the definition of "Allocated Interest";
(b) the Construction Agent shall have the right to give the
notice referred to in SECTION 2.3 of the Credit Agreement, to designate
the account to which a borrowing under
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the Credit Agreement is to be credited pursuant to SECTION 2.3 of the
Credit Agreement and to provide the Allocation Notice;
(c) the Lessee shall have the right to terminate or reduce the
Commitments pursuant to SECTION 2.5(A) of the Credit Agreement;
(d) the Lessee shall have the right to exercise the conversion
and continuation options pursuant to SECTION 2.7 of the Credit
Agreement;
(e) the Lessee shall have the right to approve any successor
agent pursuant to SECTION 7.9 of the Credit Agreement;
(f) the Lessee shall have the right to consent to any
assignment by a Lender to which the Lessor has the right to consent
pursuant to SECTION 9.8 of the Credit Agreement; and
(g) without limiting the foregoing clauses (a) through (f),
and in addition thereto, the Lessee shall have the right to exercise
any other right of the Owner Trustee under the Credit Agreement upon
not less than five (5) Business Days' prior written notice from the
Lessee to the Owner Trustee and the Agent.
11.2. CONSTRUCTION AGENT'S AND LESSEE'S TRUST AGREEMENT RIGHTS.
Notwithstanding anything to the contrary contained in the Trust Agreement, the
Construction Agent, the Lessee, the Owner Trustee and the Holders hereby agree
that, prior to the occurrence and continuation of any Lease Default or Lease
Event of Default, the Construction Agent and the Lessee (as designated below)
shall have the following rights:
(a) the Construction Agent shall have the right and the
obligation (as more specifically provided in SECTION 5.7 hereof) to
designate the portion of the Holder Fundings on which Holder Yield is
due and payable for purposes of the definition of Allocated Return in
this Agreement;
(b) the Lessee shall have the right to exercise the conversion
and continuation options pursuant to SECTION 3.8 of the Trust
Agreement;
(c) no removal of the Owner Trustee or appointment of a
successor Owner Trustee pursuant to SECTION 9.1 of the Trust Agreement
shall be made without the prior written consent (not to be unreasonably
withheld or delayed) of the Lessee; and
(d) the Holders and the Owner Trustee shall not amend,
supplement or otherwise modify any provision of the Trust Agreement in
such a manner as to adversely affect the rights of the Lessee without
the prior written consent (not to be unreasonably withheld or delayed)
of the Lessee.
SECTION 12. TRANSFER OF INTEREST.
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12.1. RESTRICTIONS ON TRANSFER. The Holders may, directly or
indirectly, assign, convey or otherwise transfer any of their right, title or
interest in or to the Trust Estate or the Trust Agreement with the prior written
consent of the Agent, and (provided no Default or Event of Default has occurred
and is continuing) the Lessee, and (only if such proposed assignee is not a
Lender) the Majority Lenders (which consent in each case shall not be
unreasonably withheld or delayed), PROVIDED that such consents shall not be
required for an assignment to a Lender or an Affiliate of a Lender. The Owner
Trustee may, subject to the Lien of the applicable Security Documents, but only
with the prior written consent of the Agent, the Holders (which consent may be
withheld by the Agent or the Holders in their sole discretion) and (provided no
Default or Event of Default has occurred and is continuing) the Lessee, directly
or indirectly, assign, convey, appoint an agent with respect to enforcement of,
or otherwise transfer any of the Owner Trustee's right, title or interest in or
to any Property, the Lease, the Trust Agreement, this Agreement (including,
without limitation, any right to indemnification thereunder), or any other
document relating to a Property or any interest in a Property as provided in the
Trust Agreement and the Lease. The provisions of the immediately preceding
sentence shall not apply to the obligations of the Owner Trustee to transfer
Property to the Lessee or a third party purchaser pursuant to ARTICLE XXII of
the Lease upon payment for such Property in accordance with each of the terms
and conditions of the Lease.
12.2. EFFECT OF TRANSFER. From and after any transfer effected in
accordance with this SECTION 12, the transferor shall be released, to the extent
of such transfer, from its liability hereunder and under the other documents to
which it is a party in respect of obligations to be performed on or after the
date of such transfer; provided, however, that any transferor Holder shall
remain liable under ARTICLE XI of the Trust Agreement to the extent that the
transferee Holder shall not have assumed the obligations of the transferor
Holder thereunder. Upon any transfer by the Owner Trustee or a Holder as above
provided, any such transferee shall assume the obligations of the Owner Trustee
and Lessor or the obligations of a Holder, as the case may be, and shall be
deemed an "Owner Trustee", "Lessor" or "Holder", as the case may be, for all
purposes of such documents and each reference herein to the transferor shall
thereafter be deemed a reference to such transferee for all purposes, except as
provided in the preceding sentence. Notwithstanding any transfer of all or a
portion of the transferor's interest as provided in this SECTION 12, the
transferor shall be entitled to all benefits accrued and all rights vested prior
to such transfer including, without limitation, rights to indemnification under
any such document.
SECTION 13. INDEMNIFICATION.
13.1. GENERAL INDEMNITY. Subject to the provisions of SECTIONS 13.4 AND
13.5, and whether or not any of the transactions contemplated hereby shall be
consummated, the Indemnity Provider hereby assumes liability for and agrees to
defend, indemnify and hold harmless each Indemnified Person on an After Tax
Basis from and against any Claims which may be imposed on, incurred by or
asserted against an Indemnified Person by any other Person (but not to the
extent such Claims arise from the gross negligence or willful misconduct of such
Indemnified Person) in any way relating to or arising, or alleged (by any Person
asserting such a Claim against an Indemnified Person) to arise, out of the
execution, delivery, performance or enforcement of this Agreement, the Lease,
any other Operative Agreement or on or with respect to any Property or any part
thereof, including, without limitation, Claims in any way relating to or arising
or alleged to arise out of (a) the financing, refinancing, purchase, acceptance,
rejection, ownership, design,
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construction, refurbishment, development, delivery, acceptance, nondelivery,
leasing, subleasing, possession, use, operation, maintenance, repair,
modification, transportation, condition, sale, return, repossession (whether by
summary proceedings or otherwise), or any other disposition of a Property, or
any part thereof, including the acquisition, holding or disposition of any
interest in any Property, lease or agreement comprising a portion of any
thereof; (b) any latent or other defect in any property whether or not
discoverable by an Indemnified Person or the Indemnity Provider; (c) any
Environmental Claim, any violation of Environmental Laws, or any other loss of
or damage to any property or the environment relating to any Property, the
Lease, the Agency Agreement or the Indemnity Provider; (d) the Operative
Agreements, or any transaction contemplated thereby; (e) any breach by the
Construction Agent or the Lessee of any of its representations or warranties
under the Operative Agreements to which it is a party or failure by the
Construction Agent or the Lessee to perform or observe any covenant or agreement
to be performed by it under any of the Operative Agreements; (f) the
transactions contemplated hereby or by any other Operative Agreement, in respect
of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA; (g) any
personal injury, death or property damage, including without limitation Claims
based on strict or absolute liability in tort; (h) any easement, right,
agreement or document referred to in SECTION 10.5 of this Agreement; or (i) any
Lien on any Property (other than Liens created by the Operative Agreements).
If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including a
written notice of such proceeding) for any Claim, such Indemnified Person shall
promptly notify the Indemnity Provider in writing and shall not take action with
respect to such Claim without the consent of the Indemnity Provider for thirty
(30) days after the receipt of such notice by the Indemnity Provider; PROVIDED,
HOWEVER, that, in the case of any such Claim, if action shall be required by law
or regulation to be taken prior to the end of such 30-day period, such
Indemnified Person shall endeavor, in such notice to the Indemnity Provider, to
inform the Indemnity Provider of such shorter period, and no action shall be
taken with respect to such Claim without the consent of the Indemnity Provider
before seven (7) days before the end of such shorter period; PROVIDED, FURTHER,
that the failure of such Indemnified Person to give the notices referred to in
this sentence shall not diminish the Indemnity Provider's obligation hereunder
except to the extent such failure materially precludes the Indemnity Provider
from contesting such Claim.
If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Indemnity Provider is required by law or regulation for the
Indemnified Person to respond to such Claim), the Indemnity Provider shall
request in writing that such Indemnified Person respond to such Claim, the
Indemnified Person shall, at the expense of the Indemnity Provider, in good
faith conduct and control such action (including, without limitation by pursuit
of appeals) (provided, however, that (A) if such Claim can be pursued by the
Indemnity Provider on behalf of or in the name of such Indemnified Person, the
Indemnified Person, at the Indemnity Provider's request, shall allow the
Indemnity Provider to conduct and control the response to such Claim and (B) in
the case of any Claim, the Indemnified Person may request the Indemnity Provider
to conduct and control the response to such Claim (with counsel to be selected
by the Indemnity Provider and consented to by such Indemnified Person, such
consent not to be unreasonably withheld, conditioned or delayed; provided,
however, that any Indemnified Person may retain separate counsel at the expense
of the Indemnity Provider in the event of a conflict)) by, in the sole
discretion of the Person conducting and
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controlling the response to such Claim, (1) resisting payment thereof, (2) not
paying the same except under protest, if protest is necessary and proper, (3) if
the payment be made, using reasonable efforts to obtain a refund thereof in
appropriate administrative and judicial proceedings, or (4) taking such other
action as is reasonably requested by the Indemnity Provider from time to time.
The party controlling the response to any Claim shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; PROVIDED,
that all decisions ultimately shall be made in the discretion of the controlling
party, except that the Indemnity Provider may not agree to any dismissal or
settlement of, or other agreement in connection with, any claim without the
prior written consent of such Indemnified Person, if such dismissal, settlement
or agreement would require any admission or acknowledgment of any culpability or
wrongdoing by such Indemnified Person or provide for any nonmonetary relief to
be performed by such Indemnified Person. The parties agree that an Indemnified
Person may at any time decline to take further action with respect to the
response to such Claim and may settle such Claim if such Indemnified Person
shall waive its rights to any indemnity from the Indemnity Provider that
otherwise would be payable in respect of such Claim (and any future Claim, the
pursuit of which is precluded by reason of such resolution of such Claim) and
shall pay to the Indemnity Provider any amount previously paid or advanced by
the Indemnity Provider pursuant to this SECTION 13.1 by way of indemnification
or advance for the payment of any amount regarding such Claim other than
expenses of the action relating to such Claim.
Notwithstanding the foregoing provisions of this SECTION 13.1, an
Indemnified Person shall not be required to take any action and no Indemnity
Provider shall be permitted to respond to any Claim in its own name or that of
the Indemnified Person unless (A) the Indemnity Provider shall have agreed to
pay and shall pay to such Indemnified Person on demand and on an After Tax Basis
all reasonable costs, losses and expenses that such Indemnified Person actually
incurs in connection with such Claim, including, without limitation, all
reasonable legal, accounting and investigatory fees and disbursements, (B) the
Indemnified Person shall have reasonably determined that the action to be taken
will not result in any material danger of sale, forfeiture or loss of any
Property, or any part thereof or interest therein, will not interfere with the
payment of Rent, and will not result in risk of criminal liability, (C) if such
Claim shall involve the payment of any amount prior to the resolution of such
Claim, the Indemnity Provider shall provide to the Indemnified Person an
interest-free advance in an amount equal to the amount that the Indemnified
Person is required to pay (with no additional net after-tax cost to such
Indemnified Person), (D) in the case of a Claim that must be pursued in the name
of an Indemnified Person (or an Affiliate thereof), the Indemnity Provider shall
have provided to such Indemnified Person an opinion of independent counsel
selected by the Indemnified Person and reasonably satisfactory to the Indemnity
Provider stating that a reasonable basis exists to contest such Claim, (E) such
claim is covered by insurance and (F) no Event of Default shall have occurred
and be continuing. In addition, an Indemnified Person shall not be required to
contest any Claim in its name (or that of an Affiliate) if the subject matter
thereof shall be of a continuing nature and shall have previously been decided
adversely by a court of competent jurisdiction pursuant to the contest
provisions of this SECTION 13.1, unless there shall have been a change in law
(or interpretation thereof) and the Indemnified Person shall have received, at
the Indemnity Provider's expense, an opinion of independent counsel selected by
the Indemnified Person and reasonably acceptable to the
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Indemnity Provider stating that as a result of such change in law (or
interpretation thereof), it is more likely than not that the Indemnified Person
will prevail in such contest.
13.2. GENERAL TAX INDEMNITY.
(a) Subject to the provisions of SECTIONS 13.4 AND 13.5, and
the Indemnity Provider shall pay and assume liability for, and does
hereby agree to indemnify, protect and defend each Property and all
Indemnified Persons, and hold them harmless against, all Impositions on
an After Tax Basis.
(b) (i) Subject to the terms of SECTION 13.2(F), the Indemnity
Provider shall pay or cause to be paid all Impositions
directly to the taxing authorities where feasible and
otherwise to the Indemnified Person, as appropriate, and the
Indemnity Provider shall at its own expense, upon such
Indemnified Person's reasonable request, furnish to such
Indemnified Person copies of official receipts or other
satisfactory proof evidencing such payment.
(ii) In the case of Impositions for which no contest
is conducted pursuant to SECTION 13.2(F) and which the
Indemnity Provider pays directly to the taxing authorities,
the Indemnity Provider shall pay such Impositions prior to the
latest time permitted by the relevant taxing authority for
timely payment. In the case of Impositions for which the
Indemnity Provider reimburses an Indemnified Person, the
Indemnity Provider shall do so within thirty (30) days after
receipt by the Indemnity Provider of demand by such
Indemnified Person describing in reasonable detail the nature
of the Imposition and the basis for the demand (including the
computation of the amount payable). In the case of Impositions
for which a contest is conducted pursuant to SECTION 13.2(F),
the Indemnity Provider shall pay such Impositions or reimburse
such Indemnified Person for such Impositions, to the extent
not previously paid or reimbursed pursuant to subsection (a),
prior to the latest time permitted by the relevant taxing
authority for timely payment after conclusion of all contests
under SECTION 13.2(F).
(iii) Impositions imposed with respect to a Property
for a billing period during which the Lease expires or
terminates with respect to such Property (unless the Lessee
has exercised the Purchase Option with respect to such
Property or the Lessee has otherwise purchased such Property)
shall be adjusted and prorated on a daily basis between the
Indemnity Provider and the Lessor, whether or not such
Imposition is imposed before or after such expiration or
termination and each party shall pay its pro rata share
thereof.
(iv) At the Indemnity Provider's request, the amount
of any indemnification payment by the Indemnity Provider
pursuant to subsection (a) shall be verified and certified by
an independent public accounting firm mutually acceptable to
the Indemnity Provider and the Indemnified Person. The fees
and expenses of such independent public accounting firm shall
be paid by the Indemnity Provider unless such verification
shall result in an adjustment in the Indemnity
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Provider's favor of 15% or more of the payment as computed by
the Indemnified Person, in which case such fee shall be paid
by the Indemnified Person.
(v) The Indemnified Persons shall use good faith
efforts to take lawful deductions in their respective tax
returns so as to reduce the Impositions required to be
reimbursed by the Indemnity Provider hereunder; PROVIDED,
HOWEVER, that the failure of any Indemnified Person to take
any deduction shall not impair in any way such Person's right
to indemnification from the Indemnity Provider for any
Impositions.
(c) (i) The Indemnity Provider shall be responsible for
preparing and filing any real and personal property or ad valorem tax
returns with respect to each Property. In case any other report or tax
return shall be required to be made with respect to any obligations of
the Indemnity Provider under or arising out of subsection (a) and of
which the Indemnity Provider has knowledge or should have knowledge,
the Indemnity Provider, at its sole cost and expense, shall notify the
relevant Indemnified Person of such requirement and (except if such
Indemnified Person notifies the Indemnity Provider that such
Indemnified Person intends to file such report or return) (A) to the
extent required or permitted by and consistent with Legal Requirements,
make and file in Indemnity Provider's name such return, statement or
report; and (B) in the case of any other such return, statement or
report required to be made in the name of such Indemnified Person,
advise such Indemnified Person of such fact and prepare such return,
statement or report for filing by such Indemnified Person or, where
such return, statement or report shall be required to reflect items in
addition to any obligations of the Indemnity Provider under or arising
out of subsection (a), provide such Indemnified Person at the Indemnity
Provider's expense with information sufficient to permit such return,
statement or report to be properly made with respect to any obligations
of the Indemnity Provider under or arising out of subsection (a). Such
Indemnified Person shall, upon the Indemnity Provider's request and at
the Indemnity Provider's expense, provide any data maintained by such
Indemnified Person (and not otherwise available to or within the
control of the Indemnity Provider) with respect to any Property which
the Indemnity Provider may reasonably require to prepare any required
tax returns or reports.
(d) If as a result of the payment or reimbursement by the
Indemnity Provider of any Imposition or other reasonable expenses of
the Lessor or the payment of any Transaction Expenses incurred in
connection with the transactions contemplated by the Operative
Agreements, the Lessor, the Holders or partners of any Holder shall
suffer a net increase in any federal, state or local income tax
liability, the Indemnity Provider shall indemnify such Persons (without
duplication of any indemnification required by subsection (a)) on an
After Tax Basis for the amount of such increase. The calculation of any
such net increase shall take into account any current or future tax
savings (including tax deductions, net operating loss carry-forward or
tax credits) realized or reasonably expected to be realized by such
Person in respect thereof, as well as any interest, penalties and
additions to tax payable by such Lessor, or such Holder, or such
Affiliate, in respect thereof.
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(e) As between the Indemnity Provider on one hand, and the
Lessor or the Agent, any Lender or any Holder on the other hand, the
Indemnity Provider shall be responsible for, and the Indemnity Provider
shall indemnify and hold harmless the Lessor, the Agent, the Lenders
and each Holder (without duplication of any indemnification required by
subsection (a)) on an After Tax Basis against, any obligation for
United States or foreign withholding taxes imposed in respect of
payments on the Notes or Certificates or with respect to Rent payments
under the Lease (and, if the Lessor, the Agent, any Lender or any
Holder receives a demand for such payment from any taxing authority,
the Indemnity Provider shall discharge such demand on behalf of the
Lessor, the Agent, such Lender or such Holder); provided, however, that
the right of any Lender to make a claim for indemnification under this
SECTION 13.2(E) is subject to the compliance by such Lender with the
requirements of SECTION 2.13 of the Credit Agreement.
(f) (i) If a written Claim is made against any Indemnified
Person, or if any proceeding shall be commenced
against such Indemnified Person (including a written
notice of such proceeding), for any Impositions, such
Indemnified Person shall promptly notify the
Indemnity Provider in writing and shall not take
action with respect to such Claim or proceeding
without the consent of the Indemnity Provider for
thirty (30) days after the receipt of such notice by
the Indemnity Provider; PROVIDED, HOWEVER, that, in
the case of any such Claim or proceeding, if action
shall be required by law or regulation to be taken
prior to the end of such 30-day period, such
Indemnified Person shall, in such notice to the
Indemnity Provider, inform the Indemnity Provider of
such shorter period, and no action shall be taken
with respect to such Claim or proceeding without the
consent of the Indemnity Provider before seven (7)
days before the end of such shorter period; PROVIDED,
FURTHER, that the failure of such Indemnified Person
to give the notices referred to this sentence shall
not diminish the Indemnity Provider's obligation
hereunder except to the extent such failure precludes
the Indemnity Provider from contesting such Claim.
(ii) If, within thirty (30) days of receipt of such notice
from the Indemnified Person (or such shorter period
as the Indemnified Person has notified the Indemnity
Provider is required by law or regulation for the
Indemnified Person to commence such contest), the
Indemnity Provider shall request in writing that such
Indemnified Person contest such Imposition, the
Indemnified Person shall, at the expense of the
Indemnity Provider, in good faith conduct and control
such contest (including, without limitation, by
pursuit of appeals) relating to the validity,
applicability or amount of such Imposition (provided,
however, that (A) if such contest can be pursued
independently from any other proceeding involving a
tax liability of such Indemnified Person, the
Indemnified Person, at the Indemnity Provider's
request, shall allow the Indemnity Provider to
conduct and control such contest and (B) in the case
of any contest, the Indemnified Person may request
the Indemnity Provider to conduct and control such
contest (with counsel to be selected by the Indemnity
Provider and consented to by such Indemnified Person,
such consent not to be unreasonably withheld,
conditioned or delayed; provided, however, that any
Indemnified Person may retain separate counsel at the
expense of the Indemnity Provider in the event of a
conflict)) by, in the sole discretion of
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the Person conducting and controlling such contest, (1)
resisting payment thereof, (2) not paying the same except
under protest, if protest is necessary and proper, (3) if the
payment be made, using reasonable efforts to obtain a refund
thereof in appropriate administrative and judicial
proceedings, or (4) taking such other action as is reasonably
requested by the Indemnity Provider from time to time.
(iii) The party controlling any contest shall consult
in good faith with the non-controlling party and shall keep
the non-controlling party reasonably informed as to the
conduct of such contest; PROVIDED, that all decisions
ultimately shall be made in the sole discretion of the
controlling party, except that the Indemnity Provider may not
agree to any dismissal or settlement of, or other agreement in
connection with, any claim without the prior written consent
of such Indemnified Person, if such dismissal, settlement or
agreement would require any admission or acknowledgment of any
culpability or wrongdoing by such Indemnified Person or
provide for any nonmonetary relief to be performed by such
Indemnified Person. The parties agree that an Indemnified
Person may at any time decline to take further action with
respect to the contest of any Imposition and may settle such
contest if such Indemnified Person shall waive its rights to
any indemnity from the Indemnity Provider that otherwise would
be payable in respect of such Imposition (and any future Claim
by any taxing authority, the contest of which is precluded by
reason of such resolution of such contest) and shall pay to
the Indemnity Provider any amount previously paid or advanced
by the Indemnity Provider pursuant to this SECTION 13.2 by way
of indemnification or advance for the payment of any amount
regarding such Imposition other than expenses of such contest.
(iv) Notwithstanding the foregoing provisions of this
SECTION 13.2, an Indemnified Person shall not be required to
take any action and no Indemnity Provider shall be permitted
to contest any Imposition in its own name or that of the
Indemnified Person unless (A) the Indemnity Provider shall
have agreed to pay and shall pay to such Indemnified Person on
demand and on an After Tax Basis all reasonable costs, losses
and expenses that such Indemnified Person actually incurs in
connection with contesting such Imposition, including, without
limitation, all reasonable legal, accounting and investigatory
fees and disbursements, (B) the Indemnified Person shall have
reasonably determined that the action to be taken will not
result in any material danger of sale, forfeiture or loss of
any Property, or any part thereof or interest therein, will
not interfere with the payment of Rent, and will not result in
risk of criminal liability, (C) if such contest shall involve
the payment of the Imposition prior to or during the contest,
the Indemnity Provider shall provide to the Indemnified Person
an interest-free advance in an amount equal to the Imposition
that the Indemnified Person is required to pay (with no
additional net after-tax cost to such Indemnified Person), (D)
in the case of a Claim that must be pursued in the name of an
Indemnified Person (or an Affiliate thereof), the Indemnity
Provider shall have provided to such Indemnified Person an
opinion of independent tax counsel selected by the Indemnified
Person and reasonably satisfactory to the Indemnity Provider
stating that a reasonable basis exists to contest such Claim,
and (E) no Event of Default shall have occurred and
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be continuing. In addition, an Indemnified Person shall not be
required to contest any claim in its name (or that of an
Affiliate) if the subject matter thereof shall be of a
continuing nature and shall have previously been decided
adversely by a court of competent jurisdiction pursuant to the
contest provisions of this SECTION 13.2, unless there shall
have been a change in law (or interpretation thereof) and the
Indemnified Person shall have received, at the Indemnity
Provider's expense, an opinion of independent tax counsel
selected by the Indemnified Person and reasonably acceptable
to the Indemnity Provider stating that as a result of such
change in law (or interpretation thereof), it is more likely
than not that the Indemnified Person will prevail in such
contest.
13.3. ENVIRONMENTAL INDEMNITY. Without limiting the generality of the
foregoing, whether or not the transactions contemplated hereby shall be
consummated, the Indemnity Provider hereby assumes liability for and agrees to
defend, indemnify and hold harmless each Indemnified Person on an After Tax
Basis from and against any Claims which may be imposed on, incurred by or
asserted against an Indemnified Person by any other Person (but not to the
extent such Claims arise from the gross negligence or willful misconduct of such
Indemnified Person) in any way relating to or arising, or alleged (by any Person
asserting such a Claim against an Indemnified Person) to arise, out of any
Environmental Claim, any violation of Environmental Laws, or any other loss of
or damage to any Property or the environment (including without limitation the
presence on any Property of wetlands, tidelands or swamp or overflow lands, or
any condition arising from or affecting any Property or arising from or
affecting any lands nearby or adjacent to any Property that has or threatens to
have any adverse effect upon human health or the environment at such Property or
upon the use or value of such Property), in each case relating to any Property,
the Lease, the Agency Agreement or the Indemnity Provider.
13.4. ADDITIONAL PROVISIONS REGARDING INDEMNIFICATION DURING
CONSTRUCTION PERIOD OF A PROPERTY. Notwithstanding the provisions of SECTIONS
13.1, 13.2 AND 13.3, (a) the Owner Trustee shall be the only beneficiary of the
provisions set forth in SECTIONS 13.1, 13.2 AND 13.3, with respect to any
Property during the Construction Period for such Property (except that other
Indemnified Persons may benefit from the Environmental Indemnities to the extent
set forth in clause (c) below); (b) in the case of third-party Claims, the
indemnity benefitting the Owner Trustee referred to in clause (a) above shall be
limited to (i) Claims caused by or resulting from the acts or omissions of the
Indemnity Provider, any contractor or subcontractor of the Indemnity Provider,
or any other Person acting by, through or under the Indemnity Provider or any
such contractor or subcontractor, (ii) Environmental Indemnities, or (iii)
Claims for personal injury or death, property damage, loss or theft, strict
liability, workmen's compensation, and other similar insurable liabilities; and
(c) during the Construction Period of a Property, the indemnity provided with
respect to such Property to Indemnified Persons other than the Owner Trustee
shall be limited to Environmental Indemnities for environmental risks or
conditions that exist on the Property Closing Date for such Property. After the
Construction Period for a Property, each Indemnified Person shall be a
beneficiary of the provisions of SECTIONS 13.1, 13.2 AND 13.3 to the fullest
extent of such provisions.
13.5. INDEMNIFICATION PROVIDED BY THE OWNER TRUSTEE IN FAVOR OF THE
OTHER INDEMNIFIED PERSONS. To the extent the Indemnity Provider is not obligated
to indemnify any Indemnified Person with respect to the various matters
described in this SECTION 13.5, the Owner Trustee shall,
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and does hereby, provide such indemnities in favor of each Indemnified Person
(subject to clauses (a) and (b) below) and shall pay all such amounts owed
pursuant to this SECTION 13.5 with amounts advanced by the Lenders and the
Holders (a) to the extent, but only to the extent, amounts are available
therefor under the Available Commitments and Available Holder Commitments and
(b) unless each Lender and each Holder has declined in writing to fund such
amount. Notwithstanding any other provision in any other Operative Agreement to
the contrary, all amounts so advanced shall be deemed added to the Property Cost
of all the Properties (ratably with respect to each Property, based on the ratio
of the Property Cost for such Property individually to the aggregate Property
Cost of all Properties at such time).
Whether or not any of the transactions contemplated hereby shall be
consummated, the Owner Trustee hereby assumes liability for and agrees to
defend, indemnify and hold harmless each Indemnified Person on an After Tax
Basis from and against any Claims which may be imposed on, incurred by or
asserted against an Indemnified Person by any other Person (but not to the
extent such Claims arise from the gross negligence or willful misconduct of such
Indemnified Person) in any way relating to or arising, or alleged (by any Person
asserting such a Claim against an Indemnified Person) to arise, out of the
execution, delivery, performance or enforcement of this Agreement, the Lease,
any other Operative Agreement or on or with respect to any Property or any part
thereof, including, without limitation, Claims in any way relating to or arising
or alleged to arise out of any of the matters set forth in SECTION 13.1
(including any Claims that would be indemnified by the Indemnity Provider
pursuant to SECTION 13.1 but for the effect of SECTION 13.4).
The Owner Trustee shall pay and assume liability for, and does hereby
agree to indemnify, protect and defend each Property and all Indemnified
Persons, and hold them harmless against, all Impositions on an After Tax Basis
(including any Impositions that would be paid, assumed or indemnified by the
Indemnity Provider pursuant to SECTION 13.2 but for the effect of SECTION 13.4).
THE INDEMNITY OBLIGATIONS UNDERTAKEN BY THE OWNER TRUSTEE PURSUANT TO
THIS SECTION 13.5 ARE IN ALL RESPECTS SUBJECT TO THE LIMITATIONS ON LIABILITY
DESCRIBED IN SECTION 14.11.
SECTION 14. MISCELLANEOUS.
14.1. SURVIVAL OF AGREEMENTS. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Agreements, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Agreement, the transfer of any
Property to the Owner Trustee, the acquisition of any Equipment, the
construction of any Improvements, any disposition of any interest of the Owner
Trustee in any Property or any interest of the Holders in the Owner Trust, the
payment of the Notes and any disposition thereof, and shall be and continue in
effect notwithstanding any investigation made by any party and the fact that any
party may waive compliance with any of the other terms, provisions or conditions
of any of the Operative Agreements. Except as otherwise expressly set forth
herein or in other Operative Agreements, the indemnities of the parties provided
for in the Operative Agreements shall survive the expiration or termination of
any thereof. In furtherance and not in limitation of the foregoing and
notwithstanding the occurrence of any Closing Date or
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the completion of any Funding under this Agreement pursuant to SECTION 5.3 OR
5.5, each condition precedent in connection with any such Closing Date or
Funding which is not fully satisfied may be subsequently required by the Agent
to be satisfied (unless such has been expressly waived in writing by the Agent).
14.2. NO BROKER, ETC. Each of the parties hereto represents to the
others that it has not retained or employed any broker, finder or financial
adviser to act on its behalf in connection with this Agreement, nor has it
authorized any broker, finder or financial adviser retained or employed by any
other Person so to act. Any party who is in breach of this representation shall
indemnify and hold the other parties harmless from and against any liability
arising out of such breach of this representation.
14.3. NOTICES. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States certified or registered mail
(postage prepaid), by nationally recognized courier service, by hand or by
telecopy with confirming notice and any such notice shall become effective upon
receipt and shall be directed to the address of such Person as indicated:
If to the Construction Agent, to it at the following address:
Aviation Sales Company
6905 NW 25th Street
Miami, Florida 33122
Attention: Joseph Civiletto
Chief Financial Officer
Telephone No.: (305)599-6693
Telecopy No.: (305)599-6610
With a copy to:
Akerman, Senterfitt & Eidson, P.A.
SunTrust International Center, 28th Floor
One Southeast Third Avenue
Miami, Florida 33131
Attention: Philip B. Schwartz
Telephone No.: (305) 374-5600
Telecopy No.: (305) 374-5095
provided, however, that the failure to deliver such copy shall not
affect the validity of any notice otherwise delivered in accordance
with this section.
If to the Lessee, to it at the following address:
Aviation Sales Company
6905 NW 25th Street
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Miami, Florida 33122
Attention: Joseph Civiletto
Chief Financial Officer
Telephone No.: (305)599-6693
Telecopy No.: (305)599-6610
If to the Owner Trustee, to it at the following address:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Val T. Orton
Telephone No.: (801) 246-5630
Telecopy No.: (801) 246-5053
If to NationsBank, National Association, as a Holder or a Lender, to it at the
following address:
(i) if by certified or registered mail:
NationsBank, National Association
P.O. Box 407090
Fort Lauderdale, Florida 33340-7090
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
(ii) if by hand-delivery, courier service or telecopy:
NationsBank, National Association
One Financial Plaza
10th Floor
Fort Lauderdale, Florida 33394
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
with all notices of requests for Holder Fundings, or conversion, continuation or
prepayment of any Holder Funding, to be sent to:
NationsBank Agency Services
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Kenneth Deffendall
Telephone No.: (704) 388-6482
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Telecopy No.: (704) 386-9923
If to the Agent, to it at the respective following address:
(i) if by certified or registered mail:
NationsBank, National Association
P.O. Box 407090
Fort Lauderdale, Florida 33340-7090
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
(ii) if by hand-delivery, courier service or telecopy:
NationsBank, National Association
One Financial Plaza
10th Floor
Fort Lauderdale, Florida 33394
Attention: Andrew Hahn
Telephone No.: (954) 765-2612
Telecopy No.: (954) 765-2026
with all notices of borrowing, conversion, continuation or prepayment of any
Loan to be delivered to the address set forth in Section 9.2 of the Credit
Agreement.
And with a copy of all Requisitions, all title insurance endorsements and
down-dates, and all documents identified on, or delivered pursuant to, SECTION
4.2 or Exhibit I or J, to be sent to:
NationsBank, National Association
One Financial Plaza
6-808-09-02
Fort Lauderdale, Florida 33394
Attention: Nancy Blackwood
Telephone No.: (954) 765-2627
Telecopy No.: (954) 765-2164
If to any other Lender or Holder, to it at the address specified in the
signature pages to the Credit Agreement or Trust Agreement (as applicable), any
applicable amendment thereto, or any applicable Assignment and Assumption.
From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.
51
<PAGE>
14.4. COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
14.5. AMENDMENTS AND TERMINATION. Neither this Agreement nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the Lessor, the Lessee, the Construction
Agent and (subject to Section 9.1 of the Credit Agreement) the Agent. This
Agreement may be terminated by an agreement signed in writing by the Owner
Trustee, the Holders, the Lenders, the Lessee, the Construction Agent and the
Agent.
14.6. HEADINGS, ETC. The Table of Contents and headings of the various
Articles and Sections of this Agreement are for convenience of reference only
and shall not modify, define, expand or limit any of the terms or provisions
hereof.
14.7. PARTIES IN INTEREST. Except as expressly provided herein, none of
the provisions of this Agreement are intended for the benefit of any Person
except the parties hereto; PROVIDED, that the Lenders are intended to be
third-party beneficiaries of this Agreement.
14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA,
WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS.
(b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
14.9. SUBMISSION TO JURISDICTION; WAIVERS. Each of the parties hereto
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Operative
Agreements to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of Florida and the courts of
the United States of America, in each case sitting in Broward County,
Florida, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such
52
<PAGE>
action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead
or claim the same,
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail) postage
prepaid, to the respective party at its address set forth in SECTION
14.3 hereof or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 14.9 any special, exemplary, punitive or
consequential damages.
14.10. SEVERABILITY. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render such
provision unenforceable in any other jurisdiction.
14.11. LIABILITY LIMITED.
(a) The Agent, the Lessee and the Holders each acknowledge and
agree that the Owner Trustee is (except as otherwise expressly provided
herein or therein) entering into this Agreement and the other Operative
Agreements to which it is a party (other than the Trust Agreement and
other than as set forth in SECTION 7.2 of this Agreement), solely in
its capacity as trustee under the Trust Agreement and not in its
individual capacity and that Trust Company shall not be liable or
accountable under any circumstances whatsoever in its individual
capacity for or on account of any statements, representations,
warranties, covenants or obligations stated to be those of the Owner
Trustee, except for its own gross negligence or willful misconduct and
except as otherwise expressly provided herein or in the other Operative
Agreements.
(b) Anything to the contrary contained in this Agreement, the
Credit Agreement, the Notes or in any other Operative Agreement
notwithstanding, neither the Lessor nor any Holder (in its capacity as
a Holder) nor any officer, director, shareholder, or partner thereof,
nor any of the successors or assigns of the foregoing (all such Persons
being hereinafter referred to collectively as the "Exculpated
Persons"), shall be personally liable in any respect for any liability
or obligation hereunder or under any other Operative Agreement
including the payment of the principal of, or interest on, the Notes,
or for monetary damages for the breach of performance of any of the
covenants contained in the Credit Agreement, the Notes, this Agreement,
the Security Agreement or any of the other
53
<PAGE>
Operative Agreements. The Agent (for itself and on behalf of the
Lenders) agrees that, in the event the Agent or any Lender pursues any
remedies available to them under the Credit Agreement, the Notes, this
Agreement, the Security Agreement, the Mortgage Instruments or under
any other Operative Agreement, neither the Lenders nor the Agent shall
have any recourse against any Exculpated Person, for any deficiency,
loss or Claim for monetary damages or otherwise resulting therefrom,
and recourse shall be had solely and exclusively against the Trust
Estate and the Lessee (with respect to the Lessee's obligations under
the Lease, the Participation Agreement and the Agency Agreement); but
nothing contained herein shall be taken to prevent recourse against or
the enforcement of remedies against the Trust Estate in respect of any
and all liabilities, obligations and undertakings contained herein, in
the Credit Agreement, in the Notes, in the Security Agreement, the
Mortgage Instruments or in any other Operative Agreement.
Notwithstanding the provisions of this Section, nothing in this
Agreement, the Credit Agreement, the Notes, the Security Agreement, the
Mortgage Instruments or any other Operative Agreement shall: (i)
constitute a waiver, release or discharge of any indebtedness or
obligation evidenced by the Notes or arising under this Agreement, the
Security Agreement, the Mortgage Instruments or the Credit Agreement or
secured by the Security Agreement, the Mortgage Instruments or any
other Operative Agreement, but the same shall continue until paid or
discharged; (ii) relieve the Lessor or any Exculpated Person from
liability and responsibility for (but only to the extent of the damages
arising by reason of): (a) active waste knowingly committed by such
Lessor or such Exculpated Person with respect to the Properties or (b)
any fraud, gross negligence, willful misconduct or willful breach on
the part of such Lessor or such Exculpated Person; (iii) relieve such
Lessor or such Exculpated Person from liability and responsibility for
(but only to the extent of the moneys misappropriated, misapplied or
not turned over) (a) misappropriation or misapplication by such Lessor
(I.E., application in a manner contrary to any Operative Agreement) of
any insurance proceeds or condemnation award paid or delivered to such
Lessor by any Person other than the Agent, (b) any deposits or any
escrows or amounts owed by the Lessee under the Agency Agreement held
by such Lessor or (c) any rents or other income received by such Lessor
from the Lessee that are not turned over to the Agent; or (iv) affect
or in any way limit the Agent's rights and remedies under any Operative
Agreement with respect to the Rents and its rights thereunder or its
right to obtain a judgment against the Lessor's interest in the
Properties.
14.12. RIGHTS OF LESSEE. Notwithstanding any provision of the Operative
Agreements, if at any time all obligations (i) of the Owner Trustee under the
Credit Agreement, the Security Documents, the Trust Agreement and the other
Operative Agreements and (ii) of the Lessee under the Operative Agreements have
in each case been satisfied or discharged in full, then the Lessee shall be
entitled to (a) terminate the Lease and (b) receive all amounts then held under
the Operative Agreements and all proceeds with respect to any of the Properties.
Upon the termination of the Lease pursuant to the foregoing clause (a), the
Lessor shall transfer to the Lessee all of its right, title and interest free
and clear of the Lien of the Lease and all Lessor Liens in and to any Properties
then subject to the Lease and any amounts or proceeds referred to in the
foregoing clause (b) shall be paid over to the Lessee.
54
<PAGE>
14.13. FURTHER ASSURANCES. The parties hereto shall promptly cause to
be taken, executed, acknowledged or delivered, at the sole expense of the
Lessee, all such further acts, conveyances, documents and assurances as the
other parties may from time to time reasonably request in order to carry out and
effectuate the intent and purposes of this Participation Agreement, the other
Operative Agreements and the transactions contemplated hereby and thereby
(including, without limitation, the preparation, execution and filing of any and
all Uniform Commercial Code financing statements and other filings or
registrations which the parties hereto may from time to time request to be filed
or effected). The Lessee, at its own expense and without need of any prior
request from any other party, shall take such action as may be necessary
(including any action specified in the preceding sentence), or (if Owner Trustee
shall so request) as so requested, in order to maintain and protect all security
interests provided for hereunder or under any other Operative Agreement.
14.14. CALCULATIONS UNDER OPERATIVE AGREEMENTS. The parties hereto
agree that all calculations and numerical determinations to be made under the
Operative Agreements by the Owner Trustee shall be made by the Agent and that
such calculations and determinations shall be conclusive and binding on the
parties hereto in the absence of manifest error.
14.15. CONFIDENTIALITY. Each of the Owner Trustee, the Holders, the
Agent and the Lenders severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to the Lessee or its
Subsidiaries which is provided to it by the Lessee or its Subsidiaries, and
shall not intentionally disclose such information to any Person except:
(a) to the extent such information is public when received by
such Person or becomes public thereafter due to the act or omission of
any party other than such Person;
(b) to the extent such information is independently obtained
from a source other than the Lessee or any of its Subsidiaries and such
information from such source is not, to such Person's knowledge,
subject to an obligation of confidentiality or, if such information is
subject to an obligation of confidentiality, that disclosure of such
information is permitted;
(c) to any Affiliate of any such Person or to counsel,
auditors or accountants retained by any such Person or any such
Affiliate, provided they agree to keep such information confidential as
if such Person or Affiliate were party to this Agreement and to
financial institution regulators, including examiners of any Lender,
the Agent or the Owner Trustee, any Holder or any Affiliate in the
course of examinations of such Persons;
(d) in connection with any litigation or the enforcement or
preservation of the rights of the Agent, the Owner Trustee, the Lessor,
any Lender or any Holder under the Operative Agreements;
(e) to the extent required by any applicable statute, rule or
regulation or court order (including, without limitation, by way of
subpoena) or pursuant to the request of any regulatory or Governmental
Authority having jurisdiction over any such Person; PROVIDED,
55
<PAGE>
HOWEVER, that such Person shall endeavor (if not otherwise prohibited
by Law) to notify the Lessee prior to any disclosure made pursuant to
this clause (e), except that no such Person shall be subject to any
liability whatsoever for any failure to so notify the Lessee;
(f) to the Agent, any Lender or any Holder; or
(g) to the extent disclosure to any other financial
institution or other Person is appropriate in connection with any
proposed or actual (i) assignment or grant of a participation by any of
the Lenders of interests in the Credit Agreement or any Note to such
other financial institution or (ii) assignment by any Holder of
interests in the Trust Agreement to another Person.
14.16. CALCULATION OF RENT, INTEREST, HOLDER YIELD AND FEES. Except as
otherwise expressly set forth in the Operative Agreements, all calculation of
Rent, interest, Holder Yield, Overdue Rate, Holder Overdue Rate, Unused Fees, or
Holder Unused Fees payable hereunder shall be computed based on the actual
number of days elapsed over a year of 360 days.
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
AVIATION SALES COMPANY,
as Construction Agent
By:_________________________________
Name:_______________________________
Title:______________________________
AVIATION SALES COMPANY,
as Lessee
By:_________________________________
Name:_______________________________
Title:______________________________
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, except as
SIGNATURE PAGE 1
<PAGE>
expressly stated herein, but solely as Owner
Trustee under the Aviation Sales Trust 1998-1
By:_________________________________
Name:_______________________________
Title:______________________________
SIGNATURE PAGE 2
<PAGE>
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:_________________________________
Name:_______________________________
Title:______________________________
NATIONSBANK, NATIONAL ASSOCIATION,
as a Holder
By:_________________________________
Name:_______________________________
Title:______________________________
NATIONSBANK, NATIONAL ASSOCIATION,
as a Lender
By:_________________________________
Name:_______________________________
Title:______________________________
Applicable Funding Office:
____________________________________
____________________________________
____________________________________
SIGNATURE PAGE 3
<PAGE>
- --------------------------------------------------------------------------------
Appendix A
Rules of Usage and Definitions
- --------------------------------------------------------------------------------
I. Rules of Usage
The following rules of usage shall apply to this Participation
Agreement and the Operative Agreements (and each appendix, schedule, exhibit and
annex to the foregoing) unless otherwise required by the context or unless
otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions
set forth herein or in any other document shall be equally applicable
to the singular and plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any
document to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits are references to articles, sections,
paragraphs, clauses, annexes, appendices, schedules or exhibits in or
to such document.
(c) The headings, subheadings and table of contents used in
any document are solely for convenience of reference and shall not
constitute a part of any such document nor shall they affect the
meaning, construction or effect of any provision thereof.
(d) References to any Person shall include such Person, its
successors and permitted assigns and transferees.
(e) Except as otherwise expressly provided, reference to any
agreement means such agreement as amended, modified, extended,
supplemented, restated or replaced from time to time in accordance with
the applicable provisions thereof.
(f) Except as otherwise expressly provided, references to any
law includes any amendment or modification to such law and any rules or
regulations issued thereunder or any law enacted in substitution or
replacement therefor.
(g) When used in any document, words such as "hereunder",
"hereto", "hereof" and "herein" and other words of like import shall,
unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article,
section, subsection, paragraph or clause thereof.
(h) References to "including" means including without limiting
the generality of any description preceding such term and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a
general statement, followed by or referable to an enumeration of
specific matters, to matters similar to those specifically mentioned.
Appendix A-1
<PAGE>
(i) Unless the context indicates otherwise, the disjunctive
"or" shall include the conjunctive "and."
(j) Each of the parties to the Operative Agreements and their
counsel have reviewed and revised, or requested revisions to, the
Operative Agreements, and the usual rule of construction that any
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Operative
Agreements and any amendments or exhibits thereto.
II. Definitions
"Acceleration" shall have the meaning given to such term in SECTION 6
of the Credit Agreement.
"Accommodation Obligation" shall have the meaning given to such term in
SECTION 1.01 of the Existing Aviation Sales Credit Agreement.
"acquire" or "purchase" shall mean, with respect to any Property,
unless the context indicates otherwise, the acquisition or purchase of such
Property by the Owner Trustee from any Person.
"Acquisition" means the acquisition of (i) a controlling equity
interest in another Person, whether by purchase of such equity interest or upon
exercise of an option or warrant for, or conversion of securities into, such
equity interest, or (ii) assets of another Person which constitute all or
substantially all of the assets of such Person or of a line or lines of business
conducted by such Person.
"Acquisition Funding" shall mean an advance of funds (consisting of
Loans by the Lenders and Holder Fundings by the Holders) to the Lessor on a
specified date to pay Property Acquisition Costs and other expenses pursuant to
SECTION 5.3(B) of the Participation Agreement.
"Acquisition Loan" shall mean any Loan made in connection with and as
part of an Acquisition Funding.
"Administrative Agent" or "Agent" shall mean, collectively, (a)
NationsBank, together with its Affiliates, as the administrative agent for the
Lenders under this Agreement and the other Operative Agreements and any
successor Administrative Agent who may be appointed pursuant to SECTION 7.9 of
the Credit Agreement, and (b) NationsBank, together with its affiliates, as
agent and collateral agent for itself, the Lenders and the Holders under the
Security Documents.
"Administrator" shall have the meaning given to such term in SECTION
1.01 of the Existing Aviation Sales Credit Agreement.
"Affiliate" shall mean, with respect to any Person, any Person or group
acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person. For the purposes of this definition, "control (including, with
correlative meanings, the terms "controlled by" and "under common control with")
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of
Appendix A-2
<PAGE>
management and policies of a Person, whether through the ownership of voting
securities or by contract or otherwise.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of the
amount of all taxes required to be paid by the recipient calculated at the rate
believed by such recipient to be the highest marginal rate then applicable to
the recipient (less any tax savings realized as a result of the payment of the
indemnified amount) with respect to the receipt by the recipient of such
amounts, such increased payment (as so reduced) is equal to the payment
otherwise required to be made.
"Agency Agreement" shall mean the Agency Agreement, dated as of the
Initial Closing Date, between the Construction Agent and the Lessor, as such
agreement may be amended, modified, restated or supplemented from time to time
in accordance with the terms thereof.
"Agency Agreement Event of Default" shall mean an "Event of Default" as
defined in SECTION 5.1 of the Agency Agreement.
"Allocated Interest" with respect to any Construction Period Property
shall mean as of any Scheduled Interest Payment Date, the amount of interest due
and payable on such date with respect to a portion of the Loans (which portion
shall be designated by the Borrower by written notice (an "ALLOCATION NOTICE")
to the Administrative Agent) having an aggregate principal amount equal to the
Loan Property Cost of such Property as of such date.
"Allocated Return" with respect to any Construction Period Property
shall mean, as of any Scheduled Interest Payment Date, the amount of Holder
Yield due and payable on such date with respect to a portion of the Holder
Fundings (which portion shall be designated by the Owner Trustee by written
notice to the Holders) having an aggregate stated amount equal to the Holder
Property Cost of such Property as of such date.
"Allocation Notice" shall have the meaning given to such term in the
definition of "Allocated Interest."
"Applicable Base Rate Margin" shall mean that percent per annum set
forth below, which shall be based upon the Consolidated Funded Debt-to-EBITDA
Ratio for the Four-Quarter Period most recently ended as specified below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Consolidated Funded Debt-to-EBITDA
Tier Ratio Applicable Base Rate Margin
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
I Less than or equal to 2.75 to 1.00 0.000%
- --------------------------------------------------------------------------------------------------------------
II Greater than 2.75 to 1.00 and less than or
equal to 3.25 to 1.00 0.000%
- --------------------------------------------------------------------------------------------------------------
III Greater than 3.25 to 1.00 and less than or
equal to 3.75 to 1.00 0.000%
- --------------------------------------------------------------------------------------------------------------
IV Greater than 3.75 to 1.00 and less than or
equal to 4.25 to 1.00 0.250%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Appendix A-3
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Consolidated Funded Debt-to-EBITDA
Tier Ratio Applicable Base Rate Margin
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
V Greater than 4.25 to 1.00 and less than or
equal to 4.75 to 1.00 0.500%
- --------------------------------------------------------------------------------------------------------------
VI Greater than 4.75 to 1.00 and less than or
equal to 5.25 to 1.00 0.750%
- --------------------------------------------------------------------------------------------------------------
VII Greater than 5.25 to 1.00 0.750%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
The Applicable Base Rate Margin shall be established at the end of each Fiscal
Quarter of Aviation Sales (the "Determination Date"). Any change in the
Applicable Base Rate Margin following each Determination Date shall be
determined based upon the computations set forth in the certificate furnished to
the Agent pursuant to SECTION 28.1(A)(I) of the Lease, subject to review and
approval of such computations by the Agent, and shall be effective commencing on
the date following the date such certificate is received (or, if earlier, the
date such certificate was required to be delivered) until the date following the
date on which a new certificate is delivered or is required to be delivered,
whichever shall first occur; PROVIDED however, if Aviation Sales shall fail to
deliver any such certificate within five (5) days after the time period required
for delivery of the related financial statements pursuant to SECTION 28.1(A)(I)
of the Lease, then the Applicable Base Rate Margin shall be Tier VI from the
date such certificate was required to be delivered until the appropriate
certificate is so delivered. The foregoing notwithstanding, from the Initial
Closing Date to the date following the date the certificate first delivered
pursuant to SECTION 28.1(A)(II) of the Lease is received (or, if earlier, the
date such certificate was required to be delivered), the Applicable Base Rate
Margin shall be .750%.
"Applicable Funding Office" means for each Lender or Holder and for
each Type of Loan or Holder Funding, the "Funding Office" of such Lender aor
Holder (or of an affiliate of such Lender or Holder) designated for such Type of
Loan or Holder Funding on the signature pages of the Participation Agreement or
the respective Assignment and Acceptance, or such other office of such Lender or
Holder (or an affiliate of such Lender or Holder) as such Lender or Holder may
from time to time specify to the Agent and the Borrower by written notice in
accordance with the terms of the Operative Agreements as the office by which its
Loans or Holder Fundings of such Type are to be made and maintained.
"Applicable Margin" shall mean, for each Eurodollar Loan, that percent
per annum set forth below, which shall be based upon the Consolidated Funded
Debt-to-EBITDA Ratio for the Four-Quarter Period most recently ended as
specified below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Tier Consolidated Funded Debt-to-EBITDA Ratio Applicable Margin
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
I Less than or equal to 2.75 to 1.00 1.375%
- -----------------------------------------------------------------------------------------------------------
II Greater than 2.75 to 1.00 and less than or equal
to 3.25 to 1.00 1.500%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Appendix A-4
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Tier Consolidated Funded Debt-to-EBITDA Ratio Applicable Margin
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
III Greater than 3.25 to 1.00 and less than or equal
to 3.75 to 1.00 1.750%
- -----------------------------------------------------------------------------------------------------------
IV Greater than 3.75 to 1.00 and less than or equal
to 4.25 to 1.00 2.000%
- -----------------------------------------------------------------------------------------------------------
V Greater than 4.25 to 1.00 and less than or equal
to 4.75 to 1.00 2.250%
- -----------------------------------------------------------------------------------------------------------
VI Greater than 4.75 to 1.00 and less than or equal
to 5.25 to 1.00 2.500%
- -----------------------------------------------------------------------------------------------------------
VII Greater than 5.25 to 1.00 2.750%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The Applicable Margin shall be established at the end of each Fiscal Quarter of
Aviation Sales (each, a "Determination Date"). Any change in the Applicable
Margin following each Determination Date shall be determined based upon the
computations set forth in the certificate furnished to the Agent pursuant to
SECTION 28.1(A)(I) of the Lease, subject to review and approval of such
computations by the Agent, and shall be effective commencing on the date
following the date such certificate is received (or, if earlier, the date such
certificate was required to be delivered) until the date following the date on
which a new certificate is delivered or is required to be delivered, whichever
shall first occur; PROVIDED however, if Aviation Sales shall fail to deliver any
such certificate within five (5) days after the time period required for
delivery of the related financial statements pursuant to SECTION 28.1(A)(I) of
the Lease, then the Applicable Margin shall be Tier VI from the date such
certificate was required to be delivered until the appropriate certificate is so
delivered. The foregoing notwithstanding, from the Initial Closing Date to the
date following the date the certificate first delivered pursuant to SECTION
28.1(A)(II) of the Lease is received (or, if earlier, the date such certificate
was required to be delivered), the Applicable Margin shall be 2.50%.
"Applicable Unused Fee Rate" shall mean one-half of one percent (.50%)
per annum.
"Appraisal" shall mean, with respect to any Property an appraisal to be
delivered in connection with SECTION 5.3 of the Participation Agreement, SECTION
3.2 of the Agency Agreement, SECTION 10.1(E) of the Lease, or any other
provision of the Operative Agreements, in each case prepared by a reputable
appraiser reasonably acceptable to the Agent, which in the judgment of counsel
to the Agent, complies with all of the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended, the rules and
regulations adopted pursuant thereto, and all other applicable Legal
Requirements.
"Appraisal Procedure" shall have the meaning given such term in SECTION
22.4 of the Lease.
"Approved State" shall mean any state located in the continental United
States.
Appendix A-5
<PAGE>
"Appurtenant Rights" shall mean (i) all agreements, easements, rights
of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land underlying any Improvements, or the Improvements,
including, without limitation, the use of any streets, ways, alleys, vaults or
strips of land adjoining, abutting, adjacent or contiguous to the Land and (ii)
all permits, licenses and rights, whether or not of record, appurtenant to such
Land.
"Assets" means all "Property", as defined in Section 1.01 of the
Existing Aviation Sales Credit Agreement, to the extent all property or assets
described therein are owned by the Lessee or its Subsidiaries.
"Assignment and Acceptance" shall mean the Assignment and Acceptance in
the form attached as EXHIBIT C to the Credit Agreement.
"Assignment of Project Rights" shall mean the Assignment of Project
Rights and Contract Documents dated as of the Initial Closing Date, between the
Owner Trustee and the Agent, as such agreement may be amended, modified,
restated or supplemented from time to time in accordance with the terms thereof.
"Available Commitment" shall mean, as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment over (b) the aggregate principal amount of all Loans made by such
Lender.
"Available Holder Commitments" shall mean an amount equal to the
excess, if any, of (i) the amount of the Holder Commitments over (ii) the
aggregate amount of the Holder Fundings made since the Initial Closing Date.
"Aviation Sales" shall mean Aviation Sales Company, a Delaware
corporation.
"Aviation Sales Credit Agreement Event of Default" shall mean an "Event
of Default" as defined in the Existing Aviation Sales Credit Agreement (as
amended, modified or restated heretofore or hereafter) or any New Facility,
PROVIDED that an Aviation Sales Credit Agreement Event of Default shall be
deemed to occur on the earlier of (a) the date that the Existing Credit Agent or
other applicable agent or any lender under such credit agreement or New Facility
exercises any remedy thereunder, or (b) twenty (20) days after the occurrence of
such "Event of Default"; and PROVIDED FURTHER that if the applicable agent and
required lenders under such credit agreement or New Facility waive such "Event
of Default" within such 20-day period (without exercising any remedies), then
such "Event of Default" shall not be deemed an "Aviation Sales Credit Agreement
Event of Default".
"Aviation Sales Trust 1998-1" shall mean the grantor trust created
pursuant to the terms and conditions of the Trust Agreement.
"Bankruptcy Code" shall mean Title 11 of the U.S. Code entitled
"Bankruptcy" as now or hereafter in effect, or any successor thereto;
Appendix A-6
<PAGE>
"Base Rate" means, for any day, the rate per annum equal to the higher
of (i) the Federal Funds Rate for such day plus one-half of one percent (0.5%)
plus the Applicable Base Rate Margin, or (ii) the Prime Rate for such day plus
the Applicable Base Rate Margin. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.
"Base Rate Funding" shall mean a Funding that bears interest (with
respect to the Loans included therein) and Holder Yield (with respect to the
Holder Fundings included therein) based on the Base Rate.
"Base Rate Holder Funding" shall mean a Holder Funding bearing a Holder
Yield based on the Base Rate.
"Base Rate Loans" shall mean Loans the rate of interest applicable to
which is based upon the Base Rate.
"Basic Rent" shall mean, the sum of (i) the Loan Basic Rent and (ii)
the Lessor Basic Rent, calculated as of the applicable date on which Basic Rent
is due.
"Basic Rent Commencement Date" shall have the meaning set forth in
Section 3.1(a)(ii) of the Lease.
"Basic Term" shall have the meaning specified in Section 2.2 of the
Lease.
"Basic Term Commencement Date" or "Term Commencement Date" shall have
the meaning specified in SECTION 2.2 of the Lease.
"Basic Term Expiration Date" shall have the meaning specified in
SECTION 2.2 of the Lease.
"Benefit Plan" shall have the meaning given to such term in SECTION
1.01 of the Existing Aviation Sales Credit Agreement.
"Bill of Sale" shall mean a Bill of Sale regarding Equipment in form
and substance satisfactory to the Owner Trustee, the Holders and the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrowing Date" shall mean any Business Day specified in a notice
delivered pursuant to SECTION 2.3 of the Credit Agreement as a date on which the
Borrower requests the Lenders to make Loans hereunder.
"Bridge Note" shall mean that certain Promissory Note dated October 15,
1998, by the Owner Trustee in favor of NationsBank.
Appendix A-7
<PAGE>
"Budgeted Total Loan Property Cost" shall mean, at any date of
determination, with respect to any Construction Period Property, an amount equal
to the aggregate amount which the Construction Agent in good faith expects to be
expended in order to achieve Completion with respect to such Property (including
amounts expected to be expended to pay Allocated Interest and Allocated Return
with respect to such Property).
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Fort Lauderdale, Florida or Charlotte, North
Carolina are authorized or required by law to close; PROVIDED, HOWEVER, that
when used in connection with a Eurodollar Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.
"Capital Expenditures" means, with respect to Aviation Sales and its
Subsidiaries, for any period the SUM of (without duplication) (i) all
expenditures (whether paid in cash or accrued as liabilities) by Aviation Sales
or any Subsidiary during such period for items that would be classified as
"property, plant or equipment" or comparable items on the consolidated balance
sheet of Aviation Sales and its Subsidiaries, including without limitation all
transactional costs incurred in connection with such expenditures provided the
same have been capitalized, excluding, however, the amount of any Capital
Expenditures paid for with proceeds of casualty insurance as evidenced in
writing and submitted to the Agent together with any compliance certificate
delivered pursuant to SECTION 28.1(A)(III) of the Lease and (ii) with respect to
any Capital Lease entered into by Aviation Sales or its Subsidiaries during such
period, the present value of the lease payments due under such Capital Lease
over the term of such Capital Lease applying a discount rate equal to the
interest rate provided in such lease (or in the absence of a stated interest
rate, that rate used in the preparation of the financial statements described in
SECTION 7.3(F)(I), and (iii) all Synthetic Lease Indebtedness (other than
Synthetic Lease Indebtedness incurred under the Operative Agreements), all the
foregoing in accordance with GAAP applied on a Consistent Basis.
"Capital Lease" shall have the meaning given to such term in SECTION
1.01 of the Existing Aviation Sales Credit Agreement.
"Capital Stock" shall have the meaning given to such term in SECTION
1.01 of the Existing Aviation Sales Credit Agreement.
"Cash Interest Expense" means, for any Person for any period, total
interest expense, whether paid or accrued, but without duplication, (including
the interest component of Capital Leases and including Synthetic Lease Basic
Rent, but net of the difference between payments received by such Person and its
Subsidiaries on all Hedge Agreements and payments made by such Person and its
Subsidiaries on all Hedge Agreements other than the initial payments made to
enter into such Hedge Agreements) of such Person and its Subsidiaries, which is
payable in cash, all as determined in conformity with GAAP.
Appendix A-8
<PAGE>
"Casualty" shall mean any damage or destruction of all or any portion
of a Property as a result of a fire or other casualty.
"Category" with respect to any Commitment or Loan shall mean a
Commitment or Loan with respect to Series A Loans or Series B Loans, as the case
may be.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. /section/ 9601 et seq., as
amended by the Superfund Amendments and Reauthorization Act of 1986.
"Certificate" shall mean a Certificate in favor of each Holder
evidencing the Holder Fundings made by such Holder and issued pursuant to the
Trust Agreement.
"Change of Control" means (i)the occurrence of any "Change of Control"
as defined in the Existing Aviation Sales Credit Agreement or (ii) if any Person
or group of Persons acting in concert shall own or control, directly or
indirectly, more than 50% of the outstanding ssecurities of the Lessee having
voting rights in the election of directors..
"Claims" shall mean any and all obligations, liabilities, losses,
actions, suits, penalties, claims, demands, costs and expenses (including,
without limitation, reasonable attorney's fees and expenses) of any nature
whatsoever (including without limitation claims brought against the Owner
Trustee by an Indemnified Person pursuant to SECTION 13.5).
"Closing Date" shall mean the Initial Closing Date and each Property
Closing Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute thereto.
"Collateral" shall mean all assets of the Lessor or the Lessee, now
owned or hereafter acquired, upon which a lien is purported to be created by the
Security Documents.
"Commitment" shall mean, as to any Lender, the obligation of such
Lender to make Series A Loans or Series B Loans, as the case may be, to the
Borrower hereunder in an aggregate principal amount at any one time outstanding
not to exceed the respective amounts for such Category set forth opposite such
Lender's name on SCHEDULE 1.2 of the Credit Agreement, as such amounts may be
reduced or increased from time to time in accordance with the provisions of this
Agreement, the Credit Agreement or the Lease.
"Commitment Percentage" shall mean, as to any Lender at any time, the
percentage which such Lender's Commitment with respect to a Category of Loans
then constitutes of the aggregate Commitments of all Lenders with respect to the
same Category (or, at any time after the Commitments of any such Category shall
have expired or terminated, the percentage which the aggregate principal amount
of such Lender's Loans of such Category then outstanding constitutes of the
aggregate principal amount of all of the Loans of such Category then
outstanding).
Appendix A-9
<PAGE>
"Commitment Period" shall mean the period from the Initial Closing Date
to and including the Construction Period Termination Date, or such earlier date
as the Commitments shall terminate as provided in the Credit Agreement.
"Completed Property" shall mean a Property for which Completion has
occurred or will occur on the date of determination or on the respective
Property Closing Date.
"Completion" shall mean, with respect to a Property, such time as final
completion of the Improvements on such Property has been achieved in accordance
with the Plans and Specifications (excluding punch list items), the Agency
Agreement and the Lease, and in compliance in all material respects with all
Legal Requirements and Insurance Requirements, a certificate of occupancy has
been issued with respect to such Property by the appropriate Governmental
Authority, and no additional Fundings are needed for such Property. If the
Lessor purchases a Property that includes existing Improvements that are to be
immediately occupied by the Lessee, the date of Completion for such Property
shall be the Property Closing Date.
"Completion Date" shall mean, with respect to a Property, the earlier
of (i) the date on which Completion for such Property has occurred, and (ii) the
Construction Period Termination Date. The foregoing notwithstanding, for the
purposes of Section 2.1, 2.6(b), 3.2(a)(x) or 3.3 of the Agency Agreement,
"Completion Date" shall mean, with respect to a Property, the date on which
Completion for such Property has occurred.
"Condemnation" shall mean any taking or sale of the use, access,
occupancy, easement rights or title to any Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of: (a) any actual
or threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including any action by a Governmental
Authority to change the grade of, or widen the streets adjacent to, any Property
or alter the pedestrian or vehicular traffic flow to any Property so as to
result in a change in access to such Property, or (b) an eviction by paramount
title or any transfer made in lieu of any such proceeding or action.
"Consistent Basis" in reference to the application of GAAP means the
accounting principles observed in the period referred to are comparable in all
material respects to those applied in the preparation of the audited financial
statements of Aviation Sales referred to in SECTION 7.3(F).
"Consolidated EBITDA" means, with respect to Aviation Sales and its
Subsidiaries for any Four-Quarter Period ending on the date of computation
thereof, the SUM of, without duplication, (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) taxes on income, (iv) amortization, (v)
depreciation, all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis; PROVIDED, HOWEVER, that with respect to an
Acquisition that is accounted for as a "purchase", for the four (4) Four-Quarter
Periods ending next following the date of such Acquisition, Consolidated EBITDA
shall include the results of operations of the Person or assets so acquired,
which amounts shall be determined on a
Appendix A-10
<PAGE>
historical pro forma basis as if such Acquisition had been consummated as a
"pooling of interests".
"Consolidated Fixed Charge Ratio" means, with respect to Aviation Sales
and its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the ratio of (i) Consolidated EBITDA plus Basic Rent for
such period less (without duplication) Capital Expenditures for such period to
(ii) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" means, with respect to Aviation Sales and
its Subsidiaries for any Four-Quarter Period ending on the date of computation
thereof, the SUM of, without duplication, (i) Consolidated Interest Expense,
(ii) one-twentieth (1/20) of average daily outstanding Property Cost, (iii)
current maturities of Consolidated Indebtedness, (iv) income taxes accrued
during such period, and (v) all dividends and other distributions (other than
distributions in the form of capital stock of Aviation Sales) paid during such
period (regardless of when declared) on any shares of capital stock of Aviation
Sales then outstanding, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis; PROVIDED, HOWEVER, that with respect to
an Acquisition that is accounted for as a "purchase", for the four (4)
Four-Quarter Periods ending next following the date of such Acquisition,
Consolidated Fixed Charges shall include the Consolidated Fixed Charges of the
Person or assets so acquired, which amounts shall be determined on a historical
pro forma basis as if such Acquisition had been consummated as a "pooling of
interests"..
"Consolidated Funded Debt" means all Funded Debt of Aviation Sales and
its Subsidiaries, determined on a consolidated basis.
"Consolidated Funded Debt-to-EBITDA Ratio" means, as of the date of
computation thereof, the ratio of (i) the sum of (without duplication)
Consolidated Funded Debt (determined as at such date) to (ii) Consolidated
EBITDA (for the Four-Quarter Period ending on (or most recently ended prior to)
such date).
"Consolidated Interest Expense" means, with respect to any period of
computation thereof, (a) the sum of the gross interest expense of Aviation Sales
and its Subsidiaries, including without limitation (i) the current amortized
portion of debt discounts to the extent included in gross interest expense, (ii)
the current amortized portion of all fees (including fees payable in respect of
any Hedge Agreement) payable in connection with the incurrence of Indebtedness
to the extent included in gross interest expense and (iii) the portion of any
payments made in connection with Capital Leases allocable to interest expense,
plus (b) Synthetic Lease Basic Rent of Aviation Sales and its Subsidiaries, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Lease Payments" means the gross amount of all lease or
rental payments, whether or not characterized as rent, of Aviation Sales and its
Subsidiaries, excluding payments in respect of Capital Leases constituting
Indebtedness, all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
Appendix A-11
<PAGE>
"Consolidated Net Income" means, for any period of computation thereof,
the gross revenues from operations of Aviation Sales and its Subsidiaries
(including payments received by Aviation Sales and its Subsidiaries of (i)
interest income, and (ii) dividends and distributions made in the ordinary
course of their businesses by Persons in which investment is permitted pursuant
to the Operating Agreements and not related to an extraordinary event), less all
operating and non-operating expenses of Aviation Sales and its Subsidiaries
including taxes on income, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis; but excluding (for all purposes other
than compliance with SECTION 28.4(A)) as income: (i) net gains on the sale,
conversion or other disposition of capital assets, (ii) net gains on the
acquisition, retirement, sale or other disposition of capital stock and other
securities of Aviation Sales or its Subsidiaries, (iii) net gains on the
collection of proceeds of life insurance policies, (iv) any write-up of any
asset, and (v) any other net gain or credit of an extraordinary nature as
determined in accordance with GAAP applied on a Consistent Basis.
"Consolidated Senior Debt" shall mean the Senior Debt of Aviation Sales
and its Subsidiaries, determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Shareholders' Equity" means, as of any date on which the
amount thereof is to be determined, the sum of the following in respect of
Aviation Sales and its Subsidiaries (determined on a consolidated basis and
excluding any upward adjustment after the Initial Closing Date due to
revaluation of assets): (i) the amount of issued and outstanding share capital,
plus (ii) the amount of additional paid-in capital and retained earnings (or, in
the case of a deficit, minus the amount of such deficit), plus (iii) the amount
of any foreign currency translation adjustment (if positive, or, if negative,
minus the amount of such translation adjustment), minus (iv) the amount of any
treasury stock, all as determined in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Tangible Net Worth" means, as of any date on which the
amount thereof is to be determined, Consolidated Shareholders' Equity minus
(without duplication of deductions in respect of items already deducted in
arriving at surplus and retained earnings) the net book value of all assets
which would be treated as intangible assets, such as (without limitation)
goodwill (whether representing the excess of cost over book value of assets
acquired or otherwise), capitalized expenses, unamortized debt discount and
expense, consignment inventory rights, patents, trademarks, trade names,
copyrights, franchises and licenses, all as determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis.
"Construction Agent" shall mean Aviation Sales , as construction agent
under the Agency Agreement.
"Construction Agent Options" shall have the meaning given to such term
in SECTION 2.1 of the Agency Agreement.
Appendix A-12
<PAGE>
"Construction Budget" shall mean, with respect to any Property, the
cost of constructing and developing any Improvements on such Property as
determined by the Construction Agent in its reasonable, good faith judgment.
"Construction Commencement Date" shall mean, with respect to
Improvements, the date on which construction of such Improvements commences
pursuant to the Agency Agreement.
"Construction Consultant" means Zimmer Construction Consultants or any
other construction consultant approved by the Agent in its sole discretion.
"Construction Funding" shall mean an advance of funds (consisting of
Loans by the Lenders and Holder Fundings by the Holders) on a specified date to
pay Property Costs pursuant to SECTION 5.4 OR 5.5 of the Participation
Agreement.
"Construction Loan" shall mean any Loan made in connection with and as
part of a Construction Funding .
"Construction Loan Property Cost" shall mean, with respect to each
Construction Period Property at any date of determination, an amount equal to
(a) the aggregate principal amount of Construction Loans and Interest Payment
Loans made on or prior to such date with respect to such Property minus (b) the
aggregate principal amount of prepayments or repayments, as the case may be, of
the Loans allocated to reduce the Construction Loan Property Cost of such
Property pursuant to SECTION 2.6(C) of the Credit Agreement.
"Construction Period" shall mean, with respect to a Property, the
period commencing on the Construction Commencement Date for such Property and
ending on the Completion Date for such Property.
"Construction Period Property" shall mean, at any date of
determination, any Property as to which the Basic Rent Commencement Date has not
occurred on or prior to such date.
"Construction Period Termination Date" shall mean the earlier of (i)
the date that the Commitments have been terminated in their entirety in
accordance with the terms of Section 2.5(a) of the Credit Agreement, or (ii)
December 17, 2000.
"Contaminant" shall have the meaning given to such term in SECTION 1.01
of the Existing Aviation Sales Credit Agreement.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" (including the correlative meanings of the terms "controlled
by" and "under common control with"), as used with respect to any Person, shall
mean the possession directly or
Appendix A-13
<PAGE>
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.
"Co-Owner Trustee" shall have the meaning specified in SECTION 9.2 of
the Trust Agreement.
"Credit Agreement" shall mean the Credit Agreement, dated as of the
Initial Closing Date, among the Lessor, the Agent, and the Lenders, as specified
therein, as such agreement may be amended, modified, restated or supplemented
from time to time in accordance with the terms thereof.
"Credit Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a
Credit Agreement Event of Default.
"Credit Agreement Event of Default" shall mean any event or condition
defined as an "Event of Default" in Section 6 of the Credit Agreement.
"Credit Documents" shall mean the Credit Agreement, the Notes, and the
Security Documents.
"Deed" shall mean a warranty deed regarding Land or Improvements in
form and substance satisfactory to the Owner Trustee, the Holders and the Agent.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DOL" shall have the meaning given to such term in SECTION 1.01 of the
Existing Aviation Sales Credit Agreement.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Election Notice" shall have the meaning given to such term in SECTION
20.1 of the Lease.
"Environmental Claim" shall mean any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, any actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Substance, (c) from or with respect to any abatement, removal,
remedial, corrective, or other response action in connection with a Hazardous
Material, Environmental Law, or other similar order of a Governmental Authority
or (d) from or with respect to any actual or alleged damage, injury, threat, or
harm to health, safety, natural resources, or the environment.
"Environmental, Health or Safety Requirement of Law" shall have the
meaning given to such term in SECTION 1.01 of the Existing Aviation Sales Credit
Agreement.
Appendix A-14
<PAGE>
"Environmental Indemnity" means any indemnity pursuant to SECTION 13.3,
or any indemnity with respect to an Environmental Claim.
"Environmental Law" shall mean any Law, permit, consent, approval,
license, award, or other authorization or requirement of any Governmental
Authority relating to emissions, discharges, releases, threatened releases of
any Hazardous Substance into ambient air, surface water, ground water, publicly
owned treatment works, septic system, or land, or otherwise relating to the
handling, storage, treatment, generation, use, emission or disposal of any
Hazardous Substance or pollution or to the protection of health or the
environment, including without limitation CERCLA, the Resource Conservation and
Recovery Act, 42 U.S.C. /section/ 6901, et seq., and state or local statutes
analogous thereto.
"Environmental Lien" shall have the meaning given to such term in
SECTION 1.01 of the Existing Aviation Sales Credit Agreement.
"Environmental Violation" shall mean any activity, occurrence or
condition that violates or threatens to violate (if the threat requires
correction or remediation under any Environmental Law and is not corrected or
remediated during any grace period allowed under such Environmental Law) or
results in or threatens (if the threat requires correction or remediation under
any Environmental Law and is not corrected or remediated during any grace period
allowed under such Environmental Law) to result in noncompliance with any
Environmental Law.
"Equipment" shall mean equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever purchased, leased or
otherwise acquired using the proceeds of the Loans or the Holder Fundings by the
Construction Agent, the Lessee or the Lessor as specified or described in either
a Requisition or a Lease Supplement, whether or not now or subsequently attached
to, contained in or used or usable in any way in connection with any operation
of any Improvements or other improvements to real property, including without
limitation, all equipment described in the Appraisal, all heating, electrical,
and mechanical equipment, lighting, switchboards, plumbing, ventilation, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and systems,
sprinkler systems and other fire prevention and extinguishing apparatus and
materials, security systems, motors, engines, machinery, pipes, pumps, tanks,
conduits, fittings and fixtures of every kind and description.
"Equipment Schedule" shall mean (a) each Equipment Schedule attached to
the applicable Requisition and (b) each Equipment Schedule attached to the
applicable Lease Supplement as Schedule I-A.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean each entity required to be aggregated with
the Lessee pursuant to the requirements of SECTION 414(B) OR (C) of the Code.
Appendix A-15
<PAGE>
"Eurodollar Funding" shall mean a Funding that bears interest (with
respect to the Loans included therein) and Holder Yield (with respect to the
Holder Fundings included therein) based on the Eurodollar Rate.
"Eurodollar Holder Funding" shall mean a Holder Funding bearing a
Holder Yield based on the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Reserve Rate.
"Eurodollar Rate" or "Eurodollar Reserve Rate" shall mean the interest
rate per annum calculated according to the following formula:
Eurodollar = INTERBANK OFFERED RATE + Applicable
----------------------
Rate 1 - Reserve Requirement Margin
"Event of Default" shall mean a Lease Event of Default, a Guaranty
Event of Default, an Agency Agreement Event of Default or a Credit Agreement
Event of Default.
"Excepted Payments" shall mean:
(a) all indemnity payments (including indemnity payments made pursuant
to SECTION 13 of the Participation Agreement), whether made by adjustment to
Basic Rent or otherwise, to which the Owner Trustee, any Holder or any of their
respective Affiliates, agents, officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent, Termination Value, or Purchase
Option Price) payable under any Operative Agreement to reimburse the Owner
Trustee, any Holder or any of their respective Affiliates for performing or
complying with any of the obligations of the Lessee under and as permitted by
any Operative Agreement (including without limitation any reimbursement of the
reasonable expenses of the Owner Trustee, the Trust Company and the Holders
incurred in connection with any such payment);
(c) any amount payable to a Holder by any transferee of such interest
of a Holder as the purchase price of such Holder's interest in the Trust Estate
(or portion thereof);
(d) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies other than such
proceeds or payments payable to the Agent or any Lender;
(e) any insurance proceeds under policies maintained by the Owner
Trustee or any Holder other than such proceeds payable to the Agent or any
Lender;
(f) Transaction Expenses or other amounts or expenses paid or payable
to or for the benefit of the Owner Trustee or any Holder;
Appendix A-16
<PAGE>
(g) all right, title and interest of any Holder or the Owner Trustee to
any Property or any portion thereof or any other property to the extent any of
the foregoing has been released from the Liens of the Security Documents and the
Lease pursuant to the terms thereof;
(h) upon termination of the Credit Agreement pursuant to the terms
thereof, all remaining property covered by the Lease or Security Documents;
(i) all payments in respect of the Holder Yield;
(j) any payments in respect of interest to the extent attributable to
payments referred to in clauses (a) through (i) above; and
(k) any rights of either the Owner Trustee or Trust Company to demand,
collect, sue for or otherwise receive and enforce payment of any of the
foregoing amounts, provided that such rights shall not include the right to
terminate the Lease.
"Excepted Rights" shall mean the rights retained by the Owner Trustee
pursuant to SECTION 8.2(A) of the Credit Agreement.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by the Lessee pursuant
to the Lease with respect to such Casualty or Condemnation.
"Existing Credit Agent" shall mean the "Agent" as defined in the
Existing Aviation Sales Credit Agreement.
"Existing Aviation Sales Credit Agreement" means that certain Third
Amended and Restated Credit Agreement dated as of October 17, 1997, as amended
by Amendment No. 1 thereto dated as of March 31, 1998, Amendment No. 2 and
Consent thereto dated as of September 18, 1998, Amendment No. 3 dated as of
November 24, 1998 and Amendment No. 4 dated as of December 16, 1998, among
Aviation Sales Operating Company, Aerocell Structures, Inc, AVS/Kratz-Wilde
Machine Company, Whitehall Corporation and Triad International Maintenance
Corporation, as borrowers, Aviation Sales, the lenders party thereto, Citicorp
USA, Inc., as agent and Citicorp Securities, Inc., as arranger
"Expected Maximum Property Cost" at any time shall mean the sum of (a)
the then outstanding aggregate Property Cost of all Properties (whether or not
subject to the Lease), plus (b) the maximum total additional Property Cost
expected to be advanced or incurred, on such date or at any time thereafter,
with respect to any Properties (including without limitation any expected
Acquisition Funding, Contribution Funding or other expected Property Costs, and
including without limitation any expected Property Cost referred to in a
Construction Budget).
"Expiration Date" shall mean the Basic Term Expiration Date.
Appendix A-17
<PAGE>
"Expiration Date Purchase Option" shall mean the Lessee's option to
purchase all (but not less than all) of the Properties on the Expiration Date.
"Fair Market Sales Value" shall mean, with respect to any Property, the
amount, which in any event, shall not be less than zero, that would be paid in
cash in an arms-length transaction between an informed and willing purchaser and
an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, such Property. Fair Market Sales Value of any
Property shall be determined based on the assumption that, except for purposes
of SECTION 17 of the Lease, such Property is in the condition and state of
repair required under SECTION 10.1 of the Lease and the Lessee is in compliance
with the other requirements of the Operative Agreements.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Agent (in its
individual capacity) on such day on such transactions as determined by the
Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Fee Letter" shall mean that certain letter agreement dated October 14,
1998 between Aviation Sales and NMS.
"Finance Affiliate Indebtedness" shall have the meaning given to such
term in SECTION 1.01 of the Existing Aviation Sales Credit Agreement.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on the December 31; references to a Fiscal Year with a number
corresponding to any calendar year (E.G., the "1996 Fiscal Year") refer to the
Fiscal Year ending on December 31 of such calendar year.
"Fixtures" shall mean all fixtures relating to the Improvements,
including all components thereof, located in or on the Improvements, together
with all replacements, modifications, alterations and additions thereto.
"Force Majeure Event" shall mean any event beyond the control of the
Construction Agent, other than a Casualty or Condemnation, including, but not
limited to, strikes or lockouts (but only when the Construction Agent is legally
prevented from securing replacement labor or
Appendix A-18
<PAGE>
materials as a result thereof), adverse soil conditions, acts of God, adverse
weather conditions, inability to obtain labor or materials after all possible
efforts have been expended by the Construction Agent, governmental activities,
civil commotion and enemy action; but excluding any event, cause or condition
that results from the Construction Agent's financial condition.
"Foreign Subsidiary" shall have the meaning given to such term in
SECTION 1.01 of the Existing Aviation Sales Credit Agreement.
"Four-Quarter Period" shall have the meaning given to such term in the
Existing Aviation Sales Credit Agreement.
"Funded Debt" means, with respect to any Person, the sum of, without
duplication, (i) Indebtedness of such Person and its Subsidiaries for borrowed
money (determined in accordance with GAAP), including, without limitation,
Indebtedness under Capital Leases (as defined in the Existing Aviation Sales
Credit Agreement), and (ii) Synthetic Lease Indebtedness of such Person and its
Subsidiaries.
"Funding" shall mean a Construction Funding, an Acquisition Funding, or
any other advance of funds (consisting of Loans by the Lenders and Holder
Fundings by the Holders).
"GAAP" shall mean "Generally Accepted Accounting Principles" as defined
in the Existing Aviation Sales Credit Agreement.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions, publications,
filings, notices to and declarations of or with, or required by, any
Governmental Authority, or required by any Legal Requirement, and shall include,
without limitation, all environmental and operating permits and licenses that
are required for the full use, occupancy, zoning and operation of any Property.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including without limitation any court or governmental body,
agency, department, commission, board, bureau or instrumentality of a
governmental body.
"Ground Lease" shall mean (a) a ground lease (in form and substance
satisfactory to the Agent and the Lessor) with respect to any Property owned by
the Lessee and leased to the Lessor where such lease has a ninety-nine year term
and payments set at $1.00 per year, or (b) a ground lease or ground sub-lease of
any Property by any Person to the Lessor, where such lease or sublease (as well
as any other lease or sub-lease with respect to such Property) is in form and
substance, and contains such terms and conditions, as are satisfactory in all
respects to the Agent and the Lessor.
Appendix A-19
<PAGE>
"Guarantors" shall mean, collectively, Aviation Sales and each of the
Subsidiaries of Aviation Sales.
"Guaranty Agreement" or "Guaranty" shall mean, collectively, (a) the
Guaranty Agreement (Series A Obligations) dated as of the Initial Closing Date
among each Guarantor and the Agent, (b) the Guaranty Agreement dated as of the
Initial Closing Date by each Guarantor (other than Aviation Sales) to the
Lessor, the Agent, the Lenders and the Holder, and (c) any other Guaranty
Agreement by any Guarantor in favor of the Lessor, the Agent, the Lenders and
the Holders, as each such agreement may be amended, supplemented, restated or
modified from time to time in accordance with the terms thereof.
"Guaranty Event of Default" shall mean any an "Event of Default" as
defined in the Guaranty Agreement.
"Hazardous Substance" shall mean any of the following: (i) any
petroleum or petroleum product, explosives, radioactive material, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (ii) any substance,
material, product, derivative, compound or mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally occurring,
man-made or the by-product of any process, that is toxic, harmful or hazardous
to the environment or human health or safety as determined in accordance with
any Environmental Law; or (iii) any substance, material, product, derivative,
compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant
that would support the assertion of any claim under any Environmental Law,
whether or not defined as hazardous as such under any Environmental Law.
"Hedge Agreement" shall have the meaning specified in the Existing
Aviation Sales Credit Agreement.
"Hedging Obligations" shall mean, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
"Holder Amount" shall mean as of any date, the aggregate amount of
Holder Fundings made by each Holder to the Trust Estate pursuant to SECTION 2 of
the Participation Agreement or SECTION 3.1 of the Trust Agreement less any
payments of any Holder Fundings received by the Holders pursuant to SECTION 3.4
of the Trust Agreement.
"Holder Applicable Margin" shall mean a rate per annum equal to
three-fourths of one percent (.75%).
"Holder Commitment" shall mean, as to any Holder, the obligation of
such Holder to make Holder Fundings to the Lessor in an aggregate principal
amount at any time outstanding not to exceed the respective amount set forth
opposite such Holder's name on Schedule 1, as such amounts may be increased or
reduced from time to time in accordance with the provisions of this Agreement,
the Trust Agreement or the Lease.
Appendix A-20
<PAGE>
"Holder Commitments" shall mean the aggregate of all Holder
Commitments.
"Holder Construction Property Cost" shall mean, with respect to any
Construction Period Property at any date of determination, an amount equal to
(a) the outstanding Holder Fundings made on or prior to such date in connection
with and as part of any Construction Funding for such Property, PLUS (b) the
outstanding Holder Fundings made on or prior to such date to fund the payment of
Allocated Holder Return with respect to such Property, MINUS (c) the aggregate
principal amount of prepayments or repayments, as the case may be, of Holder
Fundings described in clause (a) or clause (b).
"Holder Funding" shall mean any Funding made by any Holder to the Owner
Trustee pursuant to the terms of the Trust Agreement or the Participation
Agreement.
"Holder Overdue Rate" shall mean the rate specified in SECTION 3.13 of
the Trust Agreement.
"Holder Property Cost" shall mean with respect to a Property an amount
equal to the outstanding Holder Fundings with respect thereto (including Holder
Fundings with respect to Allocated Return allocated to such Property).
"Holder Unused Fee" shall mean, at any time, the product of (a) the
Applicable Unused Fee Rate, MULTIPLIED BY (b) the average daily amount by which
(i) the aggregate Holder Commitments of the Holders (under the Operative
Agreements) exceeds (ii) the aggregate outstanding principal amount of Holder
Fundings.
"Holder Yield" shall mean with respect to Holder Fundings from time to
time either the Eurodollar Rate (including the Applicable Margin) plus the
Holder Applicable Margin, or the Base Rate plus the Holder Applicable Margin, as
elected by the Owner Trustee from time to time with respect to such Holder
Fundings in accordance with the terms of the Trust Agreement; PROVIDED, HOWEVER,
that (i) upon delivery of the notice described in SECTION 3.7(C) of the Trust
Agreement, the outstanding Holder Fundings of each Holder shall bear a yield at
the Base Rate plus the Holder Applicable Margin from time to time from and after
the dates and during the periods specified in SECTION 3.7(C) of the Trust
Agreement, and (ii) upon the delivery by a Holder of the notice described in
SECTION 3.9(E) of the Trust Agreement or as otherwise set forth in SECTION 3.8
of the Trust Agreement, the Holder Fundings of such Holder shall bear a yield at
the Base Rate plus the Holder Applicable Margin applicable from time to time
after the dates and during the periods specified in SECTION 3.9(E) or 3.8 (as
the case may be) of the Trust Agreement.
"Holders" shall mean the several banks and other financial institutions
which are from time to time holders of Certificates in connection with the
Aviation Sales Trust 1998-1.
"Impositions" shall mean, except to the extent described in the
following sentence, any and all liabilities, losses, expenses, costs, charges
and Liens of any kind whatsoever for fees, taxes, levies, imposts, duties,
charges, assessments or withholdings ("Taxes") including without limitation (i)
any real and personal property taxes, including personal property taxes on any
Appendix A-21
<PAGE>
property covered by the Lease that is classified by Governmental Authorities as
personal property, frontage taxes and real estate or ad valorem taxes in the
nature of property taxes; (ii) any sales taxes, use taxes and other similar
taxes (including rent taxes and intangibles taxes); (iii) any excise taxes; (iv)
any real estate transfer taxes, conveyance taxes, mortgage taxes, stamp taxes
and documentary recording taxes and fees; (v) any taxes that are or are in the
nature of franchise, income, value added, privilege and doing business taxes,
license and registration fees; (vi) any assessments on any Property, including
all assessments for public Improvements or benefits, whether or not such
improvements are commenced or completed within the Term; and (vii) any tax,
Lien, assessment or charge asserted, imposed or assessed by the PBGC or any
governmental authority succeeding to or performing functions similar to, the
PBGC; and in each case all interest, additions to tax and penalties thereon,
which at any time prior to, during or with respect to the Term or in respect of
any period for which the Lessee shall be obligated to pay Supplemental Rent, may
be levied, assessed or imposed by any Governmental Authority upon or with
respect to (a) any Property or any part thereof or interest therein; (b) the
leasing, financing, refinancing, demolition, construction, substitution,
subleasing, assignment, control, condition, occupancy, servicing, maintenance,
repair, ownership, possession, activity conducted on, delivery, insuring, use,
operation, improvement, transfer of title, return or other disposition of any
Property or any part thereof or interest therein; (c) the Certificates or the
Notes or other indebtedness with respect to any Property or any part thereof or
interest therein; (d) the rentals, receipts or earnings arising from any
Property or any part thereof or interest therein; (e) the Operative Agreements,
the performance thereof, or any payment made or accrued pursuant thereto; (f)
the income or other proceeds received with respect to any Property or any part
thereof or interest therein upon the sale or disposition thereof; (g) any
contract (including the Agency Agreement) relating to the construction,
acquisition or delivery of the Improvements or any part thereof or interest
therein; (h) the issuance of the Certificates or the Notes; or (i) otherwise in
connection with the transactions contemplated by the Operative Agreements.
The term "Imposition" shall not mean or include:
(i) Taxes and impositions (other than Taxes that are, or are
in the nature of, withholding, sales, use, rental, value added,
transfer or property taxes) that are imposed on an Indemnified Person
(other than Lessor) by the United States federal government or (in the
case of a Person organized under the laws of a foreign country) by a
Governmental Authority of such country, and that are in each case based
on or measured by the net income (including taxes based on capital
gains and minimum taxes or franchise taxes) of such Person; PROVIDED
that this clause (i) shall not apply to (and shall not exclude) any Tax
or imposition imposed with respect to a payment (including any Rent
payment) except for (A) the portion of such payment constituting
interest on a Loan or Holder Yield or (B) any such Tax or imposition to
the extent it arises because an Indemnified Person has previously
written off as uncollectible (and reduced the tax basis for) an
Obligation which it has subsequently collected, and PROVIDED, FURTHER
that this clause (i) shall not be interpreted to prevent a payment from
being made on an After Tax Basis if such payment is otherwise required
to be so made;
Appendix A-22
<PAGE>
(ii) Taxes and impositions (other than Taxes that are, or are
in the nature of, sales, use, rental, value added, transfer or property
taxes) that are imposed on any Indemnified Person (other than Lessor)
by any state or local jurisdiction or taxing authority within any state
or local jurisdiction and that are based upon or measured by the net
income or net receipts; PROVIDED that this clause (ii) shall not apply
to (and shall not exclude) (A) any Tax or imposition imposed with
respect to a payment (including any Rent payment) except for (I) the
portion of such payment constituting interest on a Loan or Holder Yield
or (II) any such Tax or imposition to the extent it arises because an
Indemnified Person has previously written off (and reduced the tax
basis for) an Obligation which it has subsequently collected, or (B)
any Tax or imposition imposed on an Indemnified Person by any state or
local jurisdiction if such Tax or imposition would not arise as to such
Person but for the location, possession or use of any Property in such
jurisdiction; and PROVIDED, FURTHER, that this clause (ii) shall not be
interpreted to prevent a payment from being made on an After Tax Basis
if such payment is otherwise required to be so made;
(iii) any Tax or imposition to the extent, but only to such
extent, it relates to any act, event or omission that occurs after the
termination of the Lease and redelivery or sale of the property in
accordance with the terms of the Lease (but not any Tax or imposition
that relates to such termination, redelivery or sale or to any period
prior to such termination, redelivery or sale); or
(iv) any Taxes which are imposed on an Indemnified Person as a
result of the gross negligence or willful misconduct of such
Indemnified Person itself (as opposed to any gross negligence or
willful misconduct imputed to such Indemnified Person), but not Taxes
imposed as a result of the ordinary negligence of such Person.
Any Tax or imposition excluded from the defined term "Imposition" by any one of
the foregoing clauses (i) through (iv) shall not be construed as constituting an
Imposition by any provision of any other of the aforementioned clauses.
"Improvements" shall mean, with respect to the construction, renovation
or Modification of a Property, all buildings, structures, Fixtures, and other
improvements of every kind existing at any time and from time to time on or
under the Land purchased, leased or otherwise acquired using the proceeds of the
Loans or the Holder Fundings, together with any and all appurtenances to such
buildings, structures or improvements, including sidewalks, utility pipes,
conduits and lines, parking areas and roadways, and including all Modifications
and other additions to or changes in the Improvements at any time, including
without limitation (a) any Improvements existing as of the Property Closing Date
as such Improvements may be referenced on the applicable Requisition and (b) any
Improvements made subsequent to such Property Closing Date.
"Indebtedness" shall have the meaning assigned thereto in the Existing
Aviation Sales Credit Agreement.
Appendix A-23
<PAGE>
"Indemnified Person" shall mean each of the Lessor, the Owner Trustee,
in its individual and its trust capacity, the Agent, NMS, the Holders, the
Lenders and their respective successors, assigns, directors, shareholders,
partners, officers, employees, agents and Affiliates.
"Indemnity Provider" shall mean, collectively, the Construction Agent,
the lessee and the Guarantors, whose obligations as Indemnity Provider under the
Operative Agreements shall be joint and several.
"Initial Closing Date" shall mean the date of the Participation
Agreement.
"Initial Construction Funding" shall mean any initial Funding to pay
for: (i) Property Costs for construction of any Improvements; and (ii) the
Property Costs of restoring or repairing any Property which is required to be
restored or repaired in accordance with SECTION 15.1(E) of the Lease.
"Insurance Requirements" shall mean (a) all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Agency Agreement to be maintained by the Construction Agent, and
(b) all requirements of the issuer of any such policy.
"Interbank Offered Rate" or "Applicable Interbank Offered Rate" shall
mean, with respect to any Eurodollar Rate Loan or Eurodollar Holder Funding for
the Interest Period applicable thereto, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Interbank Offered Rate" shall
mean, with respect to any Eurodollar Rate Loan or Eurodollar Holder Funding for
the Interest Period applicable thereto, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period, PROVIDED, HOWEVER; if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates.
"Interest Payment Loan" shall mean any Loan made to fund the payment of
Allocated Interest with respect to a Construction Period Property.
"Interest Period" shall mean, for each Eurodollar Loan and Eurodollar
Holder Fundings for a specified Property (a) prior to the Completion Date for
such Property, the period beginning on the date the first Eurodollar Loan (and
related Eurodollar Holder Funding) are extended, continued or converted pursuant
to the terms of the Operative Agreements and ending one month later, and
thereafter, the period commencing on the last day of the preceding Interest
Period and ending one month later, and (b) during the period from and after the
Completion Date for such Property, (i) initially, the period commencing on the
conversion or continuation date, as the case may be, with respect to such
Eurodollar Loan or Eurodollar Holder Funding and ending, in the
Appendix A-24
<PAGE>
case of any Eurodollar Loan or Eurodollar Holder Funding, one, two or three
months thereafter, as selected by the Borrower (in the case of a Eurodollar
Loan) or the Owner Trustee (in the case of a Eurodollar Holder Funding) in its
notice of borrowing, Funding, continuation or conversion, as the case may be,
given with respect thereto; and (ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such Eurodollar
Loan or Eurodollar Holder Funding and ending one, two or three months
thereafter, as selected by the Borrower by irrevocable notice to Administrative
Agent (in the case of a Eurodollar Loan) or by the Owner Trustee by irrevocable
notice to the Holders (in the case of a Eurodollar Holder Funding) in each case
not less than three Business Days prior to the last day of the then current
Interest Period with respect thereto; PROVIDED, HOWEVER, that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day (except
that where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (B) no Interest Period
shall extend beyond the Maturity Date, (C) where an Interest Period begins on a
day for which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month, and (D) from and after all the Commitment
Period, on any day the sum of the Interest Periods in effect under the Operative
Agreements for all Eurodollar Loans and Eurodollar Holder Funding shall not
exceed five (5) in the aggregate.
"Investment" shall have the meaning given to such term in SECTION 1.01
of the Existing Aviation Sales Credit Agreement.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, together with the rules and regulations promulgated thereunder.
"IRS" shall mean the United States Internal Revenue Service, or any
successor or analogous organization.
"Land" shall mean (a) a parcel or parcels of real property that is
described on (i) the Requisition issued by the Construction Agent on the
Property Closing Date relating to such parcel or (ii) Schedule I-C to each
applicable Lease Supplement executed and delivered in accordance with the
requirements of SECTION 2.4 of the Lease and, to the extent set forth in any
such Requisition or Schedule, may include without limitation a leasehold
interest (pursuant to a Ground Lease) in such Land, and (b) all Appurtenant
Rights with respect to such Land.
"Law" shall mean any statute, law, ordinance, code, regulation, rule,
directive, order, writ, injunction or decree of any Governmental Authority.
"Lease" or "Lease Agreement" shall mean the Lease Agreement dated as of
the Initial Closing Date, between the Lessor and the Lessee, together with any
Lease Supplements thereto, as such Lease Agreement may from time to time be
supplemented, amended, restated or modified in accordance with the terms
thereof.
Appendix A-25
<PAGE>
"Lease Default" shall mean any event or condition which, with the lapse
of time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" shall have the meaning specified in SECTION
17.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in
the form of Exhibit A to the Lease, together with all attachments and schedules
thereto, as such Lease Supplement may be supplemented, amended, restated or
modified from time to time.
"Leasing Affiliate Liabilities" shall have the meaning given to such
term in SECTION 1.01 of the Existing Aviation Sales Credit Agreement.
"Legal Requirements" shall mean all foreign, Federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Owner Trustee, the
Holders, the Agent, any Lender or any Improvements or the taxation, demolition,
construction, use or alteration of such Improvements, whether now or hereafter
enacted and in force, including without limitation any that require appraisals,
repairs, modifications or alterations in or to any Property or in any way limit
the use and enjoyment thereof (including all building, zoning and fire codes and
the Americans with Disabilities Act of 1990, 42 U.S.C. /section/ 12101 et seq.,
and any other similar Federal, state or local laws or ordinances and the
regulations promulgated thereunder) and any that may relate to environmental
requirements (including all Environmental Laws), and all permits, certificates
of occupancy, licenses, authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instruments which are either of record or known to the Lessee affecting any
Property or the Appurtenant Rights.
"Lender Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdiction in order to evidence or perfect the Agent's security
interest (for itself and on behalf of the Lenders) in any Equipment or in any
Improvements.
"Lenders" shall mean the several banks and other financial institutions
from time to time party to the Credit Agreement.
"Lessee" shall have the meaning set forth in the Lease.
"Lessor" shall mean the Owner Trustee, not in its individual capacity,
but as Lessor under the Lease.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the
Holder Fundings on any Scheduled Interest Payment Date pursuant to the Trust
Agreement (but not including interest on (i) any such scheduled Holder Yield due
on the Holder Fundings prior to the Basic Rent Commencement Date with respect to
the Property to which such Holder Fundings relate or (ii) overdue amounts under
the Trust Agreement or otherwise).
Appendix A-26
<PAGE>
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to evidence or perfect the Lessor's interest
under the Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor or
Trust Company, in its individual capacity, not resulting from the transactions
contemplated by the Operative Agreements, (b) any act or omission of the Lessor
or Trust Company, in its individual capacity, which is not required by the
Operative Agreements or is in violation of any of the terms of the Operative
Agreements, (c) any claim against the Lessor or Trust Company, in its individual
capacity, with respect to Taxes or Transaction Expenses against which the Lessee
is not required to indemnify Lessor or Trust Company, in its individual
capacity, pursuant to SECTION 13 of the Participation Agreement or (d) any claim
against the Lessor or Trust Company, in its individual capacity, arising out of
any transfer by the Lessor of all or any portion of the interest of the Lessor
in the Properties, the Trust Estate or the Operative Agreements other than the
transfer of title to or possession of any Properties by the Lessor pursuant to
and in accordance with the Lease, the Credit Agreement, the Security Agreement
or the Participation Agreement or pursuant to the exercise of the remedies set
forth in ARTICLE XVII of the Lease.
"Letter of Credit" shall mean that certain standby letter of credit
dated as of the Initial Closing Date, issued by Citicorp USA, Inc. in favor of
the Lessor and the Agent (for itself and on behalf of the Series A Lenders) and
securing the obligations of the Lessee and the Construction Agent under the
Operative Agreements, as such letter of credit may be amended, modified,
restated or supplemented from time to time.
"Liabilities and Costs" shall have the meaning given to such term in
SECTION 1.01 of the Existing Aviation Sales Credit Agreement.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, option or charge of any kind.
"Limited Recourse Amount" shall mean, with respect to any Properties on
an aggregate basis as of a specified date, an amount equal to the sum of the
Termination Values with respect to such Properties on such date, less the
Maximum Residual Guarantee Amount as of such date with respect to the
Properties.
"Loan Basic Rent" shall mean the interest due on the Loans on any
Scheduled Interest Payment Date pursuant to the Credit Agreement (but not
including interest on (i) any such Loan prior to the Basic Rent Commencement
Date with respect to the Property to which such Loan relates or (ii) any overdue
amounts under SECTION 2.8(C) of the Credit Agreement or otherwise).
"Loan Property Cost" shall mean, with respect to each Property at any
date of determination, an amount equal to (a) the aggregate principal amount of
Acquisition Loans, Construction Loans and Interest Payment Loans made on or
prior to such date with respect to
Appendix A-27
<PAGE>
such Property minus (b) the aggregate amount of prepayments or repayments as the
case may be of the Loans allocated to reduce the Loan Property Cost of such
Property pursuant to SECTION 2.6(C) of the Credit Agreement.
"Loans" shall mean, collectively, the Series A Loans and the Series B
Loans.
"Majority Lenders" shall mean at any time, Lenders whose Commitment
Percentages represent at least 51% of the aggregate Commitments.
"Marketing Period" shall mean, if the Lessee has given an Election
Notice in accordance with SECTION 20.1 of the Lease, the period commencing on
the date such Sale Notice is given and ending on the Expiration Date.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, condition (financial or otherwise) assets, liabilities or
operations of Aviation Sales or any of its Subsidiaries, (b) the ability of the
Lessee, the Construction Agent or any of their Subsidiaries to perform its
respective obligations under any Operative Agreement to which it is a party, (c)
the validity or enforceability of any Operative Agreement or the rights and
remedies of the Agent, the Lenders, the Holders, or the Lessor thereunder, (d)
the validity, priority or enforceability of any Lien on any Property created by
any of the Operative Agreements, or (e) the value, utility or useful life of any
Property or the use, or ability of the applicable Lessee to use, any Property
for the purpose for which it was intended.
"Maturity Date" shall mean December 17, 2003, or such earlier date as
the Lease may terminate.
"Maximum Amount" shall mean:
(a) one hundred percent (100%) of the cost of the Land or the
Ground Lease (as the case may be) for all, but not less than all, of
the Properties (collectively, the "Land Cost"), PLUS
(b) the product of eighty-nine and nine-tenths percent (89.9%)
multiplied by the following: (i) the aggregate Property Cost of all,
but not less than all, of the Properties, minus (ii) the Land Cost,
minus (iii) all structuring fees payable to NMS pursuant to the Fee
Letter, minus (iv) accrued, unpaid Holder Yield respecting any and all
Construction Period Properties, MINUS
(c) the accreted value (calculated at a rate of _______
percent (__%) per annum) of any payments previously made by the
Construction Agent or the Lessee regarding any and all Construction
Period Properties and not reimbursed; PLUS
(d) one hundred percent (100%) of all Rent and other amounts
then due and owing by the Lessee or the Construction Agent pursuant to
the Operative Agreements.
Appendix A-28
<PAGE>
"Maximum Property Cost" shall mean the aggregate amount of the Property
Costs for all Properties subject to the Lease as of the applicable determination
date.
"Maximum Residual Guarantee Amount", with respect to any Properties,
shall mean an amount equal to the sum of (a) eighty-eight percent (88%) of the
aggregate Property Cost for all of such Properties plus (b) one hundred percent
(100%) of all Rent and other amounts then due and owing by the Lessee or the
Construction Agent under the Lease and the other Operative Agreements.
"MIS" shall have the meaning given to such term in SECTION 1.01 of the
Existing Aviation Sales Credit Agreement.
"Modifications" shall have the meaning specified in SECTION 11.1(A) of
the Lease.
"Mortgage Instrument" shall mean any mortgage, deed of trust or any
other instrument executed by the Owner Trustee in favor of the Agent and
evidencing a Lien on a Property, in form and substance reasonably acceptable to
the Agent.
"Multiemployer Plan" shall mean any plan described in Section
4001(a)(3) of ERISA to which contributions are or have been made or are required
to be made by Aviation Sales or any of its Subsidiaries or ERISA Affiliates.
"National Accounting Firm" shall mean any of Arthur Andersen LLP,
Deloitte & Touch LLP, Ernst & Young LLP, KPMG Peat Marwick LLP or
PricewaterhouseCoopers LLP.
"NationsBank" shall mean NationsBank, National Association, a national
banking association.
"NMS" means NationsBanc Montgomery Securities, LLC.
"Net Proceeds" shall mean all amounts paid in connection with any
Casualty or Condemnation, and all interest earned thereon, less the expense of
claiming and collecting such amounts, including all costs and expenses in
connection therewith for which the Agent or Lessor is entitled to be reimbursed
pursuant to the Lease.
"Net Sale Proceeds Shortfall" shall mean the amount by which the
proceeds of a sale described in SECTION 22.1 of the Lease (net of all expenses
of sale) are less than the Limited Recourse Amount with respect to the
Properties if it has been determined that the Fair Market Sales Value of the
Properties at the expiration of the term of the Lease has been impaired by
greater than expected wear and tear during the Term of the Lease.
"Non-Excluded Taxes" shall have the meaning given to such term in
SECTION 2.13 of the Credit Agreement.
"Notes" shall mean, collectively, the Series A Notes and the Series B
Notes.
Appendix A-29
<PAGE>
"Occupational Safety and Health Law" shall mean the Occupational Safety
and Health Act of 1970 and any other federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating or relating to, or
imposing liability or standards of conduct concerning, employee health or
safety, as now or at any time hereafter in effect.
"Officer's Certificate" shall mean a certificate signed by any
individual holding the office of vice president or higher, which certificate
shall certify as true and correct the subject matter being certified to in such
certificate.
"Operating Lease" shall have the meaning given to such term in SECTION
1.01 of the Existing Aviation Sales Credit Agreement.
"Operative Agreements" shall mean, collectively, the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease (and a memorandum thereof in a form
reasonably acceptable to the Agent), each Lease Supplement (and a memorandum
thereof in a form reasonably acceptable to the Agent), the Guaranty Agreement,
the Security Agreement, the Letter of Credit, the Assignment of Project Rights,
each Ground Lease, each Mortgage Instrument, the Side Letter, the Bridge Note
and any agreements or documents related to the Bridge Note.
"Organizational Documents" shall have the meaning given to such term in
SECTION 1.01 of the Existing Aviation Sales Credit Agreement.
"Overdue Interest" shall mean any interest payable pursuant to SECTION
2.8(C) of the Credit Agreement.
"Overdue Rate" shall mean (i) with respect to Loan Basic Rent, and any
other amount owed under or with respect to the Credit Agreement or the Security
Documents, the rate specified in SECTION 2.8(C) of the Credit Agreement, (ii)
with respect to Lessor Basic Rent, the Holder Yield and any other amount owed
under or with respect to the Trust Agreement, the Holder Overdue Rate and (iii)
with respect to any other amount, the Base Rate plus 2%.
"Owner Trustee" shall mean First Security Bank, National Association,
not individually, except as expressly stated in the various Operative
Agreements, but solely as Owner Trustee under the Aviation Sales Trust 1998-1,
and any successor or replacement Owner Trustee expressly permitted under the
Operative Agreements.
"Participant" shall have the meaning given to such term in SECTION 9.7
of the Credit Agreement.
"Participation Agreement" shall mean the Participation Agreement dated
as of the date hereof among the Construction Agent, the Lessee, the Owner
Trustee, the Holders party thereto, the Lenders party thereto, and the
Administrative Agent, as amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms thereof.
Appendix A-30
<PAGE>
"Payment Date" shall mean any Scheduled Interest Payment Date and any
date on which interest or Holder Yield in connection with a prepayment of
principal on the Loans or of the Holder Fundings is due under the Credit
Agreement or the Trust Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation created by
Section 4002(a) of ERISA or any successor thereto.
"Permit" shall have the meaning given to such term in SECTION 1.01 of
the Existing Aviation Sales Credit Agreement.
"Permitted Equity Securities Options" shall have the meaning given to
such term in SECTION 1.01 of the Existing Aviation Sales Credit Agreement.
"Permitted Exceptions" shall mean:
(i) Liens of the types described in clauses (i), (ii) and (v)
of the definition of Permitted Liens;
(ii) Liens for Taxes not yet due; and
(iii) all encumbrances, exceptions, restrictions, easements,
rights of way, servitudes, encroachments and irregularities in title,
other than Liens which, in the reasonable assessment of the Agent,
materially impair the use of any Property for its intended purpose.
"Permitted Liens" shall mean:
(i) the respective rights and interests of the parties to the
Operative Agreements as provided in the Operative Agreements;
(ii) the rights of any sublessee or assignee under a sublease
or an assignment expressly permitted by the terms of the Lease;
(iii) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of SECTION 13.1 of the
Lease;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the
ordinary course of business, which Liens have been bonded (within 20
days of the earlier of the date of filing or the date of Lessee's
knowledge of such liens) for not less than the full amount in dispute
(or as to which other security arrangements satisfactory to the Lessor
and the Agent have been made), which bonding (or arrangements) shall
comply with applicable Legal Requirements, and shall have effectively
stayed any execution or enforcement of such Liens;
Appendix A-31
<PAGE>
(v) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest Taxes set forth in SECTION
13.1 of the Lease;
(vi) Liens in favor of municipalities to the extent agreed to
by the Lessor and the Agent; and
(vii) Permitted Exceptions.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company, limited liability partnership, governmental authority
or any other entity.
"Plan" shall have the meaning given to such term in SECTION 1.01 of the
Existing Aviation Sales Credit Agreement.
"Plans and Specifications" shall mean, with respect to Improvements,
the plans and specifications for such Improvements to be constructed or already
existing, as such Plans and Specifications may be amended, modified or
supplemented from time to time in accordance with the terms of the Participation
Agreement and the Agency Agreement.
"Prime Rate" shall mean the per annum rate of interest established from
time to time by NationsBank as its prime rate, which rate may not be the lowest
rate of interest charged by NationsBank to its customers.
"Property" shall mean, with respect to each real property site that is
acquired, constructed or renovated pursuant to the terms of the Operative
Agreements, the Land and each item of Equipment and the various Improvements, in
each case located on such Land. Notwithstanding any provision to the contrary in
this Participation Agreement or any other Operative Agreement, unless and until
this definition of "Property" is amended to permit more than one Property, there
shall be only one Property and such Property shall be located in Miramar,
Florida, and shall be suitable for use by the Lessee as a corporate headquarters
building and warehouse facility.
"Property Acquisition Cost" shall mean the cost to Lessor to purchase a
Property on a Property Closing Date.
"Property Closing Date" shall mean each date on which the Lessor
purchases a Property, or leases the Land included in a Property pursuant to a
Ground Lease.
"Property Cost" shall mean with respect to a Property the aggregate
amount of the Loan Property Cost plus the Holder Property Cost for such Property
(as such amounts shall be increased equally among all Properties respecting the
Holder Fundings and the Loans extended
Appendix A-32
<PAGE>
from time to time to pay for the Transaction Expenses, fees, taxes, expenses and
other disbursements referenced in SECTIONS 9.1(A) AND (B) of the Participation
Agreement and indemnity payments referenced in SECTION 13.5 of the Participation
Agreement).
"Purchase Option" shall have the meaning given to such term in SECTION
20.1 of the Lease.
"Purchase Option Price" shall have the meaning specified in SECTION
20.1 of the Lease.
"Purchasing Lender" shall have the meaning given to such term in
SECTION 9.8(A) of the Credit Agreement.
"Register" shall have the meaning given to such term in SECTION 9.9(A)
of the Credit Agreement.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leek, flow, discharge,
disposal or emission of a Hazardous Substance.
"Remedial Action" shall have the meaning given to such term in SECTION
1.01 of the Existing Aviation Sales Credit Agreement.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental
Rent, in each case payable under the Lease.
"Reportable Event" shall have the meaning specified in ERISA.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with SECTION 5 of the
Participation Agreement.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Requisition" shall have the meaning specified in SECTION 4.2 of the
Participation Agreement.
"Reserve Requirement" shall mean, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes
Appendix A-33
<PAGE>
deposits by reference to which the Eurodollar Rate is to be determined, or (ii)
any category of extensions of credit or other assets which include Eurodollar
Loans or Eurodollar Holder Fundings. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Requirement.
"Responsible Officer" shall mean the __________, __________ or
__________ of Aviation Sales or with respect to financial matters, the Chief
Financial Officer or ____________, of Aviation Sales except that when used with
respect to the Trust Company or the Owner Trustee, "Responsible Officer" shall
also include the Cashier, any Assistant Cashier, any Trust Officer or Assistant
Trust Officer, the Controller and any Assistant Controller or any other officer
of the Trust Company or the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his or her knowledge of and familiarity
with the particular subject.
"Restricted Junior Payment" shall have the meaning given to such term
in SECTION 1.01 of the Existing Aviation Sales Credit Agreement.
"Revolver Borrowers" means, collectively, Aviation Sales Operating
Company, Arocell Structures, Inc., AVS/Kratz Wilde Machine Company, Whitehall
Corporation and Triad International Maintenance Corporation.
"Sale Date" shall have the meaning given to such term in SECTION
22.1(A) of the Lease.
"Sale Notice" shall mean a notice given to Lessor in connection with
the election by Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in SECTION 20.1
of the Lease.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan (or Eurodollar Holder Funding), the last day of the Interest Period
applicable to such Eurodollar Loan (or Holder Funding), and if such Interest
Period is for more than three months, at intervals of three months after the
first day of such Interest Period and (b) as to any Base Rate Loan (or Base Rate
Holder Funding), the first day of each calendar quarter, and the date of
conversion of such Loan to a Eurodollar Loan (or conversion of such Holder
Funding to a Eurodollar Holder Funding), and (c) as to any Loan (or Holder
Funding), the Maturity Date.
"SEC" means the Securities and Exchange Commission of the United States
(or any successor).
"Securities" shall have the meaning given to such term in SECTION 1.01
of the Existing Aviation Sales Credit Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
Appendix A-34
<PAGE>
"Security Agreement" shall mean the Security Agreement dated as of the
Initial Closing Date between the Owner Trustee and NationsBank, National
Association, as agent, as such agreement may be amended, supplemented, restated
or otherwise modified from time to time in accordance with the terms thereof.
"Security Documents" shall mean the collective reference to the Lease,
the Lease Supplements, the Security Agreement, the Mortgage Instruments, and all
other security documents hereafter delivered to the Administrative Agent
granting a lien on any asset or assets of any Person to secure the obligations
and liabilities of the Borrower hereunder or under any of the other Credit
Documents or to secure any guarantee of any such obligations and liabilities.
"Senior Debt" shall mean collectively, the sum of, without duplication,
(a) "Senior Debt" as defined in the Subordinated Debt Indenture, and (b) the
Synthetic Lease Indebtedness. Nothing contained in this definition shall be
deemed to imply that any obligations under the Operative Agreements do not
constitute "Senior Debt" as defined in the Subordinated Debt Indenture.
"Series A Loans" shall mean the loans described as such in SECTION 2.1
of the Credit Agreement.
"Series A Notes" shall mean the promissory notes issued to the Lenders
pursuant to SECTION 2.2 of the Credit Agreement evidencing the Series A Loans.
"Series B Loans" shall mean the loans described as such in SECTION 2.1
of the Credit Agreement.
"Series B Notes" shall mean the promissory notes issued to the Lenders
pursuant to SECTION 2.2 of the Credit Agreement evidencing the Series B Loans.
"Side Letter" shall mean the Side Letter Agreement dated as of the
Initial Closing Date by the Lessee and the Construction Agent in favor of the
Agent, the Lenders, the Holders and the Owner Trustee.
"Subordinated Debt" shall mean 8 1/8% Senior Subordinated Notes, due
2008, as described more fully in the Subordinated Debt Prospectus (as amended or
modified from time to time) or the Subordinated Debt Indenture (as amended or
modified from time to time).
"Subordinated Debt Indenture" means that certain Indenture dated as of
February 17, 1998, among Aviation Sales, Aviation Sales Operating Company,
Aviation Sales Bearing Company, Aviation Sales Leasing Company, Aviation Sales
Finance Company, Aviation Sales Manufacturing & Repair Company, AVS/Kratz Wilde
Machine Company, Aerocell Structures, Inc., Apex Manufacturing, Inc., and
SunTrust Bank, Central Florida, National Association, as trustee, without regard
to any amendments to such Indenture after the date thereof.
Appendix A-35
<PAGE>
"Subordinated Debt Prospectus" means that certain Offering Memorandum
dated February 11, 1998, describing the Senior Debt, without regard to any
amendments to such Offering Memorandum after the date thereof. A copy of the
Subordinated Debt Prospectus is maintained by the Agent.
"Subsidiary" shall mean, as to any Person, any corporation or other
entity in which more than 50% of its outstanding voting stock or more than 50%
of all equity interests is owned directly or indirectly by such Person and/or by
one or more of such Persons's Subsidiaries.
"Supplemental Rent" shall mean all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to Lessor, the
Holders, the Agent, the Lenders or any other Person under the Lease or under any
of the other Operative Agreements including, without limitation, payments of the
Purchase Option Price, the Termination Value, the Deficiency Balance and the
Maximum Residual Guarantee Amount and all indemnification amounts, liabilities
and obligations.
"Synthetic Lease Agreements" means, collectively, (i) the Operative
Agreements, (ii) any other synthetic leases, and (iii) any other operative
documents in connection with any synthetic lease.
"Synthetic Lease Basic Rent" means, with respect to any Person that is
a lessee under any Synthetic Lease Agreements, (i) in the case of the Operative
Agreements, the Basic Rent, and (ii) in the case of any other Synthetic Lease
Agreements, the rent paid by such Person under such Agreement to the extent such
rent is intended to repay, or the amount of such rent is determined by reference
to, any interest on Indebtedness, or yield on equity, owed by the lessor under
such Synthetic Lease Agreements.
"Synthetic Lease Indebtedness" means, with respect to any Person that
is a lessee under any Synthetic Lease Agreements, (i) in the case of the
Operative Agreements, the aggregate Property Cost and (ii) in the case of any
other Synthetic Lease Agreements, the aggregate purchase price of any property
that the lessor under such Synthetic Lease Agreements acquired, through one or a
series of related transactions, and thereafter leased to such Person pursuant to
such Synthetic Lease Agreements. "Synthetic Lease Indebtedness" of Person shall
also include any guaranty by that Person of the Synthetic Lease Indebtedness of
any other Person.
"Tangible Personal Property" shall mean that portion of the Equipment
which is subject to the 5% limitation referred to in SECTION 10.3(E) of the
Participation Agreement.
"Taxes" shall have the meaning specified in the definition of
Impositions.
"Term" shall mean the Basic Term.
"Termination Date" shall have the meaning specified in SECTION 16.2(A)
of the Lease.
"Termination Notice" shall have the meaning specified in SECTION 16.1
of the Lease.
Appendix A-36
<PAGE>
"Termination Value" shall mean, as of any date of determination, the
sum of (a) either (i) with respect to all Properties, an amount equal to the
aggregate outstanding Property Cost for all the Properties, or (ii) with respect
to a particular Property, an amount equal to the outstanding Property Cost
allocable to the particular Property in question, plus (b) respecting the
amounts described in each of the foregoing subclause (i) or (ii), as applicable,
any and all accrued interest on the Loans and any and all Holder Yield on the
Holder Advances related to the applicable Property Cost, plus (c) to the extent
not otherwise paid on such date of determination, all other Rent and other
amounts then due and payable for all Properties under the Agency Agreement, the
Lease or any other Operative Agreement (including without limitation all amounts
due and payable under SECTIONS 13.1 or 13.2 of the Participation Agreement and
all costs and expenses referred to in clause FIRST of SECTION 22.2 of the
Lease).
"Total Commitment" shall mean (a) with respect to the Series A Loans,
$31,252,056, and (b) with respect to the Series B Loans, $3,196,233.
"Total Condemnation" shall mean a Condemnation that involves a taking
of Lessor's entire title to a Property.
"Total Holder Commitment" shall mean $1,065,411.
"Transaction Expenses" shall mean all costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Agreements and the transactions contemplated by the Operative Agreements
including without limitation:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative
Agreements and the other transaction documents, preparing for the
closings under, and rendering opinions in connection with, such
transactions and in rendering other services customary for counsel
representing parties to transactions of the types involved in the
transactions contemplated by the Operative Agreements;
(b) any and all reasonable fees, charges or other amounts
payable to the Lenders, Agent, the Holders, the Owner Trustee or any
broker which arise under any of the Operative Agreements;
(c) any other reasonable fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any of
the other transaction documents;
(d) any and all Taxes and fees incurred in recording or filing
any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing
statement with any public office, registry or governmental agency in
connection with the transactions contemplated by the Operative
Agreement; and
(e) real estate taxes on a Property paid during the
Construction Period.
Appendix A-37
<PAGE>
"Trust Agreement" shall mean the Trust Agreement dated as of the
Initial Closing Date between the Holders and the Owner Trustee, as such
agreement may be amended, modified, restated or supplemented from time to time
in accordance with the terms thereof.
"Trust Company" shall mean First Security Bank, National Association in
its individual capacity, and any successor owner trustee under the Trust
Agreement, in each case in its individual capacity.
"Trust Estate" shall have the meaning specified in SECTION 2.2 of the
Trust Agreement.
"Type" shall mean, as to any Loan, whether it is a Base Rate Loan or a
Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Lender Financing
Statements and the Lessor Financing Statements.
"Unfunded Amount" shall have the meaning specified in SECTION 3.2 of
the Agency Agreement.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"United States Bankruptcy Code" shall mean Title 11 of the United
States Code.
"Unused Fee" shall mean, at any time, the product of (a) the Applicable
Unused Fee Rate, MULTIPLIED BY (b) the average daily amount by which (i) the
aggregate Commitments of the Lenders for all Categories of Loans (under the
Operative Agreements) exceeds (ii) the outstanding principal amount of all
Categories of Loans.
"Unused Fee Payment Date" shall mean last Business Day of each March,
June, September and December and the last day of the Commitment Period, or such
earlier date as the Commitments shall terminate as provided in the Credit
Agreement.
"U.S." shall mean the United States of America, its territories, its
possessions and all other areas subject to its jurisdiction.
"Voting Stock" shall mean, with respect to any Person, capital stock
issued by a corporation or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to vote for
the election of directors (or persons performing similar functions) of such
Person, even though the right to vote may have been suspended by the happening
of such a contingency.
"Work" shall mean the furnishing of labor, materials, components,
furniture, furnishings, fixtures, appliances, machinery, equipment, tools,
power, water, fuel, lubricants, supplies, goods or services with respect to any
Property.
Appendix A-38
EXHIBIT 10.6
AMENDMENT NO. 4
AND CONSENT
Dated as of December 15, 1998
to
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 17, 1997
This Amendment No. 4 and Consent ("Agreement") dated as of December 15,
1998 is entered into among AVIATION SALES DISTRIBUTION SERVICES COMPANY, a
Delaware corporation ("ASDC"), AEROCELL STRUCTURES, INC., an Arkansas
corporation ("Aerocell"), AVS/KRATZ-WILDE MACHINE COMPANY, a Delaware
corporation ("Kratz-Wilde"), WHITEHALL CORPORATION, a Delaware corporation
("Whitehall"), TRIAD INTERNATIONAL MAINTENANCE CORPORATION, a Delaware
corporation ("TIMCO"), APEX MANUFACTURING, INC., an Arizona corporation
("Apex"), CARIBE AVIATION, INC., a Florida corporation ("Caribe"), AIRCRAFT
INTERIOR DESIGN, INC., a Florida corporation ("Design"), AERO CORPORATION, a
Florida corporation "Aero Florida"), and AERO CORP MACON, INC., a Delaware
corporation ("Aero Macon")(ASDC, Aerocell, Kratz-Wilde, Whitehall, TIMCO, Apex,
Caribe, Design, Aero Florida and Aero Macon being collectively referred to as
the "Borrowers" and each individually, a "Borrower") and the "Lenders" (as
defined in the Credit Agreement identified below) signatory hereto. Capitalized
terms used herein without definition are used herein as defined in the Credit
Agreement.
PRELIMINARY STATEMENT:
WHEREAS, the Borrowers, Citicorp USA, Inc., as Agent, and certain
financial institutions, as Lenders and Issuing Bank, are parties to that certain
Third Amended and Restated Credit Agreement dated as of October 17, 1997, as
heretofore amended (the "Credit Agreement");
WHEREAS, Parent has heretofore (i) effected certain changes in its
corporate structure as permitted by certain consents heretofore delivered under
the terms of the Credit Agreement and that certain Amendment No. 2 and Consent
dated as of September 18, 1998 ("Amendment No. 2"), and (ii) incurred certain
Indebtedness under senior subordinated notes issued pursuant to a certain
Indenture dated as of February 17, 1998 (the "Indenture"), which Indebtedness is
guaranteed by the Borrowers and the Guarantors, as permitted by certain consents
heretofore delivered under the terms of the Credit Agreement;
<PAGE>
WHEREAS, Parent intends to (i) effect certain additional changes in its
corporate structure pursuant to which it is intended that (a) Parent will form a
new Delaware corporation as a wholly-owned Subsidiary of Parent ("AVS Property
Management"), (b) Whitehall and AVS Property Management will organize a new
Delaware limited partnership ("AVSRE, Ltd.") in which Whitehall will hold a 99%
limited partnership interest and AVS Property Management will hold a 1% general
partnership interest, (c) Whitehall will transfer title to all of its Property
(real and personal) located in the State of Texas to AVSRE, Ltd., and (d) Aero
Florida and Aero Macon will merge with and into TIMCO and (ii) complete the
transfer of the issued and outstanding Capital Stock of Aero Hushkit Corporation
by Whitehall to Leasing Affiliate or a Subsidiary thereof as contemplated by the
consent granted in Amendment No. 2;
WHEREAS, Parent may issue additional senior subordinated notes under
the Indenture in an aggregate amount of up to $85,000,000 thereby increasing the
principal amount of Indebtedness outstanding under the Indenture to an aggregate
of up to $250,000,000, which increased Indebtedness will be guaranteed by the
Borrowers and Guarantors on the same terms and conditions that the Indebtedness
outstanding under the Indenture heretofore has been guaranteed thereby;
WHEREAS, Parent is entering into a certain synthetic lease transaction
pursuant to which Parent, the Borrowers and the Guarantors will be required to
execute and deliver certain unsecured guarantees of obligations incurred in
connection therewith;
WHEREAS, Parent requires Restricted Junior Payments from its
Subsidiaries to enable it to meet its obligations (i) with respect to
Indebtedness outstanding under the Indenture as the same may be amended or
supplemented to increase the Indebtedness issued thereunder as aforesaid and
(ii) under the lease agreement to be executed and delivered in connection with
the above-described synthetic lease transaction;
WHEREAS, Parent and the Borrowers have requested that the Credit
Agreement be amended to permit the foregoing and the transactions attendant to
the synthetic lease be afforded a consent by the Requisite Lenders;
WHEREAS, ASDC intends to transfer all of its Receivables existing on
December 31, 1998 to Aerocell in exchange for a promissory note payable by
Aerocell to ASDC and the Borrowers have requested the consent of the Requisite
Lenders to such transfer;
2
<PAGE>
WHEREAS, the parties hereto have agreed to amend the Credit Agreement
as set forth below in SECTION 1 and the Lenders a party hereto have agreed to
consent to certain matters as set forth below in SECTION 2, in each instance,
subject to the terms and conditions stated herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. Effective as of December
15, 1998, subject to the satisfaction of the conditions precedent set forth in
SECTION 3 hereof, the Credit Agreement is hereby amended as follows:
1.1 SECTION 1.01 is amended to add the following definitions thereto:
"SENIOR SUBORDINATED NOTES" means the 8-1/8% Senior Subordinated Notes
due 2008 in an aggregate principal amount of up to $250,000,000 issued
by the Parent under that certain Indenture dated as of February 17,
1998, as the same may be amended or supplemented with respect to the
principal amount of Indebtedness issued thereunder, between the Parent
and SunTrust Bank, Central Florida, National Association, as trustee.
"SENIOR SUBORDINATED NOTES GUARANTIES" means, collectively, the
unsecured guaranties of payment of the Senior Subordinated Notes
executed by the Borrowers and Guarantors.
"TROL DOCUMENTS" means, collectively, the TROL Guaranties, TROL
Participation Agreement, TROL Lease, Agency Agreement between the
Parent, as construction agent and First Security Bank, National
Association, as owner trustee under the Aviation Sales Trust 1998-1, as
lessor, and Credit Agreement among First Security Bank, National
Association, as owner trustee for the Aviation Sales Trust 1998-1, as
borrower, the lender parties thereto and NationsBank, National
Association as administrative agent for such lender parties, in each
instance dated as of December 16, 1998.
"TROL GUARANTIES" means, collectively, (i) the unsecured guaranties of
payment of certain Indebtedness evidenced by Series A Notes issued by
First Security Bank, National Association, as trustee under Aviation
Sales Trust 1998-1, a trust formed under the laws of the State of
Florida, executed and delivered by Parent, Borrowers and all of the
other Subsidiaries of the Parent, with the exception of Aviation Sales
Company FSC, Ltd. and Aviation Sales SPS I, Inc., and (ii) the
unsecured guaranty of payment and performance of Parent's obligations
under the TROL Lease executed and delivered by the Borrowers and such
other Subsidiaries of the Parent, in each instance, in the form
attached hereto as EXHIBIT O and made a part hereof.
"TROL LEASE" means a lease agreement in the form attached hereto as
EXHIBIT P and made a part hereof entered into by and between Parent, as
lessee, and First Security
3
<PAGE>
Bank, National Association, as trustee under Aviation Sales Trust
1998-1, a trust formed under the laws of the State of Florida, as
lessor.
"TROL PARTICIPATION AGREEMENT" means an agreement in the form attached
hereto as EXHIBIT Q and made a part hereof executed and delivered by
Parent.
1.2 SECTION 10.05 is amended to delete CLAUSE (E) thereof in its
entirety and substitute the following therefor:
(e) Accommodation Obligations evidenced by the Senior Subordinated
Notes Guaranties and the TROL Guaranties; and
(f) in addition to the Accommodation Obligations permitted by CLAUSES
(A) through (E) above, other unsecured Accommodation Obligations in an
aggregate amount not to exceed $1,000,000 at any time outstanding.
1.3 SECTION 10.06 is amended to (i) delete the reference to
"Intentionally omitted" at CLAUSE (D) thereof and substitute the following
therefor:
(d) dividends or other distributions (directly or indirectly) from
Subsidiaries of the Parent to the Parent in such amounts and at such
times as are required to enable the Parent to meet (i) its obligations
under the Senior Subordinated Notes and (ii) its lease, guaranty, and
other obligations under the TROL Lease, the TROL Guaranty executed and
delivered by it, and the TROL Participation Agreement, respectively;
and
and (ii) to delete the proviso at the end of such SECTION 10.06 in its entirety
and substitute the following therefor:
PROVIDED, HOWEVER, the Restricted Junior Payments described in CLAUSES
(A), (D) and (E) above shall not be permitted after the occurrence and
during the continuance of an Event of Default or a Potential Event of
Default or if an Event of Default or a Potential Event of Default would
result therefrom.
1.4 SECTION 10.17(F) is amended to delete the provisions thereof in
their entirety and substitute the following therefor:
(f) grant or suffer to exist any Lien against any property or asset of
the Parent other than Liens securing the Obligations and an assignment
of its leasehold interest under the TROL Lease to secure its
obligations under the TROL Documents.
1.5 SECTION 12.01(E) is amended to add the following as CLAUSE (IV)
thereof:
(iv) Any "Event of Default" as defined in the Indenture or any TROL
Document shall occur and be continuing.
4
<PAGE>
SECTION 2. CONSENTS AND WAIVER. The Lenders a party hereto hereby:
2.1 Consent to ASOC's transfer all of its Receivables existing on
December 31, 1998 to Aerocell in exchange for a promissory note payable by
Aerocell to ASOC; PROVIDED, THAT all Receivables transferred to Aerocell by ASOC
are transferred back to ASOC on or before January 5, 1999 subject to no Lien and
written confirmation thereof is delivered to the Agent on the date of such
transfer;
2.2 Consent to the completion of the transfer of the issued and
outstanding Capital Stock of Aero Hushkit Corporation by Whitehall to Leasing
Affiliate or a Subsidiary thereof as contemplated by the consent granted in
Amendment No. 2 by December 31, 1998 and waive any rights and remedies that
might otherwise arise under the terms of Amendment No. 2 with respect to the
failure to complete such transfer within the period required under the terms of
Amendment No. 2;
2.3 Consent to the formation of AVS Property Management by Parent as a
wholly-owned Subsidiary of the Parent and the formation by AVS Property
Management and Whitehall of AVSRE, Ltd., as a Delaware limited partnership with
Whitehall holding a 99% limited partnership interest therein and AVS Property
Management holding a 1% general partnership interest therein;
2.4 Consent to (a) the transfer by Whitehall of all of its right, title
and interest in and to all of its Property (real and personal) located in the
State of Texas to AVSRE, Ltd. in exchange for its partnership interest therein;
PROVIDED THAT all of the Lenders execute and deliver this Agreement as and when
provided in Section 3 below, and (b) the Investment by AVS Property Management
of an amount equal to 1% of the value of the aforesaid Property of Whitehall in
AVSRE, Ltd. in exchange for its partnership interest therein;
2.5 Consent to the merger of Aero Florida and Aero Macon with and into
TIMCO by December 31, 1998 and waive the requirement under SECTION 10.14 of the
Credit Agreement for sixty (60) days prior written notice of a change in the
name of TIMCO PROVIDED THAT any such change is made in connection with the
changes in corporate structure described in this Agreement and the Agent
receives written notice thereof at least five (5) Business Days prior to such
change becoming effective;
2.6 Consent to the Borrowers and Guarantors entering into the TROL
Guaranties notwithstanding any provision to the contrary contained in Credit
Agreement or the guaranty agreement executed and delivered to the Agent in
connection with any Guarantor's guarantee of payment and performance of the
Obligations;
2.7 Consent to the Parent's incurrence of up to $85,000,000 of
additional Indebtedness under the Indenture and the Borrowers' and Guarantors'
guarantee thereof; PROVIDED THAT the aggregate principal amount of Indebtedness
issued under the Indenture does not exceed $250,000,000; and
5
<PAGE>
2.8 Waive any rights and remedies that might otherwise arise under the
terms of the Credit Agreement or other Loan Document executed and delivered by
the Borrowers and Guarantors with respect to the making of a Restricted Junior
Payment to Parent to enable it to pay interest on the Senior Subordinated Notes
which was due August 15, 1998.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall become effective as of December 15, 1998, if, and only if
the Agent shall have received (i) on or before December 16, 1998, (a) a
facsimile or original executed copy of this Agreement executed by the Parent,
each Borrower and the Requisite Lenders (except with respect to the consent set
forth in Section 2.4(a) which requires the consent of all Lenders), (b) a
Reaffirmation Agreement, in form and substance satisfactory to the Agent,
executed by each of the Guarantors which are Subsidiaries of the Parent or a
Borrower, and (c) corporate resolutions and a secretary's certificate with
respect thereto for each of the Borrowers and Guarantors a party to this
Agreement or the aforesaid Reaffirmation Agreement authorizing the execution and
delivery of such agreements on behalf of such Persons, (ii) on December 17,
1998, a fully executed facsimile or original executed copy of an Intercreditor
Agreement in the form attached hereto as EXHIBIT 1 and made a part hereof and a
certificate, signed by the Chief Financial Officer of the Parent, in the form
attached hereto as EXHIBIT 2 and (iii) promptly upon the formation of AVS
Property Management and AVSRE, Ltd., guarantees of the Obligations and related
security agreements, mortgages, UCC financing statements, and other Loan
Documents as the Agent shall designate in substantially the form of the like
agreements executed and delivered by the Guarantors and the Borrowers executed
and delivered by AVS Property Management and AVSRE, Ltd.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
represent and warrant as follows:
4.1 This Agreement and the Credit Agreement as previously executed and
delivered and as amended hereby constitute legal, valid and binding obligations
of the Borrowers and are enforceable against the Borrowers in accordance with
their terms.
4.2 No Event of Default or Potential Event of Default exists, except as
referenced in Sections 2.5 and 2.8 above, or would result from any of the
transactions contemplated by this Agreement.
4.3 Upon the effectiveness of this Agreement, each Borrower hereby
reaffirms all covenants, representations and warranties made by it in the Credit
Agreement to the extent the same are not amended hereby and agree that all such
covenants, representations and warranties shall be deemed to have been remade as
of the date this Agreement becomes effective (unless a representation and
warranty is stated to be given on and as of a specific date, in which case such
representation and warranty shall be true, correct and complete as of such
date).
SECTION 5. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
6
<PAGE>
5.1 Upon the effectiveness of this Agreement, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of like import shall mean and be a reference to the Credit Agreement, as amended
hereby, and each reference to the Credit Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended
hereby.
5.2 Except as specifically amended above, the Credit Agreement, the
Notes and all other Loan Documents shall remain in full force and effect and are
hereby ratified and confirmed.
7
<PAGE>
5.3 The execution, delivery and effectiveness of this Agreement shall
not operate as a waiver of any right, power or remedy of any Lender or Issuing
Bank or the Agent under the Credit Agreement, the Notes or any of the other Loan
Documents, nor constitute a waiver of any provision contained therein, except as
specifically set forth herein.
SECTION 6. EXECUTION IN 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 but one and the
same instrument. Delivery of an executed counterpart of this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 7. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 8. HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
<TABLE>
<S> <C>
AVIATION SALES DISTRIBUTION AEROCELL STRUCTURES, INC.
SERVICES COMPANY
By By
---------------------------------- ---------------------------------
Joseph E. Civiletto Joseph E. Civiletto
Chief Financial Officer Chief Financial Officer
AVS/KRATZ-WILDE MACHINE COMPANY WHITEHALL CORPORATION
By By
---------------------------------- ---------------------------------
Joseph E. Civiletto Joseph E. Civiletto
Chief Financial Officer Chief Financial Officer
TRIAD INTERNATIONAL MAINTENANCE APEX MANUFACTURING, INC.
CORPORATION
By By
---------------------------------- ---------------------------------
Joseph E. Civiletto Joseph E. Civiletto
Chief Financial Officer Chief Financial Officer
AIRCRAFT INTERIOR DESIGN, INC. CARIBE AVIATION, INC.
By By
---------------------------------- ---------------------------------
Joseph E. Civiletto Joseph E. Civiletto
Chief Financial Officer Chief Financial Officer
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
AERO CORPORATION AERO CORP MACON, INC.
By By
---------------------------------- ---------------------------------
Joseph E. Civiletto Joseph E. Civiletto
Chief Financial Officer Chief Financial Officer
AVIATION SALES COMPANY
By
----------------------------------
Joseph E. Civiletto
Chief Financial Officer
CITICORP USA, INC. HELLER FINANCIAL, INC.
By By
---------------------------------- ---------------------------------
Shapleigh B. Smith Albert J. Forzano
Attorney-in-Fact Vice President
CONGRESS FINANCIAL CORPORATION NATIONAL CITY COMMERCIAL
FINANCE, INC.
By By
---------------------------------- ---------------------------------
Name: Name:
Title: Title:
FIRST UNION COMMERCIAL CREDIT LYONNAIS, ATLANTA
CORPORATION AGENCY
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
By By
---------------------------------- ---------------------------------
Terri K. Lins David M. Cawrse
Vice President First Vice President & Manager
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
IBJ SCHRODER BUSINESS CREDIT BANKBOSTON, N.A.
CORPORATION
By By
---------------------------------- ---------------------------------
Thomas M. Bayer Tony Zhang
Executive Vice President Vice President
SUNTRUST BANK, MIAMI, N.A. BANKATLANTIC
By By
---------------------------------- ---------------------------------
Carol F. Fine Ana C. Bolduc
Vice President Senior Vice President
THE INTERNATIONAL BANK OF NATIONAL BANK OF CANADA
MIAMI, N.A. A Canadian Chartered Bank
By By
---------------------------------- ---------------------------------
Caridad C. Errazquin Frank H. D'Alto
Vice President Vice President
Trade Finance Division
By
----------------------------------
Michael S. Bloomenfeld
Vice President & Manager
MERCANTILE BUSINESS CREDIT, INC. CITIZENS BUSINESS CREDIT
COMPANY
By By
---------------------------------- ---------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
Robert H. Newman Ralph L. Letner
Senior Vice President Vice President
AMSOUTH BANK PNC BANK NATIONAL ASSOCIATION
By By
---------------------------------- ---------------------------------
Joseph Huston Colleen A. Logan
Attorney-in-Fact Vice President
</TABLE>
13
