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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT
TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 001-13973
UNICAPITAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
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DELAWARE 65-0788314
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
10800 BISCAYNE BOULEVARD, SUITE 800, MIAMI, FLORIDA 33161
(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code: (305) 899-5000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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Title of Each Class Name of Each Exchange on Which Registered
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NONE NOT APPLICABLE
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Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of March 19, 1999, the aggregate market value of voting common stock
held by non-affiliates of the registrant, based upon the last reported sale
price for the registrant's Common Stock on the New York Stock Exchange on such
date, as reported in The Wall Street Journal, was $256,855,590 (calculated by
excluding shares owned beneficially by directors and executive officers as a
group from total outstanding shares solely for the purpose of this response).
The number of shares of the registrant's Common Stock outstanding as of the
close of business on March 19, 1999 was 52,505,323.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the definitive Proxy Statement of UniCapital
Corporation to be used in connection with the 1999 Annual Meeting of
Stockholders (the "Proxy Statement") are incorporated by reference into Part III
of this Annual Report on Form 10-K to the extent provided herein. Except as
specifically incorporated by reference herein, the Proxy Statement is not to be
deemed filed as part of this Annual Report on Form 10-K.
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PART I
ITEM 1. BUSINESS
Certain statements contained in this Annual Report on Form 10-K ("Form
10-K") constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements generally can be
identified by the use of forward-looking terminology such as "may," "will,"
"intend," "estimate," "anticipate," "believe," or "continue" or the negative
thereof or variations thereon or similar terminology. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from possible future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general economic
and business conditions; changes in interest rates; changes in asset values;
inflation or deflation; changes in markets for financial products, including
securitized assets; changes in political, social and economic conditions and
local regulations; changes in, or failure to comply with, government
regulations; demographic changes; changes in the mix of sources of revenues;
competition; changes in business strategy or development plans; availability of
capital sufficient to meet the Company's need for capital or on terms or at
times acceptable to the Company; availability of qualified personnel; and
various other factors referenced in this Form 10-K. The Company assumes no
obligation to update any forward-looking statements to reflect actual results or
changes in the factors affecting such forward-looking statements.
Forward-looking statements contained in this Form 10-K address, among other
things: (a) absence of combined operating history; (b) expectations regarding
the availability and cost of capital; (c) the ability of the Company to effect
securitizations at any time or from time to time; (d) the availability of
trained management personnel at the operating subsidiary level; (e) expectations
regarding the Company's acquisition strategy, including the integration of
acquired businesses; (f) the availability of resources to carry out the
Company's planned acquisition program and the Company's business strategy; and
(g) expectations regarding the Company's intention to retain a greater portion
of the leases that it originates or acquires for its own portfolio. See "Factors
that May Affect Future Operating Results" beginning on page 9 for a more
detailed discussion of these and other factors which could cause actual results
to differ materially from those expressed or implied by any forward-looking
statements.
OVERVIEW
UniCapital was founded in October 1997 as a Delaware corporation. We
commenced operations in May 1998 in conjunction with the consummation of our
initial public offering and the acquisition of twelve equipment leasing,
specialty finance and related businesses. In June, July and August 1998, we
completed the acquisition of five additional equipment leasing, specialty
finance and related businesses. We engage in asset-based financing in
strategically diverse sectors of the equipment leasing industry. We originate,
acquire, sell and service equipment leases and arrange structured financings in
the big ticket, computer and telecommunications equipment, middle market and
small ticket areas of the equipment leasing and specialty finance industry. We
also provide lease administration and processing services for many of the leases
that we originate. Our leases and structured financing arrangements cover a
broad range of equipment, including aircraft and aircraft engines, computer and
telecommunications equipment, construction and manufacturing equipment, office
equipment, tractor trailers, printing equipment, car washes and petroleum retail
equipment and vending machines. We generally fund the acquisition or origination
of leases
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through warehouse credit facilities or through recourse or non-recourse
financing and we either retain the leases for our own account or sell them.
For the year ending December 31, 1998, we had four reportable operating
segments, which are based primarily on the nature of the products and services
provided by each segment. These operating segments are:
- Air Group;
- Aircraft Engine Group;
- Technology and Finance Group; and
- Business Credit Group.
We also have a Corporate Division, which consists of our corporate
operations and our lease administration and servicing operations. For
information about each segment's revenues, expenses and income, see Note 17 to
our consolidated financial statements for the year ended December 31, 1998,
included elsewhere in this Form 10-K.
BIG TICKET LEASING. Big ticket leases, which are customized financing
transactions, are typically for equipment with a purchase price in excess of
$5.0 million, such as aircraft, aircraft engines, and rail and other
transportation equipment. Our Big Ticket Division includes the UniCapital Air
Group, the UniCapital Aircraft Engine Group and the recently formed UniCapital
Rail Group.
UniCapital Air Group provides customized operating lease financing for
commercial passenger and cargo jet aircraft and offers brokerage, advisory and
remarketing services to domestic and foreign commercial airlines, aircraft
lessors and institutional investors. Specializing in 6- to 12-year-old
commercial jet aircraft, UniCapital Air Group's financing professionals have
more than 50 years of combined experience and have completed more than $3
billion in financing transactions.
UniCapital Aircraft Engine Group purchases, refurbishes, sells and leases
commercial aircraft engines and provides a broad range of engine management
services to airlines, financial institutions and other operating lessors.
UniCapital Aircraft Engine Group's management team has more than 45 years of
combined experience in the aircraft engine business.
UniCapital Rail Group, which was formed in December 1998, will purchase,
finance and remarket railcars, including tank and specialty freight cars,
intermodal equipment and low-, medium- and high-horsepower locomotives.
UniCapital Rail Group will also offer lease financing and sale-leasebacks to
Class I, regional and short-line railroads and private shippers in North
America.
TECHNOLOGY AND FINANCE GROUP. Our technology and finance group includes
middle market leasing and computer and telecommunications leasing. Middle market
leases generally include those leases for equipment with a purchase price
ranging from $250,000 to $5.0 million. We provide lease and secured financing
for a variety of equipment, including computer, communication and electronic
equipment, printing presses and other manufacturing equipment to businesses
throughout the United States. Our computer and telecommunications leasing
operations provide lease financing, and other value-added services, such as
installation and configuration, for computer and telecommunications equipment,
including leasing for mainframe, mid-range and personal computers, workstations,
servers, telephone systems, switches, networks, peripherals and related
high-technology equipment to Fortune 1000 companies and other large and middle
market companies, throughout the United States and Canada.
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Our Technology and Finance Group also arranges structured financing
primarily for community-based mental health/mental retardation facilities and
correctional facilities. Our subsidiary, Municipal Capital Markets Group, Inc.,
is a registered broker-dealer and places the bonds and leases that it arranges
primarily with institutional investors.
BUSINESS CREDIT GROUP. Our Business Credit Group provides small ticket
lease financing, which generally includes those leases for equipment with a
purchase price of less than $250,000. We provide lease financing for a variety
of equipment, including heavy machinery, computer systems and related office
technology equipment, petroleum retail equipment, including car washes, fuel
dispensers and convenience store operating equipment, and vending equipment to
lessees in a variety of businesses throughout the United States.
INDUSTRY OVERVIEW
The equipment leasing and specialty finance industry in the United States
has grown consistently during the last decade and includes a wide range of
entities that provide funding for the purchase or use of equipment. The
equipment leasing industry in the United States is a significant factor in
financing capital expenditures of businesses. According to estimates of the
Equipment Leasing Association (the "ELA"), from 1997 to 1998, equipment placed
on lease grew by approximately $4 billion from $180 billion to an estimated $184
billion. The 1997 investment in equipment placed on lease represents an increase
of approximately 90% from comparable 1986 data. The ELA estimates that 80% of
all U.S. businesses currently use leasing or financing to acquire capital
assets.
We believe that the equipment leasing industry is growing in part due to
(i) the consolidation of the banking industry, which has eliminated many of the
smaller community banks that traditionally provided equipment financing for
small to mid-size businesses, (ii) stricter lending requirements imposed by
commercial banks, (iii) a trend toward rapid credit approvals at the point of
sale made possible by improved technology, and (iv) the adoption of accounting
pronouncements concerning the accounting treatment of transactions with captive
finance company subsidiaries, which has caused a number of manufacturers to
eliminate their finance companies, resulting in an increased demand for
independent financing. According to the ELA, two primary factors contributing to
the favorable funding environment experienced by the commercial leasing industry
are a better understanding of the leasing business by bank regulators and a
growing understanding of the leasing industry by the investment community and
the rating agencies.
1998 ACQUISITIONS
At the time of the consummation of our initial public offering in May 1998,
and thereafter in June, July and August 1998, we acquired the following
businesses.
- AIR GROUP
Cauff Lippman Aviation, Inc., a big ticket leasing business with
headquarters in Miami, Florida, which was acquired on May 20, 1998, provides
operating lease financing for used commercial jet aircraft and jet aircraft
engines, as well as brokering, advisory and remarketing services to domestic and
foreign commercial airlines, aircraft lessors and institutional investors and
engages in the purchase and sale of aircraft for its own account.
Jumbo Jet (which includes Jumbo Jet Leasing LP, Jumbo Jet, Inc., CL
Aircraft Marketing LP and CL Aircraft Marketing, Inc.), a big ticket leasing
business with headquarters in Miami, Florida, which was acquired on June 30,
1998, provides lease financing for the acquisition of used commercial aircraft.
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The NSJ Group, Inc., a big ticket leasing business with headquarters in
Orlando, Florida, which was acquired on May 20, 1998, provides lease financing
for used commercial jet aircraft and jet aircraft engines to domestic and
foreign commercial airlines and engages in the purchase and sale of aircraft for
its own account.
- AIRCRAFT ENGINE GROUP
United States Turbine Engine Corp. (now UniCapital Aircraft Engine Group,
Inc.), a big ticket leasing business with headquarters in Norwalk, Connecticut,
which was acquired on July 27, 1998, engages in the purchase, refurbishment,
sale and lease of commercial aircraft engines and provides a broad range of
engine management services to airlines, financial institutions and other
operating lessors.
- TECHNOLOGY AND FINANCE GROUP
American Capital Resources, Inc., a middle market leasing business with
headquarters in Hackensack, New Jersey, which was acquired on May 20, 1998,
provides lease and secured financing for equipment, primarily printing presses,
to companies in the printing, packaging and paper converting industries.
Jacom Computer Services, Inc., a computer and telecommunications equipment
leasing business with headquarters in Northvale, New Jersey, which was acquired
on May 20, 1998, provides lease financing for computer and telecommunications
equipment to large and middle market companies, including financial
institutions, throughout the United States.
Matrix Funding Corporation, a middle market leasing business with
headquarters in Midvale, Utah, which was acquired on May 20, 1998, provides
lease financing for a variety of equipment, primarily computer, communication
and electronic equipment, to companies throughout the United States.
Municipal Capital Markets Group, Inc., a middle market leasing business
with headquarters in Dallas, Texas, which was acquired on May 20, 1998, arranges
structured financing, primarily for community-based mental health/mental
retardation facilities and correctional facilities.
Varilease Corporation, a computer and telecommunications equipment leasing
business with headquarters in Walled Lake, Michigan, which was acquired on May
20, 1998, provides lease financing for computer and telecommunications equipment
to Fortune 1000 companies and other businesses throughout the United States and
Canada.
The Walden Asset Group, Inc., a middle market leasing business with
headquarters in Wellesley, Massachusetts, which was acquired on May 20, 1998,
provides lease financing for a variety of equipment, including communications,
computer and manufacturing equipment, to Fortune 500 and other businesses
throughout the United States.
- BUSINESS CREDIT GROUP
Boulder Capital Group, Inc., a small ticket leasing business with
headquarters in Boulder, Colorado, which was acquired on May 20, 1998, provides
lease financing for petroleum retail equipment, including car washes, fuel
dispensers and convenience store operating equipment, to petroleum retail
businesses.
HLC Financial, Inc., a small ticket leasing business with headquarters in
Westlake Village, California, which was acquired on July 28, 1998, provides
lease financing primarily for computer systems and related office technology
equipment to customers in the automobile dealership and hospitality industries.
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K.L.C., Inc. d/b/a Keystone, a small ticket leasing business with
headquarters in West Hartford, Connecticut, which was acquired on May 20, 1998,
provides lease financing for a variety of equipment, primarily tractor trailers,
embroidery machines and construction equipment, to companies throughout the
United States.
Merrimac Financial Associates, a small ticket leasing business with
headquarters in Mendon, Massachusetts, which was acquired on May 20, 1998,
provides equipment financing to operating companies engaged in the
coin-operated, vending, amusement and coffee service businesses.
The Myerson Companies, d/b/a BSB Leasing, a small ticket leasing business
with headquarters in Denver, Colorado, which was acquired on August 7, 1998,
provides equipment lease financing to small to medium size companies throughout
the United States.
Saddleback Financial Corporation, a small ticket leasing business with
headquarters in Orange, California, which was acquired on July 28, 1998,
provides lease and equipment acquisition financing for a variety of equipment
utilized in various industries, including computers, machine tools, printing,
video, automotive diagnostic and electronic equipment.
- CORPORATE DIVISION
On May 19, 1998, we acquired Portfolio Financial Servicing Company, L.P.
(now UniCapital Operations Group, Inc.), a lease servicing business located in
Portland, Oregon, which provides lease administration and processing services,
including lease accounting for both financial reporting and federal income tax
purposes, lien searches, UCC filings, asset tracking, insurance tracking,
preparation of sales, use and property tax returns, invoicing and collections.
PRODUCTS AND SERVICES
We provide lease financing and related services to a broad range of
commercial customers. We originate direct financing leases, sales-type leases
and operating leases. In addition to financing equipment through leases, we sell
new equipment and provide lease-and equipment-related services, such as
servicing, brokering and remarketing, which is the sale or re-lease of equipment
that has come off lease.
DIRECT FINANCING LEASES. Direct financing leases transfer substantially
all of the benefits and risks of equipment ownership to the lessees. A lease is
classified as a direct financing lease if the collection of the minimum lease
payments is reasonably predictable, no significant uncertainties exist relating
to unreimbursable costs yet to be incurred by the lessor under the lease and the
lease meets one of the following criteria: (i) ownership of the property is
transferred to the lessee by the end of the lease term; (ii) the lease contains
a bargain purchase option; (iii) the term of the lease equals 75% or more of the
estimated economic life of the leased equipment; or (iv) the present value (at
the inception of the lease) of the minimum lease payments equals or exceeds 90%
of the fair value of the leased equipment.
SALES-TYPE LEASES. Sales-type leases, like direct financing leases,
transfer substantially all of the benefits and risks of equipment ownership to
the lessees. However, sales-type leases include profit at lease inception to the
extent the fair value of the equipment exceeds the carrying value. A lease is
classified as a sales-type lease if it includes such a profit at lease inception
and if the collection of the minimum lease payments is reasonably predictable,
no significant uncertainties exist relating to unreimbursable costs yet to be
incurred by the lessor under the lease and the lease meets one of the following
criteria: (i) ownership of the property is transferred to the lessee by the end
of the lease term; (ii) the lease contains a bargain purchase option; (iii) the
term of the lease equals 75% or more of the estimated
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economic life of the leased equipment; or (iv) the present value (at the
inception of the lease) of the minimum lease payments equals or exceeds 90% of
the fair value of the leased equipment.
OPERATING LEASES. All lease contracts which do not meet the criteria of
direct financing leases or sales-type leases are accounted for as operating
leases.
In general, our lease transactions are net leases with a specified
noncancelable lease term. The leases generally include a "hell-or-high-water"
provision which requires the lessee to make all lease payments under all
circumstances. A net lease requires the lessee to maintain the equipment, pay
all property, sales and use taxes and insure the equipment against casualty
loss.
RESIDUAL INTEREST IN EQUIPMENT
We retain a residual interest in the equipment covered by many of our
leases. We generally seek to determine the best remarketing plan for such
equipment prior to the expiration of the lease. In many cases, the remarketing
plan provides for the continuation of the lease or the negotiated sale of the
underlying equipment. In connection with our remarketing activities, we may
negotiate sales of the equipment prior to lease termination.
CREDIT POLICIES AND PROCEDURES
We employ underwriting policies and procedures that are intended to
minimize the risk of delinquencies and credit losses. We have a chief credit
policy officer and a credit committee that have established overall corporate
credit guidelines and individual guidelines tailored to each of the types of
credits to which we provide financing. These guidelines include varying
requirements based upon factors such as the type of asset, the creditworthiness
of the lessee and the implicit lease interest rate. The chief credit policy
officer periodically conducts field credit reviews, which include a review of a
sample of credit decisions made by credit officers in the field to ensure
compliance with corporate credit guidelines. During the field credit review, we
also assess the collectibility of the lease portfolio. The chief credit policy
officer also makes credit decisions for those transactions which fall outside of
the credit guidelines.
The credit approval process generally includes a review of financial
statements, a credit report and, depending upon the size of the proposed
transaction and the business, credit references and a review of the personal
credit of the principals of the business. The Company uses a credit scoring
model for approving credits on small ticket leases. Proposed transactions which
are not within authorized credit parameters must be reviewed by the chief credit
policy officer or the credit committee. For small ticket leases under $75,000,
our goal is to make rapid credit decisions, based upon an automated scoring and
approval system. For middle market leases, our goal is to establish and maintain
credit policies and procedures that allow us to make credit decisions within 48
hours.
SERVICING, COLLECTION AND ADMINISTRATION
We provide servicing, collection and administration services for certain of
the leases we originate. We have the capability to provide transaction
processing and management services for each lease contract, from the time it is
originated through its termination, including set-up, billing, cash posting,
customer service, accounting, collection, tax compliance and asset management.
Our service offerings include lien searches, UCC filings, asset tracking,
insurance tracking, preparation of sales, use and property tax returns,
invoicing and collections.
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SALES AND MARKETING
We employ approximately 156 sales representatives to originate leases.
Sales and marketing efforts are primarily conducted in the field on a one-on-one
basis with established accounts, through equipment manufacturers, brokers and
vendors and also through advertising, participation in trade associations and
telesales. Most of the salespersons are compensated on a commission basis or
through other incentive-based compensation programs.
PORTFOLIO ACQUISITIONS
From time to time, we acquire portfolios of equipment leases from other
finance companies. Prior to the acquisition of a portfolio of leases, we perform
due diligence procedures, including reviewing a sample of the lease files
included in the portfolio, loss and delinquency experience and other factors.
COMPETITION
The financing of equipment is highly competitive. We compete for customers
with a number of national, regional and local lease and finance companies. In
addition, our competitors include those equipment manufacturers that finance the
sale or lease of their products themselves and other traditional types of
financial services companies, such as commercial banks and savings and loan
associations, all of which provide financing for the purchase of equipment. Many
of our existing and potential competitors possess substantially greater
financial, marketing and operational resources and include many larger, more
established companies that may have a lower cost of funds and greater access to
capital markets and other funding sources than we have.
Competition in the equipment lease and specialty finance market is based
primarily on lease rates, terms, reliability in meeting commitments, customer
service and market presence. We will continue to encounter significant
competition, and we may not be able to compete effectively in our chosen market
segments or any new market segments that we enter.
EMPLOYEES
As of December 31, 1998, we had 568 full-time employees, including 156 who
are engaged in sales and marketing and 61 who are engaged in credit and
collection. We believe that our relationships with all of our employees are
good.
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EXECUTIVE OFFICERS
The following table sets forth certain information regarding our executive
officers.
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NAME AGE POSITION WITH THE COMPANY
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Robert J. New 34 Chairman and Chief Executive Officer
Theodore J. Rogenski 59 Chief Operating Officer and a Director
Stuart L. Cauff 52 President of the Company, President and Chief
Executive Officer of the Big Ticket Leasing Division,
Chairman of UniCapital Air Group and a Director
Bruce E. Kropschot 58 Vice Chairman -- Mergers & Acquisitions and a Director
Martin Kalb 55 Executive Vice President and General Counsel
Steven E. Hirsch 44 Executive Vice President -- Structured Finance
Edward A. Jaeckel 59 Executive Vice President and Chief Credit Policy
Officer
Jonathan New 38 Chief Financial Officer
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ROBERT J. NEW co-founded UniCapital in October 1997 and has since served as
Chairman and Chief Executive Officer. From July 1996 until December 1997, Mr.
New served as an operating company president of and as acquisition consultant to
U.S. Office Products Company, a publicly-held supplier of a broad range of
office products and business services, where Mr. New participated in over 40
acquisitions. From March 1990 until August 1997, Mr. New served as Chief
Executive Officer of Prudential of Florida Leasing, Inc., a small ticket leasing
company. From December 1989 through July 1996, Mr. New served as President and
Chief Executive Officer of Prudential of Florida, Inc., an office services
company. Robert J. New is the brother of Jonathan New.
THEODORE J. ROGENSKI has served as Chief Operating Officer since May 1998
and as a Director since July 1998. From February 1998 to May 1998, Mr. Rogenski
served as a consultant to UniCapital providing services consistent with the
duties and responsibilities of Chief Operating Officer. From December 1994 until
January 1997, Mr. Rogenski served as Chief Operating Officer of LINC Anthem
Corporation and its successor, Newcourt LINC Financial, Inc., a leasing company
specializing in small ticket leasing as well as financial products for the
health care industry, after which he was subject to a noncompetition agreement.
From 1990 until April 1992, Mr. Rogenski served as the President and Chief
Executive Officer of John Hancock Leasing Corporation, after which he pursued
personal interests. From 1981 until 1990, Mr. Rogenski served as President and
Chief Executive Officer of Wells Fargo Leasing Corporation.
STUART L. CAUFF has served as President of the Company since March 1999, as
Chairman of UniCapital Air Group since December 1998, as President and Chief
Executive Officer of the Big Ticket Leasing Division since May 1998 and as a
Director of the Company since July 1998. Mr. Cauff served as President of Cauff
Lippman Aviation, Inc. from 1981 until May 1998.
BRUCE E. KROPSCHOT has served as Vice Chairman -- Mergers & Acquisitions
since May 1998. From November 1997 to May 1998, Mr. Kropschot served as a
consultant to UniCapital providing services consistent with the duties and
responsibilities of Vice Chairman -- Mergers & Acquisitions. From 1987 through
December 1997, he was founder and President of Kropschot Financial Services, a
merger and acquisition advisor to equipment leasing companies, which has
arranged for the sale of over 100 equipment leasing and specialty finance
businesses. From 1980 to 1986, Mr. Kropschot served as President and Vice
Chairman of Master Lease Corporation, which is now known as Tokai Financial
Services, Inc.
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From 1972 to 1980, Mr. Kropschot served as Executive Vice President of HBE
Leasing Corporation and Vice President -- Finance, of its parent corporation,
HBE Corporation.
MARTIN KALB has served as Executive Vice President and General Counsel
since May 1998. From October 1997 to May 1998, Mr. Kalb served as a consultant
to UniCapital providing services consistent with the duties and responsibilities
of Executive Vice President and General Counsel of UniCapital. From 1987 until
November 1997, he was a senior partner in the Miami, Florida office of Greenberg
Traurig Hoffman Lipoff Rosen & Quentel, P.A. whose practice focused upon mergers
and acquisitions, income taxation and estate planning.
STEVEN E. HIRSCH has served as Executive Vice President -- Structured
Finance since May 1998. From January 1998 to May 1998, Mr. Hirsch served as a
consultant to UniCapital providing services consistent with the duties and
responsibilities of Executive Vice President -- Structured Finance of
UniCapital. From 1987 until January 1998, Mr. Hirsch was associated with Morgan
Stanley & Co. Incorporated, most recently as the Head of the Leasing Products
Group. From 1984 until 1987 Mr. Hirsch served as Senior Vice President of Matrix
Leasing International, Inc., an equipment leasing brokerage and packaging
concern and a wholly-owned subsidiary of First Bank Systems. From 1980 until
1983, Mr. Hirsch served as Vice President and Eastern Regional Manager of Wells
Fargo Leasing Corporation.
EDWARD A. JAECKEL has served as Chief Credit Policy Officer since May, 1998
and as Executive Vice President since February 1999. From March 1998 to May
1998, Mr. Jaeckel served as a consultant to UniCapital providing services
consistent with the duties and responsibilities of Chief Credit Policy Officer
of UniCapital. From 1991 until March, 1998, Mr. Jaeckel served as Vice President
and Chief Credit Officer for Bank of New York Leasing Corporation, the fourth
largest bank-owned leasing company in the United States, where he was
responsible for developing, implementing and supervising credit policies and
procedures.
JONATHAN NEW has served as the Chief Financial Officer of UniCapital since
October 1997. Mr. New served as Vice President and Controller of Delta Financial
Corporation, a securitizing mortgage bank, from August 1995 until December 1997.
From March 1993 until August 1995, Mr. New was the Controller of RAI Credit
Corporation, a securitizing private label credit card and data processing
business. Jonathan New is the brother of Robert J. New.
FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
Our future operating results may be affected by a number of factors,
including the matters discussed below.
ABSENCE OF COMBINED OPERATING HISTORY. UniCapital was founded in October
1997. We have conducted operations since the consummation of our initial public
offering and the acquisition of twelve equipment leasing, specialty finance and
related businesses in May 1998. Prior to our acquisition of these businesses and
the other businesses we have acquired, each of the businesses had been operating
independently. We may not be able to integrate these businesses successfully on
an economic basis. Until we finalize the establishment of centralized
accounting, finance and other administrative systems, we will rely upon the
separate systems of these businesses. Our success will depend, in part, upon our
ability to centralize these functions effectively and to integrate all of the
businesses that we acquire.
THERE ARE RISKS TO OUR INTERNAL GROWTH AND OPERATING STRATEGIES. A key
element of our business strategy is to improve the profitability of our
operating subsidiaries and any other
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businesses that we acquire. Our ability to improve profitability depends upon
various factors, including:
- our cost of and ability to obtain capital;
- our ability to achieve operating efficiencies;
- the level of continued demand by businesses for lease financing;
- our ability to expand the range of products and services that we offer;
and
- our ability to enter new markets successfully.
Many of these factors are beyond our control, and our operating strategies
may not be successful. Moreover, we may be unable to generate adequate cash flow
to fund our operations and to support internal growth.
In addition, we have a decentralized operating strategy which permits much
of the decision making for each operating subsidiary to be made by management at
the operating subsidiary. If we do not implement proper overall business
controls, this decentralized operating strategy could result in inconsistent
operating and financial practices at the operating subsidiaries, which could
materially and adversely affect our overall profitability, and ultimately our
business, financial condition and results of operations.
WE MIGHT NOT COMPLETE ANY SECURITIZATION TRANSACTIONS. We intend to
finance or sell a significant portion of the equipment leases that we acquire
and originate through the issuance of securities backed by such leases in
securitization transactions or through other structured finance products. In a
securitization transaction, we would pledge or sell a pool of leases to one or
more wholly-owned, special purpose subsidiaries. The special purpose subsidiary,
either directly or through a trust, issues beneficial interests in the leases in
the form of senior and subordinated securities and sells such securities through
public offerings and private placement transactions.
We intend to utilize securitizations for refinancing of amounts outstanding
under our warehouse loan facilities. To date, we have not completed any
securitizations. To the extent that any securitization transaction in which we
engage is treated as a financing transaction for accounting purposes, the
consummation of the securitization would not generate revenues. Factors that
will affect our ability to complete securitizations include:
- conditions in the securities markets generally;
- conditions in the asset-backed securities markets;
- the credit quality and performance of our lease portfolio;
- whether our leases comply with the eligibility requirements established
in connection with the securitizations;
- whether we can obtain third-party credit enhancement; and
- once we have completed one or more securitizations, the absence of any
material downgrading or withdrawal of ratings given to securities
previously issued in the Company's securitizations.
Any substantial reduction in the availability of the securitization market
for the Company's leases or any adverse change in the terms of such
securitizations could have a material adverse effect on the Company's business,
financial condition and results of operations.
WE MIGHT NOT BE ABLE TO CONTINUE TO INCREASE OUR VOLUME OF RECEIVABLES. A
component of our internal growth strategy is to retain for our own portfolio a
greater portion of the leases that we acquire or originate. Our ability to
sustain continued growth is dependent upon our capacity to attract, evaluate,
finance and service increasing volumes of
10
<PAGE> 12
leases of suitable yield and credit quality. If we do not market our products
effectively, maintain our portfolio quality, service our leases effectively or
obtain institutional financing at acceptable rates, we will not be able to
increase our volume of leases, which would have a material adverse effect on our
business, financial condition and results of operations.
WE WILL NEED ADDITIONAL CAPITAL. We expect to fund the majority of the
leases that we originate or acquire through loan facilities. The loan facilities
included in our "Senior Credit Facilities" and our "Aircraft Facility" (as
defined herein) that we use to finance leases have 364-day terms, which expire
in June, July and October of 1999. We will need to renew or replace these loan
facilities. In addition, to the extent that we retain for our own portfolio a
greater portion of the leases that we acquire or originate, we may require
additional sources of financing. We may require additional capital to fund our
operations, which may not be available, or may not be available on terms that
are acceptable to us. If we cannot renew or replace any of our loan facilities
or obtain additional capital when we need it, our business, financial condition
and results of operations will be materially and adversely affected.
OUR CREDIT FACILITIES LIMIT OUR ABILITY TO TAKE CERTAIN ACTIONS. Our
Senior Credit Facilities and Aircraft Facility:
- require us to pledge substantially all of our assets, including the stock
and assets of the operating subsidiaries, as security for borrowings
under the facilities;
- contain restrictions upon our ability to (among other things) incur
additional indebtedness, issue preferred stock, incur liens, pay
dividends or make certain other restricted payments, consummate certain
asset sales, enter into certain transactions with affiliates, merge or
consolidate with any other person without the consent of the lenders or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of our assets; and
- require us to maintain specified financial ratios and to satisfy certain
financial condition tests. Our ability to meet those financial ratios and
financial condition tests can be affected by events beyond our control,
and we may not be able to meet those tests.
If an event of default occurs under the Senior Credit Facilities or
Aircraft Facility, our lenders could declare all amounts outstanding, together
with accrued interest, to be immediately due and payable. If we could not repay
these amounts, our lenders could proceed against the collateral.
WE ARE SUBJECT TO INTEREST RATE RISKS. Our profitability is determined in
part by the difference between our cost of funds and the yield we obtain on the
leases that we originate or acquire. These leases generally are non-cancelable
and require payments to be made by the lessee for specified terms at fixed rates
based on interest rates prevailing in the market at the time the lease is
approved. Until we either sell or securitize the leases, we fund these leases
under warehouse or other loan facilities or from working capital. If interest
rates increase on our variable rate debt, and we cannot sell or securitize the
leases that we are holding, our operating margins could be adversely affected.
In addition, if interest rates increase and we increase the interest rate we
charge to our customers, demand for our leases could decline. To mitigate these
risks, we hedge certain risks of interest rate increases. Hedging activities
limit our ability to participate in the benefits of lower interest rates with
respect to the hedged portion of the debt. In addition, hedging does not protect
us from all interest rate-related risks.
WE ARE DEPENDENT ON THE CREDITWORTHINESS OF LESSEES. We acquire and
originate equipment leases with a wide range of purchase prices, many of which
involve small and mid-size commercial businesses located throughout the United
States and Canada, or large cyclical
11
<PAGE> 13
businesses such as airlines with operations in different regions around the
world. Small business leases and leases with highly cyclical businesses
generally entail a greater risk of non-performance and higher delinquencies and
losses than leases entered into with larger, more creditworthy lessees or
lessees in less cyclical businesses. If our lessees do not comply with the terms
of the leases, those leases cannot serve as collateral under our warehouse
facilities and in any securitizations that we undertake, which may have a
material adverse effect on our liquidity. Additionally, if we experience
delinquencies and defaults in excess of the levels we estimate when determining
allowances for credit losses, in addition to the adverse effects on our
profitability, we might not be able to obtain financing or complete
securitization transactions, which could have a material adverse effect on our
business, financial condition and results of operations.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY. We intend to continue to make
selective acquisitions of equipment leasing, specialty finance and related
businesses. This strategy requires that we review and potentially reorganize
acquired business operations, corporate infrastructure and systems and financial
controls. This strategy may not be successful because, among other things:
- unforeseen expenses, difficulties, complications and delays frequently
encountered in connection with the rapid expansion of operations could
inhibit our growth;
- we may be unable to maintain or accelerate our growth or to anticipate
all of the changing demands that expanding operations will impose on
management personnel, operational and management information systems, and
financial systems;
- we may not be able to identify, acquire or manage profitably additional
businesses or integrate them without substantial costs, delays or other
operational or financial difficulties; or
- although we intend to finance future acquisitions by using shares of our
common stock and cash, if we decide not to use our common stock because
we believe its market price to be too low, or if potential acquisition
candidates are unwilling to accept our common stock, we may not have, or
be able to obtain, sufficient cash resources to complete any
acquisitions.
If our acquisition strategy is not successful, our business, financial
condition and results of operations could be materially and adversely affected.
RISK OF ECONOMIC DOWNTURN. An economic downturn could result in a decline
in the demand for some of the types of equipment which we finance, which could
lead to a decline in originations of leases. Such a downturn could also
adversely affect the Company's ability to obtain capital to fund lease
originations or to complete securitizations. In addition, such a downturn could
result in an increase in delinquencies and defaults by lessees, which could have
an adverse effect on our profitability and our ability to sell or securitize
leases. Moreover, an economic downturn, either generally or within a specific
industry, could have a material adverse effect on the value of the equipment
underlying the leases, which could in turn affect our ability to realize our
residual interest in such equipment. These results could have a material adverse
effect on our business, financial condition and results of operations.
FLUCTUATIONS IN QUARTERLY RESULTS. We could experience fluctuations in
quarterly operating results due to a number of factors including, among others,
the consummation of a transaction in a particular calendar quarter (or the
failure to complete such a transaction), variations in the volume of leases
originated and variations in interest rates. In addition, certain of our
operating subsidiaries may from time to time experience relatively large
transactions for one or a few customers or relatively large sales of equipment,
which may not
12
<PAGE> 14
recur or may not be followed by correspondingly large transactions in subsequent
periods. Moreover, to the extent that we retain for our own portfolio a greater
portion of the leases that we acquire or originate and the equipment that we
acquire, we will not generate revenue from gain on sale for the retained leases
or revenue from sales of the retained equipment. As a result of these
fluctuations, results for any one quarter, including historical results, should
not be relied upon as being indicative of performance in future quarters.
COMPETITION. The financing of equipment is highly competitive. We compete
for customers with:
- national, regional and local finance companies;
- equipment manufacturers that finance the sale or lease of their products
themselves; and
- other traditional types of financial services companies, such as
commercial banks and savings and loan associations, all of which provide
financing for the purchase of equipment.
Many of our existing and potential competitors possess substantially
greater financial, marketing and operational resources and include many larger,
more established companies that may have a lower cost of funds and greater
access to capital markets and other funding sources than we have.
RESIDUAL VALUE RISK. We retain a residual interest in the equipment
covered by certain leases. We estimate what the fair value of the equipment will
be at the end of the contract term of the lease and reflect that residual value,
if any, as an asset on our balance sheet. Our results of operations depend, to
some degree, upon our ability to realize the residual value of the equipment.
Our ability to realize the residual values depends upon many factors, several of
which are not within our control, including:
- general market conditions at the time of expiration of the lease;
- specific market conditions for that type of equipment at the time of
expiration of the lease;
- the condition of the equipment;
- whether the equipment is obsolete;
- the cost of comparable new equipment; and
- the effects of any additional or amended government regulations.
If, upon the expiration of a lease, we sell the underlying equipment and the
amount realized is less than the recorded value of our residual interest in that
equipment, we will recognize a loss.
RISKS OF YEAR 2000 NONCOMPLIANCE. The inability of our computer systems
and software programs, or those of entities that provide services to us, to
accept, store, interpret or display dates for the year 2000 and beyond could
materially impair our ability to originate, service and sell leases and manage
our financial and accounting functions and sales and marketing activities.
AMORTIZATION OF INTANGIBLE ASSETS. Approximately $613.6 million, or 36.8%,
of the Company's total assets as of December 31, 1998, consists of goodwill
arising from the acquisitions of the operating subsidiaries. Goodwill is an
intangible asset that represents the difference between the aggregate purchase
price for the net assets acquired and the amount of the purchase price that is
allocated to those net assets on our balance sheet. We are required to amortize
the goodwill arising from acquisitions (including goodwill associated with
13
<PAGE> 15
the payment of any earn-out consideration) over a period of time, with the
amount amortized in a particular period constituting an expense that reduces the
Company's net income for that period. The amount amortized, however, will not
give rise to a deduction for tax purposes. In addition, management continually
evaluates goodwill for potential impairment that may result from events or
changes in circumstances from time to time. A reduction in net income resulting
from the amortization or impairment of goodwill may have an adverse impact upon
the market price of our common stock.
DEPENDENCE ON KEY PERSONNEL. We believe that our success will depend to a
significant extent upon the efforts and abilities of Robert J. New, our
co-founder, Chairman and Chief Executive Officer, our other executive officers
and, due to our decentralized operating strategy, senior management and sales
personnel of our operating subsidiaries. Our operating subsidiaries will
continue to depend upon the retention of key sales personnel to maintain certain
customer relationships. In addition, we will depend upon the senior management
and sales personnel of any significant business we acquire in the future. If we
lose the services of one or more of these key employees before we retain
qualified replacement personnel, our business could be adversely affected.
POTENTIAL INFLUENCE OF EXECUTIVE OFFICERS AND DIRECTORS. As of March 19,
1999, the Company's executive officers and directors beneficially owned an
aggregate of approximately 17.9% of the outstanding shares of common stock. The
Company's executive officers and directors if acting together may be able to
influence the election of directors and matters requiring the approval of the
stockholders of the Company. This concentration of ownership may also have the
effect of delaying or preventing a change in control of the Company.
SHARES ELIGIBLE FOR FUTURE SALE. As of March 19, 1999, we had 52,505,323
shares of common stock outstanding. The 28,000,000 shares sold in our initial
public offering are freely tradeable without restriction or further registration
under the Securities Act, unless acquired by an "affiliate" of the Company, as
that term is defined in Rule 144 promulgated under the Securities Act ("Rule
144"); shares held by affiliates will be subject to the resale limitations of
Rule 144. Of the remaining outstanding shares of common stock, 21,251,569 shares
are available for resale at various dates, subject to compliance with Rule 144
as the holding provisions of Rule 144 are satisfied. In addition, 3,334,975
shares may be sold in accordance with the provisions of Rule 145 promulgated
under the Securities Act, subject to contractual lock-up periods contained in
the acquisition agreements pursuant to which such shares were issued. Further,
as of March 19, 1999, 5,256,146 shares of common stock were issuable upon the
exercise of stock options granted prior to or on such date and options to
purchase an additional 724,266 shares had been reserved for future grant under
the terms of acquisition agreements. We filed a registration statement on Form
S-8 with respect to the shares of common stock issuable upon exercise of such
options. Sales of substantial amounts of common stock, or the perception that
such sales could occur, could adversely affect prevailing market prices of our
common stock.
CERTAIN ANTITAKEOVER PROVISIONS. Certain provisions of our Amended and
Restated Certificate of Incorporation and Bylaws may make a change in the
control of the Company more difficult to effect, even if a change in control
were in the stockholders' interest. Pursuant to our Certificate of
Incorporation, our Board of Directors is divided into three classes of directors
elected for staggered three-year terms. Pursuant to our Certificate of
Incorporation and Bylaws, our Board of Directors may issue shares of preferred
stock of the Company, without stockholder approval, on such terms as the Board
of Directors may determine. The rights of the holders of common stock will be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. Moreover,
14
<PAGE> 16
although the ability to issue preferred stock may provide flexibility in
connection with possible acquisitions and other corporate purposes, such
issuances may make it more difficult for a third party to acquire, or may
discourage a third party from acquiring, stock of the Company. In addition, we
are subject to the antitakeover provisions of Section 203 of the Delaware
General Corporation Law, which prohibit the Company from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an "interested
stockholder," unless the business combination is approved in a prescribed
manner.
ITEM 2. PROPERTIES
Our corporate offices are located in leased space in Miami, Florida at
10800 Biscayne Boulevard, Suite 800, Miami, Florida 33161. Our telephone number
is (305) 899-5000.
Our servicing and administration center is located in leased space in
Portland, Oregon. We also lease office space for sales and operations in
Arizona, California, Colorado, Connecticut, Florida, Georgia, Maryland,
Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio,
Texas, Utah and Virginia, and we lease warehouse space in Arizona, Connecticut
and Utah. We believe that our facilities are adequate for our current
operations.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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<PAGE> 17
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET FOR THE COMPANY'S COMMON STOCK
The Company's Common Stock has been listed on the New York Stock Exchange
since May 15, 1998. On March 19, 1999, the last sale price for the Common Stock
was $5.8125 per share. As of March 19, 1999 there were approximately 185 holders
of record of the Company's Common Stock. The following table sets forth the
range of high and low sales prices for the Common Stock for the periods
indicated.
<TABLE>
<CAPTION>
1998 HIGH LOW
- - ---- ------- --------
<S> <C> <C>
Second Quarter (May 15, 1998 to June 30, 1998)............ $19.625 $14.1875
Third Quarter............................................. $19.375 $ 4.0625
Fourth Quarter............................................ $9.4375 $ 3.875
1999
First Quarter (January 1, 1999 to March 19, 1999)......... $ 8.25 $ 5.50
</TABLE>
RECENT SALES OF UNREGISTERED SECURITIES
Since January 3, 1998, the Company has sold the following shares of its
Common Stock. Each transaction was intended to be exempt from registration in
reliance upon Section 4(2) of the Securities Act.
<TABLE>
<CAPTION>
NO. OF SHARES OF AGGREGATE
PURCHASER DATE COMMON STOCK CONSIDERATION
- - --------- ----------------- ---------------- -------------
<S> <C> <C> <C>
Gaston Friedlander Irrevocable
Trust.............................. January 3, 1998 183,750 $551,250
Martin Kalb.......................... January 16, 1998 75,000 $225,000
Michael Rabinovitch.................. January 16, 1998 26,250 $ 78,750
Jonathan New......................... January 18, 1998 52,500 $157,500
Bruce E. Kropschot................... January 23, 1998 20,000 $ 60,000
Steven E. Hirsch..................... January 24, 1998 315,000 $945,000
The G&T Trust........................ January 25, 1998 210,000 $630,000
Jonathan J. Ledecky.................. January 29, 1998 75,000 $225,000
Robert J. New........................ January 29, 1998 75,000 $225,000
Martin Kalb.......................... January 29, 1998 75,000 $225,000
Jonathan New......................... January 29, 1998 25,000 $ 75,000
The G&T Trust........................ January 29, 1998 10,000 $ 30,000
Bruce E. Kropschot................... February 2, 1998 50,000 $150,000
Theodore J. Rogenski................. February 4, 1998 200,000 $600,000
Robert Seaman........................ February 5, 1998 50,000 $150,000
Robert J. New........................ February 17, 1998 40,000 $400,000
Jonathan J. Ledecky.................. February 17, 1998 40,000 $400,000
</TABLE>
In addition, as of February 14, 1998, the Company entered into 10 Amended
and Restated Agreements and Plans of Contribution and two Amended and Restated
Purchase Agreements, pursuant to which the Company issued an aggregate of
13,340,901 shares of Common Stock. Each such share issuance was consummated in
May 1998. Each such transaction was intended to be exempt from registration in
reliance upon Section 4(2) of the Securities Act.
16
<PAGE> 18
ITEM 6. SELECTED FINANCIAL DATA
The following tables set forth selected financial data of the Company as of
the dates and for the periods indicated. The selected financial data set forth
below should be read in conjunction with "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and the Consolidated Financial
Statements of the Company and related notes thereto, included elsewhere herein.
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
(OCTOBER 9, 1997)
TO YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1998
------------------ ------------------
(IN THOUSANDS, EXCEPT SHARE AND
PER SHARE DATA)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Finance income from direct financing and
sales-type leases............................. $ -- $ 30,027
Rental income from operating leases............. -- 68,003
Sales of equipment.............................. -- 365,306
Gain on sale of leases.......................... -- 23,862
Fees, commissions and remarketing income........ -- 15,639
Interest and other income....................... -- 8,093
------- --------
Total revenues............................. -- 510,930
------- --------
Cost of operating leases........................ -- 27,841
Cost of equipment sold.......................... -- 318,383
Interest expense................................ -- 35,453
Selling, general and administrative expenses.... 2,137 63,347
Goodwill amortization........................... -- 10,119
------- --------
Total expenses............................. 2,137 455,143
------- --------
Income (loss) from operations................... (2,137) 55,787
Equity in income from minority-owned
affiliates.................................... -- 1,013
------- --------
Income (loss) before taxes...................... (2,137) 56,800
Provision for income taxes...................... -- 32,007
------- --------
Net income (loss)............................... $(2,137) $ 24,793
======= ========
Earnings (loss) per share, basic................ $ (1.62) $ .73
Earnings (loss) per share, diluted.............. $ (1.62) $ .72
Shares used in computing net income (loss) per
share--
Basic......................................... 1,319,063 33,841,448
Diluted....................................... 1,319,063 34,353,714
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------
1997 1998
---- ----------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 30 $ 9,772
Net investment in direct financing and sales-type leases.... -- 373,113
Equipment under operating leases, net....................... -- 430,229
Total assets................................................ 631 1,669,523
Debt........................................................ -- 667,322
Stockholders' equity........................................ 276 817,288
</TABLE>
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<PAGE> 19
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
UniCapital was founded in October 1997 as a Delaware corporation. We
commenced operations in May 1998 in conjunction with the consummation of our
initial public offering and the acquisition of twelve equipment leasing,
specialty finance and related businesses. In June, July and August 1998, we
completed the acquisition of five additional equipment leasing, specialty
finance and related businesses. We intend to integrate the businesses,
operations and administrative functions of the businesses that we acquired over
a period of time. Integration may present opportunities to reduce costs through
the elimination of duplicate functions and through economies of scale, and may
necessitate additional costs and expenditures for corporate management and
administration, corporate expenses related to being a public company, systems
integration, employee relocation and severance and facilities expansion. These
various costs and possible cost-savings make comparison of future operating
results with historical operating results difficult.
In 1998, we derived the majority of our revenue from lease payments on
leases originated and held by the Company, gains on sale of leases and sales of
equipment subject to leases. In addition, we derived revenue from sales of
equipment off-lease and the sale of new equipment, as well as from servicing
fees, late charges and administrative fees. We also received remarketing fees
for the sale of off-lease equipment on behalf of equity investors in leases and
we may obtain a premium for sales prices in excess of an agreed-upon amount. In
the future, we intend to retain a greater portion of the leases that we
originate or acquire for our own portfolio. In order to execute this strategy,
we must modify certain of the financial covenants in our Senior Credit and
Aircraft Facilities. We are currently negotiating with our lenders to obtain the
necessary modifications to our financial covenants. Even if we retain a greater
portion of the leases that we originate or acquire, we will continue to sell
aircraft engines and remarket or sell equipment at lease end, and we may
continue to sell leases and equipment subject to leases.
We expect to fund the majority of the leases that we originate through
credit facilities. We may sell leases to third parties or refinance them through
a securitization program or other structured finance products. To date, we have
not completed a securitization transaction. Should we be unable to sell or
securitize leases with fixed rates within a reasonable period of time after
funding, our operating margins could be adversely affected by any increase in
interest rates to the extent that we have not effectively hedged our interest
rate exposure on variable rate debt. Moreover, increases in interest rates which
cause us to raise the implicit interest rate charged to our customers could
decrease demand for our lease products.
The leases we acquire or originate generally are noncancelable for a
specified term during which we generally receive scheduled payments sufficient,
in the aggregate, to cover our borrowing costs and, when aggregated with the
residual, the costs of the underlying equipment. The noncancelable term of each
lease is generally equal to or less than the equipment's estimated economic
life. Initial terms of the leases in our portfolio generally range from 12 to 84
months. Certain of the leases we acquire or originate carry a $1.00 buy-out
provision upon maturity of the lease.
Our leases are collateralized by the equipment leased as well as, in some
cases, a personal guarantee provided by a principal of the lessee. We manage
credit risk through diversifying our business customer base, geographic location
of lessees and the type of
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<PAGE> 20
business equipment leased. We believe that prepayment risks are mitigated by the
noncancelable, full payout structure of the majority of our leases.
CERTAIN ACCOUNTING CONSIDERATIONS
DIRECT FINANCING LEASES. Direct financing leases transfer substantially
all of the benefits and risks of equipment ownership to the lessees. A lease is
classified as a direct financing lease if the collection of the minimum lease
payments is reasonably predictable, no significant uncertainties exist relating
to unreimbursable costs yet to be incurred by the lessor under the lease and the
lease meets one of the following criteria: (i) ownership of the property is
transferred to the lessee by the end of the lease term; (ii) the lease contains
a bargain purchase option; (iii) the term of the lease equals 75% or more of the
estimated economic life of the leased equipment; or (iv) the present value (at
the inception of the lease) of the minimum lease payments equals or exceeds 90%
of the fair value of the leased equipment. With respect to our direct financing
leases, we record total lease rentals receivable, estimated unguaranteed
residual value and initial direct costs (which are those costs, including sales
commissions, incurred in connection with consummating the lease) as the gross
investment in the lease. The difference between the gross investment in the
lease and the cost of the leased equipment is defined as "unearned income."
Finance income is recognized over the term of the lease by amortizing the
unearned income using the interest method.
SALES-TYPE LEASES. Sales-type leases, like direct financing leases,
transfer substantially all of the benefits and risks of equipment ownership to
the lessee. However, sales-type leases include profit at lease inception to the
extent the fair value of the equipment exceeds the Company's carrying value.
Sales-type leases can arise in connection with new leases, or upon
classification of lease renewals at or near the end of the initial lease term. A
lease is classified as a sales-type lease if it includes such a profit at lease
inception and if the collection of the minimum lease payments is reasonably
predictable, no significant uncertainties exist relating to unreimbursable costs
yet to be incurred by the lessor under the lease and the lease meets one of the
following criteria: (i) ownership of the property is transferred to the lessee
by the end of the lease term; (ii) the lease contains a bargain purchase option;
(iii) the term of the lease equals 75% or more of the estimated economic life of
the leased equipment; or (iv) the present value (at the inception of the lease)
of the minimum lease payments equals or exceeds 90% of the fair value of the
leased equipment. With respect to sales-type leases, we record total lease
rentals receivable, estimated unguaranteed residual value as the gross
investment in the lease. The difference between gross investment in the lease
and the present value of the gross investment in the lease is defined as
"unearned income." The present value of the minimum lease payments computed at
the interest rate implicit in the lease is recorded as sales revenue. The cost
of the equipment less the present value of the unguaranteed residual value,
computed at the interest rate implicit in the lease, is reflected as the cost of
sale. Finance income is recognized over the term of the lease by amortizing the
unearned income using the interest method.
NET INVESTMENT IN DIRECT FINANCING AND SALES-TYPE LEASES. At December 31,
1998 the Company's net investment in direct financing and sales-type leases
totaled $373.1 million, or 46.4% of the Company's net investment in leases
(including net book value of equipment under operating leases).
OPERATING LEASES. At December 31, 1998, the net book value of equipment
under operating leases totaled $430.2 million, or 53.6% of the Company's net
investment in leases (including net book value of direct financing and
sales-type leases). All lease contracts which do not meet the criteria of direct
financing leases or sales-type leases are accounted for as
19
<PAGE> 21
operating leases. Monthly lease payments are recorded as income from operating
leases on a straight-line basis. Leased equipment is recorded, at the Company's
cost, as "Equipment under operating leases" and depreciated on a straight-line
basis over the estimated life of the equipment to its estimated salvage value.
When equipment is sold, the net proceeds realized in excess of the carrying
value are recorded as "Gain on sale of equipment;" if the net proceeds are less
than the carrying value, the amount by which the carrying value exceeds the net
proceeds is recorded as a loss.
GAIN ON SALE. We have also generated gain on sale income from the sale of
leases to third party financing sources for cash. In June 1996, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 125 ("SFAS 125"), "Accounting for Transfers and Servicing of Financial
Assets and Extinguishment of Liabilities." SFAS 125 is effective for
transactions occurring after December 31, 1996. Among other things, SFAS 125
requires that servicing assets and other retained interests in transferred
assets be measured by allocating the previous carrying amount between the assets
sold, if any, and retained interests, if any, based on relative fair values at
the date of transfer.
In the future, we intend to retain a greater portion of the leases that we
originate or acquire for our own portfolio. In order to execute this strategy,
we must modify certain of the financial covenants in our Senior Credit
Facilities and Aircraft Facility. We are currently negotiating with our lenders
to obtain the necessary modifications to our financial covenants. Even if we
retain a greater portion of the leases that we originate or acquire, we will
continue to sell aircraft engines and remarket or sell equipment at lease end,
and we may continue to sell leases and equipment subject to leases.
RESIDUAL VALUES. At the inception of a direct financing lease or a
sales-type lease, we estimate a residual value based upon the expected net
realizable value of the equipment at the end of the lease term. The salvage
value of equipment subject to operating lease is determined by, among other
factors, the estimated useful life of the equipment, the expected condition of
the equipment at the end of the lease term, and prevailing market demand for the
equipment. At the end of the initial term of a lease, the lease may be extended,
the equipment may be sold to the lessee or the equipment may be sold or leased
to another party. The original estimate of the residual value is adjusted
downward during the lease term if a decline in value is projected; however,
upward adjustments in residual estimates are not permitted.
NEW ACCOUNTING PRONOUNCEMENTS. In June 1998, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 133 (SFAS
133), "Accounting for Derivative Instruments and Hedging Activities," which is
effective for fiscal years beginning after June 15, 1999. The Company plans to
adopt SFAS for the year beginning January 1, 2000. SFAS 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities and it requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value.
20
<PAGE> 22
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements of the Company and the related notes thereto
appearing elsewhere in this Form 10-K.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1998
-------------------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Finance income from direct financing and sales-type
leases.................................................... $ 30,027 5.9%
Rental income from operating leases......................... 68,003 13.3
Sales of equipment.......................................... 365,306 71.5
Gain on sale of leases...................................... 23,862 4.7
Fees, commissions and remarketing income.................... 15,639 3.1
Interest and other income................................... 8,093 1.5
-------- -----
Total revenues......................................... 510,930 100.0
-------- -----
Cost of operating leases.................................... 27,841 5.4
Cost of equipment sold...................................... 318,383 62.3
Interest expense............................................ 35,453 6.9
Selling, general and administrative expenses................ 63,347 12.5
Goodwill amortization....................................... 10,119 2.0
-------- -----
Total expenses......................................... 455,143 89.1
-------- -----
Income from operations...................................... 55,787 10.9
Equity in income from minority-owned affiliates............. 1,013 0.2
-------- -----
Income before taxes......................................... 56,800 11.1
Provision for income taxes.................................. 32,007 6.2
-------- -----
Net income.................................................. $ 24,793 4.9%
======== =====
</TABLE>
FINANCE INCOME FROM DIRECT FINANCING AND SALES-TYPE LEASES. Finance income
from direct financing and sales-type leases was $30.0 million, and 5.9% of total
revenues, for the year ended December 31, 1998. This amount represents interest
income on direct financing and sales-type leases, net of the amortization of
indirect costs.
RENTAL INCOME FROM OPERATING LEASES. Rental income from operating leases
was $68.0 million, and 13.3% of total revenues, for the year ended December 31,
1998. This amount represents rental income and contingent rent earned from
assets under operating leases.
SALES OF EQUIPMENT. Sales of equipment were $365.3 million, and 71.5% of
total revenues, for the year ended December 31, 1998. Included in sales of
equipment is the sales proceeds from the sale of aircraft and aircraft engines,
sales proceeds from the sale of new equipment and sales revenue generated
through sales-type leases.
GAIN ON SALE OF LEASES. Gain on sale of leases was $23.9 million, and 4.7%
of total revenues, for the year ended December 31, 1998. During the period, the
Company generated $5.1 million in gain on sale of leases through the sale of
$70.1 million of net investment in leases in third party sales. In addition, the
Company generated $18.8 million in gain on sale of leases through the placement
of $267.4 million in net investment in leases into the Company's Purchase
Facility.
FEES, COMMISSIONS AND REMARKETING INCOME. Fees, commissions and
remarketing income was $15.6 million, and 3.1% of total revenues, for the year
ended December 31, 1998.
21
<PAGE> 23
Included in this amount are (i) servicing fees on leases serviced by the
Company, including both third party leases and leases originated by the Company
that have been sold to third parties, (ii) commissions on arranging financing
for third parties and (iii) remarketing income from the sale of off-lease
equipment.
COST OF OPERATING LEASES. Cost of operating leases was $27.8 million, and
5.4% of total revenues, for the year ended December 31, 1998. Cost of operating
leases is primarily depreciation on operating leased assets; it also includes
the amortization of initial direct costs of originating operating leases.
COST OF EQUIPMENT SOLD. Cost of equipment sold was $318.4 million, and
62.3% of total revenues, for the year ended December 31, 1998. Cost of equipment
sold represents the net carrying value of equipment which is sold through sales
of equipment.
INTEREST EXPENSE. Interest expense was $35.5 million, and 6.9% of total
revenues, for the year ended December 31, 1998. The Company incurs interest
expense as a result of utilization of its various credit facilities.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $63.3 million, and 12.5% of total revenues, for the
year ended December 31, 1998. Included in this amount are salaries and benefits
of the Company's employees, selling and marketing expenses, occupancy costs,
travel related costs and provisions for bad debts. In addition, the Company
incurred a $17.3 million non-cash compensation charge for certain equity
issuances prior to its initial public offering.
EQUITY IN INCOME FROM MINORITY-OWNED AFFILIATES. Equity in income from
minority-owned affiliates was $1.0 million, and 0.2% of total revenues, for the
year ended December 31, 1998. This amount represents earnings from
unconsolidated subsidiaries, primarily aircraft operating entities. The earnings
in these entities typically are generated from aircraft leases and sales of
aircraft and aircraft equipment.
PERIOD FROM INCEPTION (OCTOBER 9, 1997) TO DECEMBER 31, 1997
We were incorporated in October 1997 and commenced operations in May 1998
in conjunction with the consummation of our initial public offering and the
acquisition of twelve equipment leasing, specialty finance and related
businesses. During the period from October 9, 1997 to December 31, 1997 we had a
net loss of $2.1 million, which consisted primarily of a non-cash stock
compensation charge.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1998, we had cash and cash equivalents of approximately
$9.8 million. Our business is capital intensive and requires access to
substantial short-term and long-term credit to fund new equipment leases. We
will continue to require access to significant additional capital to maintain
and expand the volume of leases that we fund, as well as to fund any future
acquisitions of leasing and specialty finance companies or lease portfolios.
Our uses of cash include the origination of equipment leases, payment of
interest expenses, repayment of borrowings under our credit facilities,
operating and administrative expenses, income taxes and capital expenditures,
and may include payment of the cash portion of the earn-out arrangements with
the stockholders of certain of the acquired companies, as well as any future
acquisitions of companies or lease portfolios.
22
<PAGE> 24
On March 10, 1999, we entered into a letter of intent, which was amended on
March 25, 1999, to purchase a portfolio of nine commercial aircraft subject to
net operating leases for approximately $312 million. We intend to purchase these
aircraft with up to $39 million in cash and approximately $278 million in a
combination of seller financing and third-party financing for which we are
currently negotiating. The letter of intent is subject to satisfactory
completion of due diligence prior to April 9, 1999, and we expect the
transaction to close by June 30, 1999. After consummation of the transaction,
the seller is obligated to offer to sell us an additional $400 million in
commercial aircraft prior to the end of 1999.
On March 19, 1999, we entered into a binding letter of intent whereby we
would acquire the equity interest in a portfolio of 34 commercial aircraft
subject to net operating leases for approximately $36 million in net cash
investment, subject to the successful consummation of securitization financing
for the balance of the approximate $1.1 billion purchase price. This transaction
is expected to close by April 30, 1999.
In order to complete the transactions described above, we must obtain
additional financing or fund the necessary cash requirements from the sale of
assets or equipment subject to lease. We are currently negotiating to obtain the
necessary funding through financing or sales.
We believe that funds generated from operations and possible future sources
of borrowings, including the Senior Credit Facilities and Aircraft Facility,
will be sufficient to finance our current operations and planned capital
expenditure requirements at least for the next twelve months, assuming
satisfactory renewal or replacement of such facilities. If we are unable to
renew or replace our credit facilities, our business, financial condition and
results of operations would be materially and adversely affected. From
time-to-time we engage in discussions and conduct analyses with respect to
possible acquisitions of equipment, lease portfolios and businesses, some of
which may lead to and include negotiation and execution of letters of intent. In
order to consummate these transactions, we will need to issue additional equity
securities, incur additional indebtedness or obtain additional sources of
financing.
SENIOR CREDIT FACILITIES
We have entered into credit arrangements with NationsBank, N.A.,
("NationsBank"), as administrative agent, and NationsBanc Montgomery Securities
LLC, as arranger and syndication agent, to provide $1.2 billion in credit
facilities (the "Senior Credit Facilities") which consist of the following
sub-facilities: (i) a $300.0 million Corporate Revolving Credit Facility
primarily to finance acquisitions and working capital (the "Revolving
Facility"); (ii) a $300.0 million Special Purpose Entity Large Ticket Warehouse
Facility primarily to finance the purchase and leasing of aircraft and aircraft
engines (the "Warehouse Facility"); and (iii) two asset-backed commercial paper
facilities totaling $600.0 million to finance small ticket and middle market
leases, consisting of an Equipment Lease Receivable Purchase Facility (the
"Purchase Facility") and an Equipment Lease Receivable Financing Facility (the
"Financing Facility").
REVOLVING FACILITY. Under the Revolving Facility, we may borrow up to
$300.0 million with a $50.0 million sublimit for letters of credit and a $15.0
million swingline sublimit. The proceeds of the Revolving Facility may be used
to finance the cash portion of permitted acquisitions and for general corporate
purposes, subject to certain limitations. Amounts outstanding under the
Revolving Facility bear interest, at our option, at NationsBank's base rate plus
an applicable margin, or a Eurodollar rate plus an applicable margin. Our
obligations under the Revolving Facility are guaranteed by all of our
subsidiaries other than certain special
23
<PAGE> 25
purpose entities which are not participating in the Warehouse Facility. The
Revolving Facility is secured by a pledge of all of the capital stock of our
domestic guaranteeing subsidiaries (and a pledge of 65% of the capital stock of
each international guaranteeing subsidiary) and a security interest in all other
assets and properties of the Company and those subsidiaries guaranteeing the
Revolving Facility, other than assets financed on a non-recourse basis by the
Company and any assets subject to liens granted in connection with certain
permitted indebtedness (including securitizations). Borrowings under the
Revolving Facility are subject to certain conditions, including but not limited
to absence of material adverse effect and absence of material litigation. In
addition, the Revolving Facility contains covenants, including but not limited
to limitations on liens other than permitted liens, investments, dividends and
other restricted payments, incurrence of recourse indebtedness, transactions
with affiliates, acquisitions other than permitted acquisitions (as defined in
the Revolving Facility) as well as various financial covenants, including ratios
of debt with recourse or limited recourse to cash flow, total debt to net worth
and cash flow to fixed charges, and maintenance at all times of a minimum net
worth. The Revolving Facility, which was entered into in June 1998, has a three-
year term. We pay a quarterly fee equal to a percentage of the unused portion of
the Revolving Facility. As of December 31, 1998, the Company had borrowings of
$163.1 million outstanding under the Revolving Facility with a weighted average
interest rate of 7.08%.
WAREHOUSE FACILITY. Under the Warehouse Facility, special purpose entities
wholly-owned by the Company (each a "SPE Borrower" and collectively, the "SPE
Borrowers") may borrow up to an aggregate of $300.0 million. The proceeds of the
Warehouse Facility may be used to finance the purchase of eligible aircraft and
eligible aircraft engines. Amounts outstanding under the Warehouse Facility bear
interest, at our option, at NationsBank's base rate plus an applicable margin or
a Eurodollar rate plus an applicable margin. The SPE Borrowers' obligations
under the Warehouse Facility are guaranteed by all present and future
subsidiaries of the SPE Borrowers (including any trusts with respect to which
each SPE Borrower has a beneficial interest) for so long as such SPE Borrowers
are borrowers under the Warehouse Facility. The Warehouse Facility is
nonrecourse to the Company, and is secured by a first priority perfected pledge
of all of the common stock of each SPE Borrower and each domestic subsidiary
(direct or indirect) of each SPE Borrower, and a first priority perfected
security interest in all present and future assets and properties of each SPE
Borrower and each of its subsidiaries. Borrowings under the Warehouse Facility
are subject to certain conditions, including but not limited to absence of
material adverse effect and absence of material litigation. In addition, the
Warehouse Facility contains certain covenants, including but not limited to
limitations on liens, investments, dividends and other restricted payments,
capital expenditures, transactions with affiliates, acquisitions, incurrence of
debt, as well as requirements related to annual appraisals of eligible aircraft
and aircraft engines, annual review of the approved lessees and obligors and
aircraft and engine types and interest rate protection acceptable to
NationsBank, and various financial covenants customary for transactions of this
type, including a ratio of cash flow to interest. We pay a quarterly fee equal
to a percentage of the unused portion of the Warehouse Facility. The revolving
term of the Warehouse Facility, which was entered into in June 1998, is 364
days. In the event the revolving term of the Warehouse Facility is not extended,
we have the option to convert the outstanding balance into a one-year term loan.
As of December 31, 1998, the Company had borrowings of $52.0 million outstanding
under the Warehouse Facility with a weighted average interest rate of 7.29%.
PURCHASE FACILITY. We have established the Purchase Facility with
NationsBank, as administrative agent, pursuant to which a commercial paper
conduit (the "CP Conduit") or, if the CP Conduit does not buy them, one or more
bank investors, which will include
24
<PAGE> 26
NationsBank (the "Bank Investors"), will purchase beneficial interests (the "Net
Investment") in an amount of up to $350.0 million, (the "Facility Limit") from a
qualifying special purpose entity, collateralized by small ticket and middle
market leases meeting certain eligibility requirements. Two indirect,
bankruptcy-remote subsidiaries of the Company (the "Transferors") will purchase
the Company's interest in certain financing leases and related leased equipment
originated or purchased by the Company or eligible subsidiaries of the Company.
The CP Conduit (or, upon the occurrence of certain events, the Bank Investors)
will purchases leases from the Transferors at an amount equal to a percentage of
the present value of the remaining lease receivables. Collections on the leases
will generally be applied first to pay any amounts due under the Purchase
Facility and certain other specified facilities, and then to the Transferors. We
plan to reduce the Net Investment under the Purchase Facility periodically
through securitizations to an amount significantly less than the Facility Limit.
To date, we have not completed any securitizations. The Purchase Facility
contains certain restrictions, including limitations on liens on the leases,
indebtedness, certain lease modifications and changes in credit and collection
practices. The Purchase Facility requires payment by the Transferor of program
fees, facility fees, administration fees and commercial paper dealer fees. The
term of the Purchase Facility, which was entered into in June 1998, is 364 days.
As of December 31, 1998, the amount outstanding under the Purchase Facility was
$251.3 million.
FINANCING FACILITY. We have established the Financing Facility with
NationsBank, as administrative agent, pursuant to which the CP Conduit or the
Bank Investors will advance an amount up to $250.0 million. A subsidiary (the
"Financing SPE") will finance the Company's interest in certain operating and
financing leases and certain leased equipment originated or purchased by the
Company or any subsidiaries of the Company. The CP Conduit (or, under certain
limited circumstances, the Bank Investors) will lend funds to the Financing SPE
in an amount equal to a percentage of the present value of the remaining lease
receivables. Such borrowings are secured by an interest in the Financing SPE's
leases and certain leased equipment. The Financing Facility contains certain
restrictions and requires the payment of various fees, generally on terms
substantially equivalent to those in the Purchase Facility. We have guaranteed
the amounts borrowed under the Financing Facility. The term of the Financing
Facility, which was entered into in July 1998, is 364 days. As of December 31,
1998, the amount outstanding under the Financing Facility was $32.8 million with
a weighted average interest rate of 6.16%.
The Company paid a financing fee in connection with entering into the
Senior Credit Facilities, which will be amortized as a yield adjustment over the
terms of the Senior Credit Facilities using the interest method, and will pay an
annual administration fee equal to a percentage of the total amount of the
Senior Credit Facilities. We expect that the aggregate fees and expenses to be
paid in connection with entering into the Senior Credit Facilities will be paid
from borrowings under the Revolving Facility.
AIRCRAFT FACILITY. In October 1998, we entered into a warehouse facility
(the "Aircraft Facility"), primarily to finance the purchase and leasing of
aircraft. Under the Aircraft Facility, we may borrow up to $500.0 million. The
Aircraft Facility is nonrecourse to the Company and is secured by a first
priority perfected pledge of all of the common stock of each SPE Borrower and
each domestic subsidiary of each SPE Borrower, and a first priority perfected
security interest in all present and future assets and properties of each SPE
Borrower and each of its subsidiaries. Borrowings under the Aircraft Facility
are subject to certain conditions, including but not limited to absence of
material adverse effect and absence of material litigation. In addition, the
Aircraft Facility contains certain covenants, including but not limited to
limitations on liens, dividends and other restricted payments, capital
expenditures, acquisitions, incurrence of debt, as well as requirements related
to annual appraisals of eligible
25
<PAGE> 27
aircraft, approved aircraft and aircraft engine types and interest rate
protection acceptable to the lender, and various financial covenants customary
for transactions of this type, including a ratio of cash flow to interest. As of
December 31, 1998, the Company had borrowings of $134.0 million outstanding
under the Aircraft Facility with a weighted average interest rate of 7.32%.
HEDGING STRATEGY
When we borrow funds, we are exposed to a certain degree of risk caused by
interest rate fluctuations. Although our equipment loans are generally
structured and permanently funded on a fixed interest rate basis, we may
initially fund the lease by borrowing on a floating rate basis. To manage
certain interest rate risks, we expect to use derivative financial instruments,
such as forward rate agreements and Treasury locks and interest rate swaps, caps
and collars. Our hedging techniques may not protect us from interest
rate-related risks in all interest rate environments.
FLUCTUATIONS IN QUARTERLY RESULTS
We could experience fluctuations in quarterly operating results due to a
number of factors including, among others, the consummation of a transaction in
a particular calendar quarter (or the failure to complete such a transaction),
variations in the volume of leases originated and variations in interest rates.
In addition, certain of our operating subsidiaries may from time to time
experience relatively large transactions for one or a few customers or
relatively large sales of equipment, which may not recur or may not be followed
by correspondingly large transactions in subsequent periods. Moreover, to the
extent that we retain leases that we acquire or originate and the equipment that
we acquire, we will not generate revenue from gain on sale for the retained
leases or revenue from sales of the retained equipment. As a result of these
fluctuations, results for any one quarter should not be relied upon as being
indicative of performance in future quarters.
YEAR 2000 READINESS
As many computer systems and other equipment with embedded chips or
processors (collectively, "Business Systems") use only two digits to represent
the year, they may be unable to process accurately certain data before, during
or after the year 2000. As a result, business and governmental entities are at
risk for possible miscalculations or systems failures causing disruptions in
their business operations. This is commonly known as the Year 2000 ("Y2K")
issue.
We are in the process of implementing a Y2K readiness program with the
objective of having all of our significant Business Systems functioning properly
with respect to the Y2K issue before January 1, 2000. The program is divided
into three major sections -- Infrastructure, Applications Software, and
third-party suppliers and customers ("External Agents"). The phases common to
all sections are: (1) inventorying Y2K items and assigning priorities; (2)
assessing the Y2K compliance of those items; (3) repairing, retiring or
replacing the items that are determined not to be Y2K compliant, beginning with
the items considered most critical to the Company's operations; (4) testing
those items; (5) implementing necessary changes; and (6) designing and
implementing contingency plans.
INFRASTRUCTURE. This section consists of hardware and systems software
other than Applications Software. We estimate that approximately 50 percent of
the activities related to this section were completed by December 31, 1998. The
testing phase is ongoing as hardware
26
<PAGE> 28
or system software is remediated, upgraded or replaced. All Infrastructure
activities are expected to be completed by the end of 1999.
APPLICATIONS SOFTWARE. This section includes the remediation, retirement
or replacement of applications software that is not Y2K compliant. We are using
both internal and external resources to complete this process. As of December
31, 1998, approximately 70 percent of the applications software was remediated
or replaced, and tested. The implementation of these is scheduled to be
completed by May 31, 1999. The remaining applications are expected to be
remediated or replaced by June 30, 1999, tested by October 31, 1999, and
implemented by the end of 1999.
EXTERNAL AGENTS. This section includes the process of identifying and
prioritizing service providers, vendors, suppliers, customers and governmental
entities that we believe will be critical to our business operations after
January 1, 2000. We could be adversely affected if these critical business
partners failed to provide essential services. We are sending questionnaires,
conducting interviews, browsing websites and using other available means to
attempt to ascertain the Y2K readiness of our critical business partners. We
expect to complete this process by June 30, 1999.
We are developing contingency plans intended to mitigate possible
disruptions in business operations that may result from the Y2K issue and we are
developing cost estimates for these plans. If our Y2K readiness program is
unsuccessful, we may, as a contingency plan, contract with third party lease
portfolio service providers to meet the servicing needs of our daily operations.
Contingency plans and related cost estimates will be continually refined, as
additional information becomes available.
We estimate that the aggregate cost of our Y2K efforts will be
approximately $1.3 million, of which approximately $900 thousand has been spent.
The costs of remediation are being expensed as they are incurred and are being
funded through operating cash flow. The costs associated with the replacement of
computerized systems, hardware or equipment (currently estimated to be
approximately $500 thousand), substantially all of which has been capitalized,
are included in the above estimates.
Our Y2K readiness program is an ongoing process and the estimates of costs
and completion dates for various components of the Y2K readiness program
described above are subject to change. The failure to correct a Y2K issue could
result in a failure of certain normal business activities or operations, which
could adversely affect the Company's results of operations, liquidity and
financial condition.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
We incur debt to fund the origination and acquisition of leases, equipment,
lease portfolios and equipment leasing businesses and for general corporate
purposes. The interest rates charged on the debt are generally determined based
on variable measures of interest rates such as the U.S. Federal Reserve Prime
rate ("Prime") or the London Interbank Offered Rate ("LIBOR"). For information
regarding contractual interest rates on the debt and amounts outstanding and
weighted average interest rate at December 31, 1998, see Note 10 to our
consolidated financial statements for the year ended December 31, 1998, included
elsewhere in this Form 10-K.
27
<PAGE> 29
We continually monitor interest rates in order to mitigate exposure to
unfavorable variations. Our objectives in managing this risk include:
- achieving certain ratios of fixed-rate debt to variable-rate debt; and
- achieving certain levels of our aggregate cost of funds.
As a result, from time to time we utilize interest rate swaps. Interest
rate swaps synthetically alter the repricing characteristics of variable-rate
debt obligations, effectively allowing us to pay a fixed interest rate on a
portion of the debt, which reduces our exposure to unfavorable variations in
Prime or LIBOR. There are risks associated with the use of these instruments,
including:
- the possible inability of the counterparties to meet the terms of their
contracts; and
- market movements in values and interest rates.
We do not enter into interest rate swap agreements for trading purposes.
At December 31, 1998, we were a party to one interest rate swap agreement,
which we entered into in November 1998. Under the agreement, we pay a fixed
interest rate on the notional amount to the counterparty and the counterparty
pays us a variable rate on the notional amount based on the 3-month LIBOR rate.
Net settlement with the counterparty occurs quarterly and the agreement expires
in November 2002. The fair market value of this agreement at December 31, 1998
was $22,000, as quoted by a major financial institution.
THE FOLLOWING TABLE PRESENTS, AS OF DECEMBER 31, 1998: (i) the notional
amount of the agreement, (ii) the fixed interest rate to be paid by the Company
and (iii) the variable rate to be paid by the counterparty under the agreement.
EFFECTIVE PERIOD OF INTEREST RATE SWAP
<TABLE>
<CAPTION>
YEAR ENDING 11 MONTHS
DECEMBER 31, ENDING
----------------------------------------- NOVEMBER 30,
1999 2000 2001 2002
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Notional amount.............. $75,000,000 $75,000,000 $75,000,000 $75,000,000
Rate to be paid by the
Company.................... 5.125% 5.125% 5.125% 5.125%
Rate to be received by the 3-month 3-month 3-month 3-month
Company.................... LIBOR LIBOR LIBOR LIBOR
</TABLE>
FOREIGN CURRENCY RISK
We enter into transactions from time to time under which we agree to pay or
receive a fixed amount of money denominated in a currency other than the U.S.
Dollar. In certain transactions, we agree to pay or receive that amount of money
at a designated future time. The applicable foreign currency exchange rate may
change between the date the agreement is entered into and the date of
settlement. The potential change in the exchange rate creates a foreign currency
exchange rate risk. In order to mitigate the risk of unfavorable changes in the
foreign currency exchange rate, we may enter into forward foreign currency
exchange agreements. In a forward foreign currency exchange agreement, the
counterparty agrees to
28
<PAGE> 30
exchange a foreign currency for U.S. Dollars at a fixed exchange rate at a
designated time in the future. There are risks associated with the use of these
instruments, including:
- the possible inability of the counterparties to meet the terms of their
contracts; and
- market movements in foreign currency exchange markets.
We do not enter into foreign currency exchange agreements for trading
purposes.
At December 31, 1998 we were a party to one forward foreign currency
exchange agreement. Under this agreement, we received a commitment from a
financial institution to exchange Canadian Dollars ("CAD") for U.S. Dollars
("USD") at a fixed exchange rate. The fair value of the agreement at December
31, 1998, based on the applicable closing exchange rate on that date, was
$56,800. The following table presents (i) the settlement date, (ii) the amount
we paid in Canadian dollars, and (iii) the contract exchange rate.
<TABLE>
<S> <C>
Settlement Date............................................. February 5, 1999
Amount the Company paid in Canadian Dollars................. $8,500,000
Exchange rate per agreement at date of maturity............. $1.52255 CAD per USD
</TABLE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
SELECTED QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
4TH QUARTER 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
1997 1998 1998 1998 1998
----------- ----------- ----------- ----------- -----------
UNAUDITED
<S> <C> <C> <C> <C> <C>
Total revenues......... $ -- $ -- $54,390 $133,362 $323,178
Income (loss) before
taxes................ (2,137) (17,315) 15,932 26,007 32,176
Net income (loss)...... (2,137) (17,315) 9,254 14,568 18,286
Earnings (loss) per
common share, basic.. (1.62) (2.72) 0.36 0.29 0.36
Earnings (loss) per
common share,
diluted.............. (1.62) (2.68) 0.36 0.29 0.35
</TABLE>
FINANCIAL STATEMENTS
The information set forth under the caption "Financial Statements" in Item
14 of Part IV of this Form 10-K is incorporated herein by reference in response
to this Item 8.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth under the captions "Election of Directors" and
"Other Matters" in the Proxy Statement, and the information set forth in Item 1,
"Business--Executive Officers" is incorporated herein by reference in response
to this Item 10.
29
<PAGE> 31
ITEM 11. EXECUTIVE COMPENSATION
The information set forth under the caption "Executive Compensation,"
"Compensation Committee Report on Executive Compensation" and "Performance
Graph" in the Proxy Statement is incorporated herein by reference in response to
this Item 11.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement is incorporated herein
by reference in response to this Item 12.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under the subcaption "Executive
Compensation--Compensation Committee Interlocks and Insider Participation" and
"Certain Relationships and Related Party Transactions" in the Proxy Statement is
incorporated herein by reference in response to this Item 13.
30
<PAGE> 32
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) FINANCIAL STATEMENTS. The following consolidated financial statements of
the Company are filed with this Form 10-K:
The consolidated financial statements of UniCapital Corporation and
Subsidiaries as of December 31, 1998 and 1997 and for the year ended
December 31, 1998 and for the period from inception (October 9, 1997) to
December 31, 1997.
(a)(2) FINANCIAL STATEMENT SCHEDULES. All financial statement schedules are
omitted because they are not applicable or the required information is shown in
the financial statements or notes thereto listed above in Item 14(a)(1).
(a)(3) EXHIBITS. The Exhibits listed below are filed or incorporated by
reference as part of this Form 10-K. Where so indicated by footnote, exhibits
which were previously filed are incorporated by reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
<C> <S>
2.01 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, ACR Acquisition Corp.,
American Capital Resources, Inc. and Michael B. Pandolfelli
and Gerald P. Ennella, dated as of February 14, 1998. (1)
2.02 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, BCG Acquisition Corp.,
Boulder Capital Group, Inc., Roy L. Burger and Carl M.
Williams, dated as of February 14, 1998. (1)
2.03 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, CLA Acquisition Corp.,
Stuart L. Cauff, The 1998 Cauff Family Trust, Wayne D.
Lippman and The 1998 Lippman Family Trust, dated as of
February 14, 1998. (1)
2.04 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, JCS Acquisition Corp.,
Jacom Computer Services, Inc. and John L. Alfano, dated as
of February 14, 1998. (1)
2.05 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, KSTN Acquisition Corp.,
K.L.C., Inc. and Alan H. Kaufman and Edgar W. Lee, dated as
of February 14, 1998. (1)
2.06 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, XFC Acquisition Corp.,
Matrix Funding Corporation, and Richard C. Emery, J. Robert
Bonnemort, David A. DiCesaris, Jack S. and Judith F. Emery,
Trustees for Jack S. Emery Trust, Alvin W. and Lila E.
Emery, Trustees for Alvin W. and Lila E. Emery Trust, JSE
Partners, Ltd., a Utah Limited Partnership, LBK Limited
Partnership, a Utah Limited Partnership, John I. Kasteler,
Jr., Craig C. Mortensen, Shanni Staker and Christian F.
Emery, dated as of February 14, 1998. (1)
2.07 Amended and Restated Purchase Agreement by and among
UniCapital Corporation, MFA Acquisition Corp., Merrimac
Financial Associates and Allan Z. Gilbert, Jordan L. Shatz
and Mark F. Cignoli, dated as of February 14, 1998. (1)
</TABLE>
31
<PAGE> 33
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
<C> <S>
2.08 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, MCMG Acquisition Corp.,
Municipal Capital Markets Group, Inc., and the Stockholders
Named Therein, dated as of February 14, 1998. (1)
2.09 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, NSJ Acquisition Corp., W.
Jeptha Thornton, Richard C. Giles, Samuel J. Thornton, The
1998 Giles Family Trust and The 1998 Thornton Family Trust,
dated as of February 14, 1998. (1)
2.10 Amended and Restated Purchase Agreement by and among PFSC
Acquisition Corp., PFSC Limited Acquisition Corp., Portfolio
Financial Servicing Company, L.P. and The Partners Listed on
the Signature Page, dated as of February 14, 1998. (1)
2.11 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, VC Acquisition Corp.,
Varilease Corporation, and the Stockholders of such company
listed on the Signature Page, dated as of February 14, 1998.
(1)
2.12 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, WAG Acquisition Corp., The
Walden Asset Group, Inc. and the Stockholders of such
company listed on the Signature Page, dated as of February
14, 1998. (1)
2.13 Agreement and Plan of Merger by and among UniCapital
Corporation, USTEC Acquisition Corp., United States Turbine
Engine Corp., James K. Neff, Carmit P. Neff and Randall P.
Fiorenza, dated as of July 27, 1998. (2)
2.14 Agreement and Plan of Reorganization by and among UniCapital
Corporation, SFC Acquisition Corp., Saddleback Financial
Corporation, Warren E. Emard and Stuart Kennedy, dated as of
July 28, 1998. (3)
2.15 Agreement and Plan of Reorganization by and among UniCapital
Corporation, JRI Acquisition Corp., HLC Financial, Inc.,
Lawrence P. Ciuffitelli and Soron Litman, dated as of July
28, 1998. (4)
2.16 Agreement and Plan of Reorganization by and among UniCapital
Corporation, MYC Acquisition Corp., The Myerson Companies,
Inc., Donald A. Myerson and Virginia Milke, dated as of
August 7, 1998. (5)
3.01 Certificate of Incorporation of UniCapital Corporation, as
amended. (1)
3.02 Bylaws of UniCapital Corporation. (1)
4.01 Credit Agreement by and among UniCapital Corporation,
NationsBank, National Association and the Lenders party
thereto, dated as of June 10, 1998. (6)
4.02 Transfer and Administration Agreement among Kitty Hawk
Funding Corporation, UCP Qualifying SPE 1998-1 Limited
Partnership, UCP Operating SPE 1998-1 Limited Partnership,
Portfolio Financial Servicing Company, L.P. and NationsBank,
N.A. dated as of July 20, 1998. (6)
4.03 Loan and Security Agreement among Kitty Hawk Funding
Corporation, UCP Borrowing SPE 1998-1 Limited Partnership,
Portfolio Financial Servicing Company, L.P. and Nations
Bank, N.A. dated as of July 10, 1998. (6)
4.04 Credit Agreement by and among UniCapital Corporation, First
Security Bank, National Association, as Trustee,
NationsBank, National Association, as Agent and as Lender,
and the Lenders party thereto, dated as of June 10, 1998. *
</TABLE>
32
<PAGE> 34
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
<C> <S>
4.05 Credit Agreement by and among UniCapital Corporation, First
Security Bank, National Association, as Trustee, Lehman
Commercial Paper Inc., as Agent and as Lender, and the
Lenders party thereto, dated as of October 6, 1998. *
10.01 Employment Agreement between UniCapital Corporation and
Theodore J. Rogenski, effective as of May 20, 1998. +(7)
10.02 Employment Agreement between UniCapital Corporation and
Bruce E. Kropschot, effective as of May 20, 1998. +(7)
10.03 Employment Agreement between UniCapital Corporation and
Martin Kalb, effective as of May 20, 1998. +(7)
10.04 Employment Agreement between UniCapital Corporation and
Steven E. Hirsch, effective as of May 20, 1998. +(7)
10.05 UniCapital Corporation 1997 Executive Non-Qualified Stock
Option Plan. (1)
10.06 Employment Agreement between UniCapital Corporation and
Edward A. Jaeckel, effective as of February 1, 1999. +*
10.07 UniCapital Corporation 1998 Long-Term Incentive Plan. +(1)
10.08 UniCapital Corporation 1998 Non-Employee Directors' Stock
Plan. +(1)
10.09 UniCapital Corporation 1998 Employee Stock Purchase Plan.
(1)
10.10 Employment Agreement between UniCapital Corporation and
Robert J. New, effective as of May 20, 1998. +(7)
10.11 Employment Agreement between UniCapital Corporation and
Jonathan New, effective as of May 20, 1998. +(7)
10.11(a) First Amendment to Employment Agreement between UniCapital
Corporation and Jonathan New, dated September 16, 1998. +*
10.12 Employment Agreement between UniCapital Corporation and
Stuart L. Cauff, effective as of May 20, 1998. +(7)
21.01 Subsidiaries.*
23.01 Consent of PricewaterhouseCoopers LLP.*
</TABLE>
- - -------------------------
+ Management contract or compensatory plan or arrangement.
* Filed herewith.
(1) Incorporated by reference to exhibit with corresponding number filed with
Amendment No. 1 to the registrant's Registration Statement on Form S-1 (File
No. 333-46603), as filed with the Commission on April 3, 1998.
(2) Incorporated by reference to Exhibit 2.01 to the Company's Current Report on
Form 8-K dated July 27, 1998 (File No. 001-13973).
(3) Incorporated by reference to Exhibit 2.02 to the Company's Current Report on
Form 8-K dated July 27, 1998 (File No. 001-13973).
(4) Incorporated by reference to Exhibit 2.03 to the Company's Current Report on
Form 8-K dated July 27, 1998 (File No. 001-13973).
(5) Incorporated by reference to Exhibit 2.04 to the Company's Current Report on
Form 8-K dated July 27, 1998 (File No. 001-13973).
(6) Incorporated by reference to exhibit with corresponding number filed with
the Company's Form 10-Q as filed with the Commission on August 14, 1998.
33
<PAGE> 35
(7) Incorporated by reference to the exhibit with corresponding number filed
with Amendment No. 1 to the Company's Registration Statement on Form S-1
(File. No. 333-53779), as filed with the Commission on June 9, 1998.
(B) REPORTS ON FORM 8-K
The Company did not file any Reports on Form 8-K during the quarter ended
December 31, 1998.
34
<PAGE> 36
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Miami,
State of Florida on March 31, 1999.
UNICAPITAL CORPORATION
By: /s/ JONATHAN NEW
------------------------------------
Jonathan New
Chief Financial Officer
Each person whose signature appears below hereby appoints Robert J. New and
Jonathan New and both of them, either of whom may act without the joinder of the
other, as such person's true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for such person and in such person's
name, place and stead, in any and all capacities, to sign any and all amendments
to this Annual Report on Form 10-K, and to file the same, with all exhibits
thereto and all other documents in connection therewith, with the Commission,
granting unto said attorneys-in-fact and agents full power and authority to
perform each and every act and thing appropriate or necessary to be done, as
fully and for all intents and purposes as such person might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitute or substitutes may lawfully do or cause to de done by
virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>
/s/ ROBERT J. NEW Chairman and Chief Executive March 31, 1999
- - ---------------------------------- Officer and a Director (Principal
Robert J. New Executive Officer)
/s/ JONATHAN NEW Chief Financial Officer March 31, 1999
- - ---------------------------------- (Principal Financial Officer)
Jonathan New
/s/ STUART L. CAUFF Director March 31, 1999
- - ----------------------------------
Stuart L. Cauff
/s/ BRUCE E. KROPSCHOT Director March 31, 1999
- - ----------------------------------
Bruce E. Kropschot
/s/ THEODORE J. ROGENSKI Director March 31, 1999
- - ----------------------------------
Theodore J. Rogenski
/s/ ROY L. BURGER Director March 31, 1999
- - ----------------------------------
Roy L. Burger
</TABLE>
35
<PAGE> 37
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>
/s/ VINCENT W. EADES Director March 31, 1999
- - ----------------------------------
Vincent W. Eades
/s/ RICHARD C. EMERY Director March 31, 1999
- - ----------------------------------
Richard C. Emery
/s/ ROBERT F. KOPP Director March 31, 1999
- - ----------------------------------
Robert F. Kopp
/s/ JONATHAN J. LEDECKY Director March 31, 1999
- - ----------------------------------
Jonathan J. Ledecky
/s/ ANTHONY K. SHRIVER Director March 31, 1999
- - ----------------------------------
Anthony K. Shriver
/s/ ROBERT W. VANHELLEMONT Director March 31, 1999
- - ----------------------------------
Robert W. VanHellemont
</TABLE>
36
<PAGE> 38
UNICAPITAL CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Certified Public Accountants.......... F-2
Consolidated Balance Sheets................................. F-3
Consolidated Statements of Operations....................... F-4
Consolidated Statements of Cash Flows....................... F-5
Consolidated Statements of Stockholders' Equity............. F-7
Notes to Consolidated Financial Statements.................. F-8
</TABLE>
F-1
<PAGE> 39
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and
Stockholders of UniCapital Corporation
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of UniCapital
Corporation and its subsidiaries at December 31, 1998 and 1997, and the results
of their operations and their cash flows for the year ended December 31, 1998
and the period from inception (October 9, 1997) to December 31, 1997, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Ft. Lauderdale, Florida
February 3, 1999
F-2
<PAGE> 40
UNICAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1998 1997
---------- -------
(DOLLARS IN
THOUSANDS, EXCEPT
SHARE DATA)
<S> <C> <C>
ASSETS
Cash and cash equivalents................................... $ 9,772 $ 30
Accounts receivable......................................... 41,987 --
Notes receivable............................................ 9,647 --
Net investment in direct financing and sales-type leases.... 373,113 --
Equipment under operating leases, net....................... 430,229 --
Equipment held for sale or lease............................ 79,897 --
Investments................................................. 29,548 --
Property and equipment, net................................. 8,433 --
Goodwill, net of accumulated amortization of $10,119........ 613,646 --
Deposits and other assets................................... 73,251 601
---------- -------
Total assets............................................ $1,669,523 $ 631
========== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Recourse debt............................................... $ 196,279 $ --
Non-recourse and limited recourse debt...................... 471,043 --
Accounts payable and accrued expenses....................... 84,967 355
Security and other deposits................................. 24,473 --
Income taxes payable........................................ 6,353 --
Deferred income taxes....................................... 66,522 --
Other liabilities........................................... 2,598 --
---------- -------
Total liabilities....................................... 852,235 355
---------- -------
Commitments and contingencies (Notes 19 and 22)............. -- --
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, 20,000,000 shares
authorized, no shares issued and outstanding.............. -- --
Common stock, $.001 par value, 200,000,000 shares
authorized, 51,433,539 and 5,276,250 shares issued and
outstanding, respectively................................. 51 5
Additional paid-in capital.................................. 796,960 2,537
Stock subscription notes receivable......................... (3,443) (129)
Accumulated other comprehensive income...................... 1,064 --
Retained earnings (deficit)................................. 22,656 (2,137)
---------- -------
Total stockholders' equity.............................. 817,288 276
---------- -------
Total liabilities and stockholders' equity.............. $1,669,523 $ 631
========== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE> 41
UNICAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
YEAR ENDED (OCTOBER 9, 1997)
DECEMBER 31, 1998 TO DECEMBER 31, 1997
----------------- --------------------
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
Finance income from direct financing and
sales-type leases............................. $ 30,027 $ --
Rental income from operating leases............. 68,003 --
Sales of equipment.............................. 365,306 --
Gain on sale of leases.......................... 23,862 --
Fees, commissions and remarketing income........ 15,639 --
Interest and other income....................... 8,093 --
----------- ----------
Total revenues............................. 510,930 --
----------- ----------
Cost of operating leases........................ 27,841 --
Cost of equipment sold.......................... 318,383 --
Interest expense................................ 35,453 --
Selling, general and administrative expenses.... 63,347 2,137
Goodwill amortization........................... 10,119 --
----------- ----------
Total expenses............................. 455,143 2,137
----------- ----------
Income (loss) from operations................... 55,787 (2,137)
Equity in income from minority-owned
affiliates.................................... 1,013 --
----------- ----------
Income (loss) before taxes...................... 56,800 (2,137)
Provision for income taxes...................... 32,007 --
----------- ----------
Net income (loss)..................... $ 24,793 $ (2,137)
=========== ==========
Earnings (loss) per common share, basic......... $ 0.73 $ (1.62)
Earnings (loss) per common share, diluted....... $ 0.72 $ (1.62)
Weighted average shares outstanding, basic...... 33,841,448 1,319,063
Weighted average shares outstanding, diluted.... 34,353,714 1,319,063
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE> 42
UNICAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
(OCTOBER 9, 1997)
YEAR ENDED TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................... $ 24,793 $(2,137)
Adjustments to reconcile net income (loss) to net cash used
in operating activities:
Depreciation and amortization............................. 43,864 --
Deferred income tax expense............................... 22,123 --
Provision for credit losses............................... 814 --
Compensation expenses related to equity issuances......... 17,308 2,133
Gain on sale of lease financing receivables............... (23,862) --
Gain on sale of equipment................................. (46,923) --
Equity in net earnings of minority-owned affiliates....... (1,013) --
Changes in other assets and liabilities:
Current notes and accounts receivable................... (36,686) --
Deposits and other assets............................... (21,165) (601)
Accounts payable and accrued expenses................... 12,732 355
Security and other deposits............................. 4,724 --
Income taxes payable.................................... 2,187 --
Other liabilities....................................... (27,186) --
----------- -------
Net cash used in operating activities.............. (28,290) (250)
----------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................ (6,796) --
Cash paid for acquisitions, net of cash acquired............ (393,731) --
Proceeds from sale of lease financing receivables........... 350,205 --
Proceeds from sale of equipment............................. 308,004 --
Collection of direct financing and sales-type leases, net of
finance income earned..................................... 138,103 --
Investment in direct financing and sales-type leases and
purchases of equipment for sale or lease.................. (1,106,173) --
Increase in investments, net................................ (9,325) --
----------- -------
Net cash used in investing activities.............. (719,713) --
----------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from recourse debt................................. 543,884 --
Repayment of recourse debt.................................. (496,311) --
Proceeds from non-recourse and limited recourse debt........ 483,866 --
Repayment of non-recourse and limited recourse debt......... (262,139) --
Proceeds from issuance of common stock, net of offering
costs of $11,439.......................................... 489,931 280
Repayment of subordinated debt assumed in acquisitions...... (2,002) --
Proceeds received on subscription notes receivable.......... 516 --
----------- -------
Net cash provided by financing activities.......... 757,745 280
----------- -------
Increase in cash and cash equivalents....................... 9,742 30
Cash and cash equivalents at beginning of period............ 30 --
----------- -------
Cash and cash equivalents at end of period.................. $ 9,772 $ 30
=========== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE> 43
UNICAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
YEAR ENDED (OCTOBER 9, 1997) TO
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------ --------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid for interest........................ $28,709 $ --
======= ====
Cash paid for income taxes.................... $ 5,422 $ --
======= ====
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
FOR NON-CASH ITEMS:
Stock subscription notes receivable received
as consideration for issuance of common
stock...................................... $ 3,830 $129
======= ====
Notes received as partial consideration on
sales of aircraft and aircraft engines..... $11,492 $ --
======= ====
Debt assumed by buyers as partial
consideration on sales of aircraft and
aircraft engines........................... $39,558 $ --
======= ====
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE> 44
UNICAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
STOCK ACCUMULATED
ADDITIONAL SUBSCRIPTION OTHER RETAINED
COMMON PAID-IN NOTES COMPREHENSIVE EARNINGS COMPREHENSIVE
STOCK CAPITAL RECEIVABLE INCOME (DEFICIT) INCOME TOTAL
------ ---------- ---------------- ------------- --------- ------------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT INCEPTION (OCTOBER 9,
1997)........................... $-- $ -- $ -- $ -- $ --
Issuance of 5,276,250 shares of
common stock ($2,133 of
compensation expense
recorded)....................... 5 2,537 (129) -- -- 2,413
Comprehensive income:
Net loss........................ -- -- -- -- (2,137) $(2,137) (2,137)
-------
Total comprehensive
income.................... $(2,137)
--- -------- ------- ------ ------- ======= --------
BALANCE AT DECEMBER 31, 1997...... 5 2,537 (129) -- (2,137) 276
Issuance of 1,522,500 shares of
common stock ($15,248 of
compensation expense
recorded)....................... 2 20,367 (3,830) -- -- 16,539
Issuance of options ($2,060 of
compensation expense
recorded)....................... -- 2,060 -- -- -- 2,060
Issuance of 28,000,000 shares of
common stock, net of
underwriters discounts and
offering costs.................. 28 488,613 -- -- -- 488,641
Issuance of 13,340,901 shares of
common stock to Founding
Companies in connection with
mergers......................... 13 228,119 -- -- -- 228,132
Issuance of 3,293,888 shares of
common stock for additional
acquisitions.................... 3 55,264 -- -- -- 55,267
Payments received................. -- -- 516 -- -- 516
COMPREHENSIVE INCOME:
Net income...................... -- -- -- -- 24,793 $24,793 24,793
Other comprehensive income:
Net unrealized gain on
securities, net of deferred
taxes of $653................. -- -- -- 1,064 -- 1,064 1,064
-------
Total comprehensive
income.................... $25,857
=======
--- -------- ------- ------ ------- --------
BALANCE AT DECEMBER 31, 1998...... $51 $796,960 $(3,443) $1,064 $22,656 $817,288
=== ======== ======= ====== ======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-7
<PAGE> 45
UNICAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1--ORGANIZATION AND NATURE OF BUSINESS
UniCapital Corporation, incorporated in Delaware, was founded in October
1997 to create a national operator and integrator of equipment leasing and
specialty finance businesses serving the commercial market. UniCapital
Corporation acquired twelve equipment leasing, specialty finance and related
businesses (the "Founding Companies") upon consummation of an initial public
offering (the "Offering") of its common stock ("Common Stock") in May 1998.
Subsequent to the Offering, UniCapital Corporation acquired, through merger or
purchase, five additional companies, continuing the expansion of its national
operations. UniCapital Corporation, the Founding Companies and the subsequently
acquired companies are referred to collectively as the "Company".
The Company originates, acquires, sells and services equipment leases and
arranges structured financing in the computer and telecommunications equipment,
large ticket and structured finance, middle market and small ticket areas of the
equipment leasing industry. In addition, the Company provides lease
administration and processing services, which include the servicing of certain
leases sold to third parties. The Company's leases and structured financing
arrangements cover a broad range of equipment, including aircraft and aircraft
equipment, computer and telecommunications equipment, construction and
manufacturing equipment, office equipment, tractor trailers, printing equipment,
car washes, petroleum retail equipment and vending machines.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements include the accounts of UniCapital
Corporation and its wholly owned subsidiaries, as well as the results of
operations of the Company's investments accounted for under the equity method.
All significant intercompany accounts and transactions have been eliminated in
consolidation. The consolidated financial statements have been prepared in
accordance with generally accepted accounting principles.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. While management believes that the estimates and related
assumptions used in the preparation of these financial statements are
appropriate, actual results could differ from those estimates. Estimates are
made in the assessment of collectibility of receivables and financing leases,
recovery of estimated unguaranteed residual values of leased equipment,
depreciable lives, impairment of goodwill and other intangible assets, and the
related estimated lives of such assets, and estimates of expected maintenance
and overhaul costs in connection with certain leases of aircraft.
Comprehensive Income
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income", for the year ended December
31, 1998. The Company has elected to present comprehensive income in the
consolidated statements of
F-8
<PAGE> 46
stockholders' equity, with the accumulated balance of other comprehensive income
reported as a separate component of stockholders' equity in the consolidated
balance sheets.
Cash and Cash Equivalents
The Company classifies highly liquid investments with original maturities
of three months or less from the date of purchase as cash equivalents.
Direct Financing Leases
Net investment in direct financing leases includes gross rentals
receivable, estimates of unguaranteed equipment residual values and unamortized
initial direct costs less the unamortized portion of unearned finance income,
and is reflected net of the allowance for credit losses. Unearned finance income
represents the excess of the gross rentals receivable plus the estimated
unguaranteed equipment residual value over the cost of the equipment acquired.
Initial direct costs are capitalized and amortized over the lease term under the
interest method.
Revenue from direct financing leases is recognized over the lease term
under the interest method which results in a level rate of return on the net
investment in the lease.
Sales-type Leases
Net investment in sales-type leases includes gross rentals receivable and
estimates of unguaranteed equipment residual values less unearned finance
income, and is reflected net of the allowance for credit losses. Unearned
finance income represents the excess of the gross rentals receivable plus the
estimated unguaranteed equipment residual value over the present value of these
two components.
Revenue under sales-type leases consists of the present value of the total
contractual lease payments which is recognized at lease inception. Cost
recognized at lease inception consists of the equipment's net book value at
lease inception, less the present value of the equipment's estimated
unguaranteed equipment residual value, and related initial direct costs.
Unearned finance income is recognized as revenue over the term of the lease
under the interest method.
Operating Leases
Equipment under operating leases is recorded at cost and depreciated on a
straight-line basis over the equipment's estimated useful life to its estimated
salvage value. Generally, aircraft and aircraft equipment are depreciated over
estimated useful lives of 30 years from the date of manufacture to a 15%
estimated salvage value. Technology equipment is generally depreciated over an
estimated useful life of 3 to 7 years. In estimating the equipment's salvage
value for all types of equipment, the Company relies on historical experience by
equipment type and manufacturer and, where available, valuations by independent
appraisers, adjusted for known trends. The Company's estimates are reviewed
continuously to ensure continued appropriateness; however, the amounts the
Company will ultimately realize could differ from those estimates.
Revenue under operating leases is recognized as rental income on a
straight-line basis over the lease term. In addition, certain contingent rental
payments based on measures of usage of certain types of equipment are recognized
as rental income as received. Costs of operating leases include principally
depreciation of the leased equipment.
Equipment Held for Sale or Lease
Equipment held for sale or lease includes equipment purchased for lease and
equipment off-lease and is stated at the lower of cost or market.
F-9
<PAGE> 47
Investments
All investments in securities are classified as available-for-sale in
accordance with Statement of Financial Accounting Standards No. 115 ("SFAS
115"), "Accounting for Certain Investments in Debt and Equity Securities".
Available-for-sale securities are recorded at fair value with unrealized holding
gains or losses, net of the related tax effects, reported as a component of
accumulated other comprehensive income in a separate component of stockholders'
equity. Realized gains and losses from the sale of available-for-sale securities
are determined on a specific identification basis and included in the
consolidated statements of operations.
Derivatives
Derivative financial instruments, as defined in Statement of Financial
Accounting Standards No. 119, "Disclosure about Derivative Financial Instruments
and Fair Value of Financial Instruments", used by the Company primarily include
interest rate swaps and forward foreign exchange contracts. These derivative
financial instruments are used as hedges on specific transactions to
synthetically alter the repricing characteristics of the related assets and
liabilities. Risks arise from the use of such instruments from the possible
inability of the counterparties to meet the terms of their contracts and from
market movements in values and interest rates. Management believes, however,
that the potential losses from such risks related to derivative instruments held
at December 31, 1998 are not significant.
In accounting for interest rate swaps, the net differential to be paid or
received on the interest rate swap is recognized as a yield adjustment to the
related asset or liability over the life of the swap agreement. If the related
asset or liability is disposed of, the swap agreement is marked to market.
Thereafter, the interest rate swap is accounted for in the consolidated
financial statements at its fair value with any unrealized gains and losses
recognized in the period incurred. If the interest rate swap agreement is
terminated, the gain or loss is deferred and amortized over the remaining life
of the related asset or liability.
Forward foreign exchange contracts are accounted for according to Statement
of Financial Accounting Standards No. 52 ("SFAS 52"), "Foreign Currency
Translation". In accordance with SFAS 52, unrealized gains or losses on forward
foreign exchange contracts that are intended to hedge an identifiable foreign
currency commitment are deferred and included in the measurement of the related
foreign currency transaction.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation on property and equipment is recognized on a straight-line basis
over the estimated useful lives of the assets which generally range from 3 to 7
years.
Goodwill
Goodwill represents the excess of purchase price over fair value of
identifiable tangible and intangible assets and liabilities acquired.
Amortization of goodwill is recognized on a straight-line basis over the
expected periods to be benefited, generally 15 to 40 years. The Company
periodically reviews goodwill for impairment whenever events or changes in
circumstances indicate that it may not be recoverable. In such an event,
goodwill in excess of expected operating cash flows is considered to be impaired
and is written down to fair value, which is determined based on discounted
future cash flows. There was no impairment at December 31, 1998.
F-10
<PAGE> 48
Income Taxes
Income taxes are accounted for using the asset and liability method under
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes". Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Valuation allowances are provided to reduce deferred taxes to
the amount expected to be realized.
Transfers of Lease Financing Receivables
The Company accounts for transfers of lease financing receivables in
accordance with Statement of Financial Accounting Standards No. 125 ("SFAS
125"), "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities." Under SFAS 125, upon a transfer of financial
assets, the Company recognizes the financial and servicing assets it controls
and the liabilities it has incurred, derecognizes financial assets when control
has been surrendered and derecognizes liabilities when extinguished. In
addition, the Company initially measures retained interests in the transferred
assets by allocating the lease financing receivables carrying amount to
interests retained and sold based on relative fair values at the date of
transfer.
Retained interests in certain cash flows acquired in connection with a
transfer of lease receivables, if any, are initially recorded based upon the
relative fair value approach noted above and are subsequently accounted for as
available-for-sale securities in accordance with SFAS 115.
Earnings Per Common Share
Earnings per share is calculated in accordance with Statement of Financial
Accounting Standards No. 128 ("SFAS 128"), "Earnings per Share". SFAS 128
requires a dual presentation of basic and diluted earnings per share.
Basic earnings per share is computed by dividing net income available to
common stockholders by the weighted average number of common shares outstanding
for the period. This calculation excludes any potential dilution from securities
or other contracts to issue common stock.
Diluted earnings per share reflects the potential dilution that could occur
if securities or other contracts to issue common stock were exercised or
converted into common stock. Diluted earnings per share is calculated as net
income available to common stockholders divided by the weighted average of
common shares outstanding for the period plus the effect of dilutive shares as
determined using the treasury stock method.
Stock Options
Statement of Financial Accounting Standards No. 123 ("SFAS 123"),
"Accounting for Stock Based Compensation", allows entities to choose between a
fair value based method of accounting for employee stock options or similar
equity instruments and the intrinsic value based method of accounting prescribed
by Accounting Principles Board Opinion No. 25 ("APB No. 25"), "Accounting for
Stock Issued to Employees". Entities electing to account for employee stock
options or similar equity instruments under APB No. 25 must make pro forma
disclosures of net income and earnings per share as if the fair value method of
accounting
F-11
<PAGE> 49
under SFAS 123 had been applied. The Company has elected to apply the provisions
of APB Opinion No. 25 in the preparation of its consolidated financial
statements and provide pro forma disclosure of net income and earnings per share
as required under SFAS 123 in the notes to the consolidated financial
statements.
Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures About
Fair Values of Financial Instruments", requires disclosure of the fair value of
financial instruments, both assets and liabilities recognized and not recognized
on the balance sheet, for which it is practicable to estimate fair value. The
carrying values of the Company's financial instruments at December 31, 1998
approximate fair value due to their short-term maturity and variable-interest
rate characteristics.
NOTE 3--ACQUISITIONS
During 1998, UniCapital Corporation acquired twelve equipment leasing,
specialty finance and related businesses in connection with the Offering, and
subsequent to the Offering, acquired five additional companies continuing the
expansion of its national operations. Each of these acquisitions has been
accounted for using the purchase method of accounting. Under the purchase method
of accounting, the results of operations of acquired businesses are included in
the Company's results from their respective acquisition dates, with unaudited
pro forma financial information presented in the notes to the consolidated
financial statements to reflect the pro forma results of operations as if the
acquisitions had occurred at the beginning of the period (see Note 4). The
purchase price of each acquisition has been allocated to the fair values of
identifiable tangible and intangible assets and liabilities acquired, with the
excess unallocated purchase price recorded as goodwill.
F-12
<PAGE> 50
The following table presents the aggregate consideration paid in connection
with the Company's acquisitions during 1998:
<TABLE>
<CAPTION>
SHARES OF VALUE OF GOODWILL
COMMON COMMON TOTAL DATE OF AMORTIZATION
CASH STOCK STOCK CONSIDERATION ACQUISITION PERIOD
------ ---------- -------- ------------- ----------- ------------
(IN MILLIONS, EXCEPT SHARE DATA) (IN YEARS)
<S> <C> <C> <C> <C> <C> <C>
AIR GROUP:
Cauff Lippman Aviation, Inc............ $ 51.5 1,684,210 $ 28.8 $ 80.3 5/20/98 40
Jumbo Jet (and related entities)....... 15.4 -- -- 15.4 6/30/98 40
The NSJ Group, Inc..................... 16.0 561,978 9.6 25.6 5/20/98 40
AIRCRAFT ENGINE GROUP:
United States Turbine Engine Corp...... 50.0 2,739,726 46.0 96.0 7/27/98 20
TECHNOLOGY AND FINANCE GROUP:
American Capital Resources, Inc........ 20.4 1,071,051 18.3 38.7 5/20/98 40
Jacom Computer Services, Inc........... 128.0 3,368,368 57.6 185.6 5/20/98 40
Matrix Funding Corporation............. 19.4 1,035,811 17.7 37.1 5/20/98 40
Municipal Capital Markets Group,
Inc.................................. 7.0 370,656 6.3 13.3 5/20/98 20
Varilease Corporation.................. 36.8 1,934,371 33.1 69.9 5/20/98 40
The Walden Asset Group, Inc............ 21.0 1,105,182 18.9 39.9 5/20/98 40
BUSINESS CREDIT GROUP:
Boulder Capital Group, Inc............. 7.1 371,053 6.3 13.4 5/20/98 40
HLC Financial, Inc..................... 4.3 224,096 3.8 8.1 7/28/98 40
K.L.C., Inc. (d/b/a Keystone).......... 27.9 1,468,420 25.1 53.0 5/20/98 40
Merrimac Financial Associates.......... -- 178,750 3.1 3.1 5/20/98 40
The Myerson Companies, Inc. (d/b/a BSB
Leasing)............................. 3.1 167,740 2.9 6.0 8/7/98 40
Saddleback Financial Corporation....... 3.0 162,326 2.7 5.7 7/28/98 40
CORPORATE DIVISION:
Portfolio Financial Servicing Company,
L.P.................................. -- 191,051 3.2 3.2 5/19/98 15
------ ---------- ------ ------
$410.9 16,634,789 $283.4 $694.3
====== ========== ====== ======
</TABLE>
In addition to the consideration presented in the table above, the selling
shareholders of each acquired company, excluding Portfolio Financial Servicing
Company, L.P. and Jumbo Jet (and related entities), may, pursuant to certain
earnout arrangements, receive additional consideration based on targeted levels
of earnings. The earnout arrangements are generally effective for a two year
period, except for Cauff Lippman Aviation, Inc., The NSJ Group, Inc., United
States Turbine Engine Corp. and HLC Financial, Inc., which will be effective
over a three year period. Contingent consideration, if earned, will be paid in a
combination of cash and the Company's Common Stock and recorded as additional
purchase price. As of December 31, 1998, the Company estimated that certain of
the acquired companies had earned, in the aggregate, approximately $21.2 million
in contingent consideration for the year ended December 31, 1998 to be paid in a
combination of $12.4 million in cash and Common Stock valued at $8.8 million.
The determination of diluted earnings per share for the year ended December 31,
1998 includes the dilutive effect of the contingent shares expected to be issued
pursuant to the earnout arrangements.
F-13
<PAGE> 51
The following table presents the fair value of assets acquired, fair value
of liabilities assumed, common stock issued and the net cash paid, in the
aggregate, for acquisitions in 1998 (in thousands):
<TABLE>
<S> <C>
Fair value of assets acquired............................ $1,312,949
Fair value of liabilities assumed........................ (618,616)
Common stock issued...................................... (283,399)
----------
Cash paid for acquisitions............................... 410,934
Cash and cash equivalents acquired....................... (17,203)
----------
Total cash paid for acquisitions, net of cash
acquired.......................................... $ 393,731
==========
</TABLE>
Following is management's brief description of each company acquired during
1998:
Air Group:
Cauff Lippman Aviation, Inc. provides operating lease financing for used
commercial jet aircraft and jet aircraft engines, as well as brokering, advisory
and remarketing services to domestic and foreign commercial airlines, aircraft
lessors and institutional investors and engages in the purchase and sale of
aircraft for its own account.
Jumbo Jet (which includes Jumbo Jet Leasing LP, Jumbo Jet, Inc., CL
Aircraft Marketing LP and CL Aircraft Marketing, Inc.) provides lease financing
for the acquisition of used commercial aircraft.
The NSJ Group, Inc. provides lease financing for used commercial jet
aircraft and jet aircraft engines to domestic and foreign commercial airlines
and engages in the purchase and sale of aircraft for its own account.
Aircraft Engine Group:
United States Turbine Engine Corp. engages in the purchase, refurbishment,
sales and lease of commercial aircraft engines and provides a broad range of
engine management services to airlines, financial institutions and other
operating lessors.
Technology and Finance Group:
American Capital Resources, Inc. provides lease and secured financing for
equipment, primarily printing presses, to companies in the printing, packaging
and paper converting industries.
Jacom Computer Services, Inc. provides lease financing for computer and
telecommunications equipment to large and middle market companies, including
financial institutions, throughout the United States.
Matrix Funding Corporation provides lease financing for a variety of
equipment, primarily computer, communication and electronic equipment, to
companies throughout the United States.
Municipal Capital Markets Group, Inc. arranges structured financing,
primarily for community-based mental health/mental retardation facilities and
correctional facilities.
Varilease Corporation provides lease financing for computer and
telecommunications equipment to Fortune 1000 companies and other businesses
throughout the United States and Canada.
The Walden Asset Group, Inc. provides lease financing for a variety of
equipment, including communications, computer and manufacturing equipment, to
Fortune 500 and other businesses throughout the United States.
F-14
<PAGE> 52
Business Credit Group:
Boulder Capital Group, Inc. provides lease financing for petroleum retail
equipment, including car washes, fuel dispensers and convenience store operating
equipment, to petroleum retail businesses.
HLC Financial, Inc. provides lease financing primarily for computer systems
and related office technology equipment to customers in the automobile
dealership and hospitality industries.
K.L.C., Inc., d/b/a Keystone, provides lease financing for a variety of
equipment, primarily tractor trailers, embroidery machines and construction
equipment, to companies throughout the United States.
Merrimac Financial Associates provides equipment financing to operating
companies engaged in the coin-operated, vending, amusement and coffee service
businesses.
Myerson Companies, Inc., d/b/a/ BSB Leasing, provides equipment lease
financing to small to medium size companies throughout the United States.
Saddleback Financial Corporation provides lease and equipment acquisition
financing for a variety of equipment utilized in various industries, including
computers, machine tools, printing, video, automotive diagnostic and electronic
equipment.
Corporate Division:
Portfolio Financial Servicing Company, L.P. provides lease administration
and processing services, including lease accounting for both financial reporting
and federal income tax purposes, lien searches, UCC filings, asset tracking,
insurance tracking, preparation of sales, use and property tax returns,
invoicing and collections.
NOTE 4--UNAUDITED PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma financial information for the year ended December
31, 1998 and 1997 includes the results of UniCapital Corporation combined with
the Founding Companies and subsequent acquisitions as if all acquisitions had
occurred at January 1, 1997. This unaudited pro forma financial information
includes the effects of (a) the acquisition of the Founding Companies; (b) the
Offering; (c) the subsequent acquisitions; (d) certain reductions in salaries,
bonuses and benefits to the stockholders and managers of the Founding Companies
and the subsequent acquisitions to which they have contractually agreed
prospectively; (e) amortization of goodwill; (f) the incremental provision for
federal and state income taxes assuming all entities were subject to corporate
federal and state income taxes; and (g) the incremental costs of being a public
company.
The unaudited pro forma financial information may not be comparable to and
may not be indicative of the Company's results of operations subsequent to the
acquisitions because the Founding Companies and the subsequent acquisitions were
not under common control or management and had different tax and capital
structures during the periods presented.
F-15
<PAGE> 53
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1998 1997
---- ----
(IN THOUSANDS, EXCEPT
SHARE DATA)
<S> <C> <C>
Total revenues................................... $672,081 $267,705
Income before taxes.............................. $100,413 $ 49,422
Net income....................................... $ 55,372 $ 24,150
Earnings per common share, basic................. $ 1.10 $ 0.48
Earnings per common share, diluted............... $ 1.08 $ 0.48
</TABLE>
NOTE 5--LEASE FINANCING RECEIVABLES
The Company's balance of net investment in direct financing and sales-type
leases was comprised of the following components at December 31, 1998 (in
thousands):
<TABLE>
<S> <C>
Future minimum lease rentals receivable.................... $369,249
Estimated unguaranteed residual values..................... 64,804
Initial direct costs....................................... 3,438
Unearned finance income.................................... (59,540)
Allowance for credit losses................................ (4,838)
--------
Net investment in direct financing and sales-type leases... $373,113
========
</TABLE>
At December 31, 1998, future scheduled minimum lease rentals receivable on
direct financing and sales-type leases were as follows (in thousands):
<TABLE>
<S> <C>
1999....................................................... $152,441
2000....................................................... 106,925
2001....................................................... 61,465
2002....................................................... 28,821
2003....................................................... 13,543
Thereafter................................................. 6,054
--------
Total................................................. $369,249
========
</TABLE>
The following table sets forth the Company's allowance for credit losses on
direct financing and sales-type lease receivables for the year ended December
31, 1998 (in thousands):
<TABLE>
<S> <C>
Balance at December 31, 1997................................ $ --
Allowances related to leases acquired through business
combinations.............................................. 5,641
Provision for credit losses................................. 814
Charge-offs, net of recoveries.............................. (1,617)
-------
Balance at December 31, 1998................................ $ 4,838
=======
</TABLE>
F-16
<PAGE> 54
NOTE 6--EQUIPMENT UNDER OPERATING LEASES
The cost and accumulated depreciation of equipment under operating leases
at December 31, 1998 are as follows (in thousands):
<TABLE>
<S> <C>
Aircraft................................................... $364,851
Aircraft engines........................................... 6,500
Technology................................................. 81,748
Other...................................................... 1,071
--------
454,170
Accumulated depreciation................................... (23,941)
--------
$430,229
========
</TABLE>
At December 31, 1998, future scheduled minimum lease contract payments to
be received under operating leases were as follows (in thousands):
<TABLE>
<S> <C>
1999....................................................... $ 70,869
2000....................................................... 46,264
2001....................................................... 32,305
2002....................................................... 19,338
2003....................................................... 15,557
Thereafter................................................. 1,558
--------
Total................................................. $185,891
========
</TABLE>
Included in income for the year ended December 31, 1998 was $13.3 million
of contingent rentals. Depreciation expense related to equipment under operating
leases recorded during the year ended December 31, 1998 was $23.9 million.
NOTE 7--EQUIPMENT HELD FOR SALE OR LEASE
The following is a summary of equipment held for sale or lease at December
31, 1998 (in thousands):
<TABLE>
<S> <C>
Aircraft.................................................... $14,556
Aircraft engines............................................ 26,310
Technology.................................................. 32,637
Other....................................................... 6,614
-------
80,117
Accumulated depreciation.................................... (220)
-------
$79,897
=======
</TABLE>
NOTE 8--INVESTMENTS
The following is a summary of investments at December 31, 1998 (in
thousands):
<TABLE>
<S> <C>
Available-for-sale securities............................... $16,058
Investment in joint ventures and minority-owned
affiliates................................................ 13,490
-------
Total.................................................. $29,548
=======
</TABLE>
F-17
<PAGE> 55
Available-for-sale Securities
The following is a summary of available-for-sale securities held at
December 31, 1998 (in thousands):
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED FAIR EXPECTED
COST GAINS LOSSES VALUE MATURITY
------- ---------- ---------- ------- ---------------------
<S> <C> <C> <C> <C> <C>
Retained Certificates (Note
11).......................... $11,189 $1,452 $ -- $12,641 January 1, 1999 to
December 31, 2008
Municipal debt securities...... 1,898 163 -- 2,061 December 31, 2023
Equity securities, with no
maturity..................... 1,254 129 (27) 1,356
------- ------ ---- -------
$14,341 $1,744 $(27) $16,058
======= ====== ==== =======
</TABLE>
There were no sales of available-for-sale securities during the year ended
December 31, 1998.
Investment in Joint Ventures and Minority-owned Affiliates
Joint ventures and minority-owned affiliates represent companies in the
same line of business as the Company and are accounted for under the equity
method.
NOTE 9--PROPERTY AND EQUIPMENT
The following is a summary of property and equipment at December 31, 1998
(in thousands):
<TABLE>
<CAPTION>
ESTIMATED
LIFE
---------
<S> <C> <C>
Furniture and fixtures........................ $2,718 7 years
Computer and office equipment................. 4,389 3-5 years
Leasehold improvements and other.............. 2,234 3-5 years
------
9,341
Accumulated depreciation...................... (908)
------
$8,433
======
</TABLE>
Depreciation expense related to property and equipment recorded during the
year ended December 31, 1998 was $0.9 million.
NOTE 10--DEBT
Credit Facilities
During June 1998, the Company secured a commitment from a commercial bank
to provide $1.2 billion in credit facilities ("Senior Credit Facilities") which
consist of the following sub-facilities: (i) a $300 million revolving credit
facility, which matures in June 2001, primarily to finance acquisitions and
provide working capital, subject to certain limitations, ("Revolving Facility");
(ii) a $300 million large ticket warehouse facility, with a term of 364 days,
primarily to finance the purchase and leasing of aircraft and aircraft engines
("Warehouse Facility"); and (iii) two asset-backed commercial paper facilities
totaling $600 million to finance small ticket and middle market leases,
consisting of a $250 million equipment lease receivable financing facility, with
a term of 364 days, ("Financing Facility"), and a $350 million equipment lease
receivable purchase facility ("Purchase Facility"). As discussed in Note 11, the
transfer of financing lease receivables into the Purchase Facility is treated as
a sale under the provisions
F-18
<PAGE> 56
of SFAS 125 and, accordingly, is not recorded as debt. In the event the
revolving term of the Warehouse Facility is not extended, the outstanding
balance will convert into a one-year fixed-rate term loan at prevailing rates.
Management expects to renew or extend these facilities upon expiration.
During October 1998, the Company also secured a commitment from another
financial institution to provide a $500 million credit facility ("Aircraft
Facility"), with a term of 364 days, primarily to finance the purchase and
leasing of aircraft. Management expects to renew or extend this facility upon
expiration.
Substantially all of the Company's assets, including receivables under
direct financing and sales type leases and equipment under operating leases, are
pledged against the Company's obligations under the credit facilities discussed
above. In addition, the credit facilities contain covenants, including, but not
limited to, limitations on liens, investments, dividends and other restricted
payments, incurrence of recourse indebtedness, transactions with affiliates and
acquisitions, as well as various financial covenants customary for transactions
of this type, including ratios of debt with recourse or limited recourse to cash
flow, total debt to net worth and cash flow to fixed charges, and maintenance at
all times of a minimum net worth. The amount of dividends that the Company may
declare must be approved by the financial institution providing the Senior
Credit Facilities. The Company was in compliance with the covenants under these
facilities at December 31, 1998.
Other Debt
The Company, from time to time, obtains non-recourse debt financing for the
acquisition of equipment with various third parties in which the underlying
equipment serves as collateral for the debt. At December 31, 1998, the Company's
balance of non-recourse debt under such arrangements included debt related to
the acquisition of aircraft and aircraft engines.
In addition, the Company, from time to time, transfers lease financing
receivables to third parties in the normal course of business. These
transactions are accounted for under the provisions of SFAS 125. Those transfers
that are accounted for as sale transactions are discussed in Note 11. Under SFAS
125, those transfers which do not meet the derecognition criteria are accounted
for as financing transactions and are included in the table below as discounted
lease receivables. Under such an arrangement, the principal and interest
obligations of the related debt are funded by the cash flows from collections on
the underlying leases which are generally collected directly by the creditor. In
the event of default by the lessee, the Company is not contractually obligated
to repay the outstanding balance of the related debt. Creditors may, however,
have recourse to the Company's retained interest, if any, in the equipment's
residual value. In addition, certain transfers contain limited-recourse
provisions (see Note 19).
F-19
<PAGE> 57
The following table summarizes the credit facilities and other debt
discussed above as of December 31, 1998 (in thousands, except interest rate
data):
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
BALANCE AT INTEREST RATE AT
DECEMBER 31, 1998 DECEMBER 31, 1998 CONTRACTUAL INTEREST RATE
----------------- ----------------- -----------------------------
<S> <C> <C> <C>
CREDIT FACILITIES:
Senior Credit Facilities:
Revolving
Facility........ $163,120 7.08% Prime plus 50 basis points or
LIBOR plus 150 basis points
Warehouse
Facility........ 52,040 7.29% Prime plus 75 basis points or
LIBOR plus 175 basis points
Financing
Facility........ 32,844 6.16% Commercial paper plus 82
basis points
Aircraft
Facility........ 134,030 7.32% Prime plus 75 basis points or
LIBOR plus 175 basis points
OTHER DEBT:
Non-recourse debt
related to
acquisition of
aircraft and
aircraft engines... 60,564 9.39% 7.53% to 11.18%
Discounted lease
receivables........ 222,399 8.02% 7.41% to 8.52%
Other notes
payable............ 2,010 6.00% 6.00%
Other recourse
debt............... 315 8.04% 8.00% to 8.25%
--------
Total........... $667,322
========
</TABLE>
The following table presents scheduled principal maturities of non-recourse
debt related to the acquisition of aircraft and aircraft engines and discounted
lease receivables outstanding at December 31, 1998 for each of the next five
years and thereafter:
<TABLE>
<CAPTION>
NON-RECOURSE DEBT
RELATED TO DISCOUNTED
AIRCRAFT AND LEASE
AIRCRAFT ENGINES RECEIVABLES OTHER DEBT TOTAL
------------------ ------------ ---------- --------
<S> <C> <C> <C> <C>
1999............................ $18,938 $101,594 $2,325 $122,857
2000............................ 18,880 65,895 -- 84,775
2001............................ 8,873 33,494 -- 42,367
2002............................ 2,389 16,150 -- 18,539
2003............................ 1,999 4,749 -- 6,748
Thereafter...................... 9,485 517 -- 10,002
------- -------- ------ --------
Total...................... $60,564 $222,399 $2,325 $285,288
======= ======== ====== ========
</TABLE>
At December 31, 1998, included in deposits and other assets in the
accompanying consolidated balance sheets are $17.5 million of deferred loan
costs incurred to secure the Senior Credit Facilities and the Aircraft Facility
discussed above. These costs are amortized over the contractual terms of those
facilities. Total amortization expense of deferred loan costs for the year ended
December 31, 1998 was $4.5 million.
F-20
<PAGE> 58
NOTE 11--SALES OF LEASE FINANCING RECEIVABLES
The Company transfers lease financing receivables to third parties in the
normal course of business, which are accounted for as sales of lease receivables
under the provisions of SFAS 125. In these transactions, the Company records a
gain on the sale of leases, and may additionally retain servicing rights and
retain certain interests in the residual cash flows of the underlying
receivables.
Under the terms of the Purchase Facility discussed in Note 10, the Company
may transfer lease financing receivables (the "Net Investment") of up to $350
million of small ticket and middle market lease receivables meeting certain
eligibility requirements. In a transfer of lease receivables to the Purchase
Facility, the Company transfers a pool of leases to a wholly-owned, bankruptcy
remote, qualifying special purpose entity. This entity then issues, for cash,
beneficial interests in the form of senior and subordinated securities, which
are collateralized by the lease receivables. The Company generally (i) retains
the right to receive any excess cash flows of the entity ("Retained
Certificate"), (ii) retains the right to service the leases transferred in
exchange for a servicing fee, and (iii) records a gain on sale. The Purchase
Facility contains restrictions customary for facilities of this type, including
limitations on liens on the leases, indebtedness, certain lease modifications
and changes in credit and collection practices. At December 31, 1998, the
Purchase Facility had an outstanding balance of $251.3 million.
Gain on Sale
Under the provisions of SFAS 125, gain on sale of lease receivables is
calculated as the difference between the proceeds received, net of related
selling expenses, and the allocable carrying amount of the related lease
receivables, determined using the fair value approach.
During the year ended December 31, 1998, the Company transferred lease
receivables with a net book value of $267.4 million to the Purchase Facility,
recognizing a gain of $18.8 million. Under these transactions, the Company
received $275 million in cash and recorded Retained Certificates of $12.6
million (see Note 8).
In addition, during the year ended December 31, 1998, the Company
transferred lease receivables with a net book value of $70.1 million to third
parties in sales transactions, receiving cash of $75.2 million and recognizing a
gain of $5.1 million.
Retained Certificates
For purposes of calculating the estimated fair value of the Retained
Certificates, management has used a discount rate of 14%. Management has also
used a range of expected losses arising from defaults, net of recoveries, of
0.40% to 2.50% per annum. Other factors, such as prepayments, generally do not
have a significant impact on the gain on sale calculation due to the
non-cancelable and full-payout nature of most of the underlying leases.
The cash flows ultimately available to the Retained Certificates are
largely dependent upon the actual default rates and recoveries experienced on
the leases held by the special purpose entity. Increases in default rates above,
or reduction in recoveries below, the Company's estimates could reduce the cash
flows available to the Retained Certificates. To the extent events occur which
cause actual Retained Certificates cash flows to be materially below those
originally estimated, the Company would record an impairment in the carrying
amount of its Retained Certificates through a charge to earnings in the period
in which the impairment occurred or became known to management. There was no
impairment at December 31, 1998.
F-21
<PAGE> 59
NOTE 12--DERIVATIVE INSTRUMENTS
Interest Rate Swaps
The Company from time to time utilizes interest rate swaps which
synthetically alter the repricing characteristics of variable-rate debt interest
obligations, effectively allowing the Company to pay a fixed interest rate on a
portion of its debt, reducing its exposure to unfavorable variations in the
Prime or LIBOR rates charged on its debt.
At December 31, 1998, the Company was a party to one interest rate swap
agreement which it entered into in November 1998. Under the agreement, the
Company will pay a fixed rate of interest on the notional amount to the
counterparty and, in turn, the counterparty will pay the Company a rate of
interest on the notional amount based on a 3-month LIBOR rate. Net settlement
with the counterparty occurs quarterly and the swap arrangement expires in
November 2002. The fair value of this agreement at December 31, 1998 was
$22,000, as quoted by a major financial institution.
The following table presents, as of December 31, 1998, 1) the notional
amount of the agreement, 2) the fixed interest rate to be paid by the Company
and 3) the variable rate to be paid by the counterparty under the agreement (in
millions, except interest rate data):
<TABLE>
<CAPTION>
EFFECTIVE PERIOD OF INTEREST RATE SWAP
----------------------------------------------
ELEVEN MONTHS
YEAR ENDING DECEMBER 31, ENDING
------------------------------ NOVEMBER 30,
1999 2000 2001 2002
---- ---- ---- -------------
<S> <C> <C> <C> <C>
Notional amount............................ $75 $75 $75 $75
Rate to be paid by the Company............. 5.125% 5.125% 5.125% 5.125%
3-month 3-month 3-month 3-month
Rate to be received by the Company......... LIBOR LIBOR LIBOR LIBOR
</TABLE>
Forward Foreign Currency Exchange Agreements
The Company enters into transactions from time to time under which it
agrees to pay or receive amounts denominated in a currency other than the U.S.
Dollar. In order to mitigate the risk of unfavorable changes in the foreign
currency exchange rate, the Company may enter into forward foreign currency
exchange agreements.
At December 31, 1998, the Company was a party to one forward foreign
currency exchange agreement. Under the agreement, the Company received a
commitment from a U.S. financial institution under which the Company will
exchange Canadian dollars ("CAD") for U.S. Dollars ("USD") at a fixed exchange
rate. The fair value of the agreement at December 31, 1998, based on the
applicable closing exchange rate on that date, was $56,800. The following table
presents 1) the settlement date, 2) the amount the Company will pay in Canadian
dollars and 3) the contract exchange rate (in millions, except exchange rate
data):
FORWARD FOREIGN CURRENCY EXCHANGE AGREEMENT TO PAY CANADIAN DOLLARS
AND RECEIVE U.S. DOLLARS
<TABLE>
<S> <C>
Settlement date....................................... February 5, 1999
Amount the Company will pay in Canadian dollars....... $8.5
Exchange rate per agreement at date of maturity....... 1.52255 CAD per USD
</TABLE>
F-22
<PAGE> 60
NOTE 13--INCOME TAXES
The Company's provision for income taxes for the year ended December 31,
1998 consisted of the following (in thousands):
<TABLE>
<S> <C>
Current:
Federal................................................... $ 7,798
State..................................................... 2,086
-------
Total current.......................................... 9,884
-------
Deferred:
Federal................................................... 19,998
State..................................................... 2,125
-------
Total deferred......................................... 22,123
-------
Total provision for income taxes............................ $32,007
=======
</TABLE>
Due to operating losses, the Company did not record a provision for income
taxes for the period from inception (October 9, 1997) to December 31, 1997.
The effective tax rate for the year ended December 31, 1998 differed from
the federal statutory rate as follows (dollars in thousands):
<TABLE>
<S> <C> <C>
Tax provision computed at statutory rate.................... $19,880 35%
State taxes, net of federal benefit......................... 2,737 5
Compensation expenses related to equity issuances........... 6,060 11
Goodwill amortization....................................... 3,525 5
Other....................................................... (195) --
------- ---
Total tax expense...................................... $32,007 56%
======= ===
</TABLE>
The principal components of deferred taxes at December 31, 1998 were as
follows (in thousands):
<TABLE>
<S> <C>
Deferred tax assets:
Allowance for credit losses............................... $ 731
Alternative minimum tax credit carryforward............... 2,605
Loss carryforwards........................................ 3,494
Other..................................................... 439
--------
Total deferred tax assets.............................. 7,269
--------
Deferred tax liabilities:
Lease revenue and related depreciation.................... (60,130)
Transfers of certain financing lease receivables not
recognized for tax purposes............................ (7,394)
Other..................................................... (6,267)
--------
Total deferred tax liabilities......................... (73,791)
--------
Net deferred tax liability............................. $(66,522)
========
</TABLE>
The Company's ability to utilize net operating loss carryforwards and
alternative minimum tax credit carryforwards are subject to limitations under
Federal tax law. The Company's net operating loss carryforward of $9.2 million
at December 31, 1998 is due to expire at various dates through the year 2018.
Utilization of net operating loss carryforwards may be limited under certain
circumstances. The Company's alternative minimum tax credit carryforward of $2.6
million has no expiration date.
F-23
<PAGE> 61
NOTE 14--STOCKHOLDERS' EQUITY
Common Stock
In connection with the organization and initial capitalization of
UniCapital Corporation, on October 9, 1997, the Company issued 4,000,000 shares
of Common Stock at $.05 per share to certain individuals who assisted the
Company in their capacity as consultants for aggregate consideration of
$200,000. In addition, the Company sold 1,276,250 additional shares of Common
Stock for prices ranging from $.05 to $3 per share between October 9, 1997 and
December 31, 1997 to consultants and investors for aggregate consideration of
$208,750, of which $128,750 was in the form of stock subscription notes
receivable. In connection with the sale of these shares, the Company recorded a
non-cash compensation charge of $2.1 million during 1997, representing the
excess of the estimated fair value of the shares issued over the consideration
received.
During 1998, prior to the Offering, the Company issued an additional
1,522,500 shares of Common Stock at prices ranging from $3 to $10 per share to
individuals serving as consultants to the Company, each of whom became an
employee of the Company upon consummation of the Offering, and certain other
stockholders, for aggregate consideration of $5.1 million, of which $3.8 million
was in the form of stock subscription notes receivable, and recorded a non-cash
compensation charge of $15.2 million representing the excess of the estimated
fair value of the shares issued over the consideration received. In addition,
the Company issued an option to a consultant to the Company, who became an
employee of the Company upon consummation of the Offering, to purchase 200,000
shares of Common Stock at $3 per share, which expires on January 31, 2008. As a
result, the Company recorded a non-cash compensation charge in the amount of
$2.1 million reflecting the compensatory value of the option.
In May 1998, in connection with the Offering, the Company sold 28,000,000
shares of Common Stock to the public at $19 per share. The net proceeds to the
Company from the Offering, after deducting underwriting commissions and other
offering costs, were $488.6 million. The Company also issued 13,340,901 shares
of Common Stock, valued at $228.1 million, to the former stockholders of the
Founding Companies. Subsequent to the Offering, in connection with the
acquisition of five additional companies, the Company issued 3,293,888 shares of
Common Stock valued at $55.3 million.
Preferred Stock
The Company's Board of Directors is authorized to issue up to 20,000,000
shares of Preferred Stock without stockholder approval. At the time of issuance,
the Board of Directors would establish, subject to any limitations prescribed by
law, the rights, privileges and restrictions associated with the Preferred
Stock, including voting rights, dividend rights, conversion rights, redemption
privileges and liquidation preferences. At December 31, 1998, no shares of
Preferred Stock had been issued.
Stock Repurchase Program
During 1998, the Company's Board of Directors authorized a stock repurchase
program, under which the Company may purchase up to 5 million shares of its
outstanding Common Stock. Such purchases may be made at the Company's option
from time to time in open market transactions at prevailing prices or through
privately negotiated transactions. As of December 31, 1998, the Company had not
purchased any of its shares under the stock repurchase program.
F-24
<PAGE> 62
Dividend Restrictions
Under the Senior Credit Facilities agreements discussed in Note 10 and Note
11, the amount of dividends that the Company may declare must be approved by the
financial institution providing those credit facilities.
NOTE 15--STOCK OPTIONS AND INCENTIVE COMPENSATION
The Company may, from time to time, grant stock options under three stock
option plans. Vesting periods and exercise prices for stock option grants are
determined at the discretion of management. Generally, stock options vest
ratably over 4 years from the date of grant, expire 10 years from the date of
grant and carry an exercise price equal to the market value of the Company's
Common Stock at the date of grant. During 1998, management issued certain stock
options which were immediately exercisable and issued stock options with
exercise prices less than the market value of the Common Stock at the date of
grant.
1998 Long-Term Incentive Plan
Under the 1998 Long-Term Incentive Plan, options to acquire shares of
Common Stock may be granted to employees, directors (other than non-employee
directors), consultants and advisors of the Company. The maximum number of
shares of Common Stock which may be awarded under this plan is 15% of the total
number of shares of Common Stock outstanding from time to time.
1997 Executive Non-Qualified Stock Option Plan
Under the 1997 Executive Non-Qualified Stock Option Plan, options to
acquire shares of Common Stock may be granted to employees, directors,
consultants and advisors of the Company. The maximum number of shares of Common
Stock which may be awarded under the plan is 500,000.
1998 Non-Employee Directors' Stock Plan
Under the 1998 Non-Employee Directors' Stock Plan, the Company may grant
options to acquire shares of Common Stock to non-employee directors of the
Company. The maximum number of shares of Common Stock which may be awarded under
the plan is 500,000.
Stock Option Data
The table below presents the number of options and the weighted-average
exercise price of options outstanding at the beginning and end of the year and
options granted, exercised and forfeited during the year ended December 31,
1998.
<TABLE>
<CAPTION>
WEIGHTED-
AVERAGE
EXERCISE
SHARES PRICE
--------- ---------
<S> <C> <C>
Outstanding at the beginning of the period.............. -- $ --
Granted during the period with an exercise price equal
to market price at the date of grant.................. 5,037,396 15.54
Granted during the period with an exercise price less
than market price at the date of grant................ 200,000 3.00
Exercised during the period............................. -- --
Forfeited during the period............................. (6,250) 19.00
--------- ------
Outstanding at the end of the period.................... 5,231,146 $15.06
========= ======
</TABLE>
F-25
<PAGE> 63
During 1998, the Company granted 1,445,500 options that were immediately
exercisable. All remaining options vest ratably over 4 years from the date of
grant. All options expire 10 years from the date of grant.
The table below presents the weighted-average fair value at grant date of
options granted during the year ended December 31, 1998. Fair values are
presented separately for options with exercise prices equal to the stock's
market price at the date of grant and options with exercise prices less than the
stock's market price at the date of grant. The following weighted-average
assumptions were used in calculating fair values at grant date using the
Black-Scholes option pricing model: dividend yield of 0%, expected volatility of
40%, risk free interest rate of 5.70% and an expected life of 4 years.
<TABLE>
<CAPTION>
OPTIONS WITH OPTIONS WITH
EXERCISE PRICE EXERCISE PRICE
EQUAL TO LESS THAN
MARKET AT DATE MARKET AT DATE
OF GRANT OF GRANT
-------------- --------------
<S> <C> <C>
Weighted-average fair value at grant date of an
option granted during the year................. $6.04 $10.92
===== ======
</TABLE>
The following table presents the number of options, weighted-average
remaining contractual life and weighted-average exercise price of all options
outstanding at December 31, 1998. In addition, the table presents the number of
options and the weighted-average exercise price of options that were exercisable
at December 31, 1998. In order to facilitate an assessment of the number and
timing of additional shares of Common Stock that may be issued, options in the
table have been segregated based on ranges of exercise prices.
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------- -----------------------
WEIGHTED- WEIGHTED- WEIGHTED-
RANGE OF AVERAGE AVERAGE AVERAGE
EXERCISE NUMBER REMAINING EXERCISE NUMBER EXERCISE
PRICES OUTSTANDING CONTRACTUAL LIFE PRICE OUTSTANDING PRICE
-------- ----------- ----------------- --------- ----------- ---------
<C> <C> <S> <C> <C> <C>
$3.00 to $5.31 379,430 9.40 years $ 4.00 207,500 $ 3.08
$6.13 to $6.94 1,018,193 9.69 years 6.28 -- --
$7.31 to $10.38 47,500 9.90 years 8.26 -- --
$15.88 to $18.81 619,500 9.38 years 16.64 50,000 16.00
$19.00 3,166,523 9.30 years 19.00 1,188,000 19.00
--------- ---------
$3.00 to $19.00 5,231,146 9.40 years $15.06 1,445,500 $16.61
========= =========
</TABLE>
SFAS 123 Pro Forma Disclosure
The Company has elected the intrinsic value method under APB Opinion No. 25
to account for its employee stock options and similar equity instruments. Had
compensation expense for the Company's stock-based compensation plans been
determined based on the fair value at the grant dates for awards under those
plans consistent with the method
F-26
<PAGE> 64
prescribed in SFAS 123, the Company's net income and earnings per share for the
year ended December 31, 1998 would have been reduced to the pro forma amounts
indicated below:
<TABLE>
<S> <C>
Net income
As reported............................................... $24,793
Pro forma................................................. $17,186
Basic earnings per share
As reported............................................... $ 0.73
Pro forma................................................. $ 0.51
Diluted earnings per share
As reported............................................... $ 0.72
Pro forma................................................. $ 0.50
</TABLE>
For purposes of calculating compensation expense in accordance with SFAS
123 for option grants during the year ended December 31, 1998, the fair value of
each option grant was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions: dividend
yield of 0%, expected volatility of 40%, risk free interest rate of 5.70% and an
expected life of 4 years.
NOTE 16--EARNINGS PER SHARE
The following table presents a reconciliation of the numerators and the
denominators of the basic and diluted earnings (loss) per share computations for
the years ended December 31, 1998 and 1997 (in thousands, except share data):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
---------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
<S> <C> <C> <C>
Basic EPS:
Income available to common stockholders... $24,793 33,841,448 $ 0.73
======
Effect of dilutive securities:
Stock options............................. 175,767
Contingently issuable shares.............. 336,499
------- ----------
Diluted EPS:
Income available to common stockholders... $24,793 34,353,714 $ 0.72
======= ========== ======
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
---------------------------------------
LOSS SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
<S> <C> <C> <C>
Basic EPS:
Loss available to common stockholders..... $(2,137) 1,319,063 $(1.62)
======
Effect of dilutive securities:
Stock options............................. --
Contingently issuable shares.............. --
------- ----------
Diluted EPS:
Loss available to common stockholders..... $(2,137) 1,319,063 $(1.62)
======= ========== ======
</TABLE>
F-27
<PAGE> 65
The following table presents the number and the weighted average exercise
price of anti-dilutive options that were excluded from the calculation of
diluted earnings per share for the year ended December 31, 1998:
<TABLE>
<CAPTION>
1998
----
<S> <C>
Number of options........................................... 3,810,507
Weighted average exercise price............................. $18.57
</TABLE>
NOTE 17--SEGMENT INFORMATION
Operating Segments
In accordance with Statement of Financial Accounting Standards No. 131
("SFAS 131"), "Disclosures about Segments of an Enterprise and Related
Information", the Company has four reportable operating segments, which have
been defined by management based primarily on the nature of the products and
services of each segment. The first segment includes those operating companies
that provide leasing and structured financing for the acquisition of commercial
aircraft, or the "Air Group". The second segment includes the Company's
subsidiary that provides leasing and financing services for the acquisition of
commercial aircraft engines, or the "Aircraft Engine Group". The third segment
includes the operating companies that provide leasing and financing for
equipment generally with fair values over $250 thousand, or the "Technology and
Finance Group". The fourth segment includes the operating companies that provide
leasing and financing for equipment generally valued at $250 thousand or less,
or the "Business Credit Group". Equipment leased or financed by subsidiaries in
the Technology and Finance Group and the Business Credit Group includes computer
and telecommunications equipment, construction and manufacturing equipment,
office equipment, tractor trailers, printing equipment, car washes, petroleum
retail equipment and vending machines.
Corporate Division
The Company maintains a corporate headquarters and a lease servicing
subsidiary which are combined within the "Corporate Division". The Corporate
Division does not generate any significant revenues or maintain any significant
assets. Expenses recorded by the Corporate Division relate primarily to
administrative and management costs incurred in supporting and managing
subsidiary activities and costs incurred in providing lease servicing for leases
acquired, originated or sold by the Company's subsidiaries. Additional Corporate
Division expenses reflect the costs of public reporting and investor relations.
Certain expenses initially recorded by the Corporate Division, such as
interest expense, bank fees and payroll service fees, are allocated to its
operating segments based on management's estimates of certain utilization
factors such as credit facility utilization, compensation burdens, etc. The
revenue and expense balances for the Corporate Division in the tables presented
below reflect public company costs and revenue and expense items recorded by the
lease servicing subsidiary that relate to transactions with third parties. In
addition, selling, general and administrative expense presented in the table
below for the Corporate Division for the year ended December 31, 1998 includes
non-cash compensation charges recorded by the Company totaling $17.3 million as
discussed in Note 14.
Segment Financial Information
The accounting policies of the Air Group, Aircraft Engine Group, Technology
and Finance Group, Business Credit Group and the Corporate Division are the same
as those described in the summary of significant accounting policies in Note 2.
Additionally, the segment
F-28
<PAGE> 66
information below reflects the elimination of significant intercompany accounts
and transactions.
The following table presents selected financial information for the
Company's reporting segments for the year ended December 31, 1998 (in
thousands):
<TABLE>
<CAPTION>
TECHNOLOGY
AIRCRAFT AND BUSINESS
AIR ENGINE FINANCE CREDIT CORPORATE
GROUP GROUP GROUP GROUP DIVISION CONSOLIDATED
-------- -------- ---------- -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Finance income from
direct financing and
sales-type leases...... $ -- $ -- $ 23,312 $ 6,715 $ -- $ 30,027
Rental income from
operating leases....... 39,070 439 28,106 388 -- 68,003
Sales of equipment....... 267,120 36,320 59,261 2,605 -- 365,306
Gain on sale of leases... -- -- 10,032 13,830 -- 23,862
Fees, commissions and
remarketing income..... 1,285 -- 11,993 1,585 776 15,639
Interest and other
income................. 4,205 7 1,904 969 1,008 8,093
-------- -------- -------- -------- -------- ----------
Total revenues...... 311,680 36,766 134,608 26,092 1,784 510,930
Cost of operating
leases................. 11,773 112 15,818 138 -- 27,841
Cost of equipment sold... 250,526 19,441 46,221 2,195 -- 318,383
Interest expense......... 14,842 681 14,276 2,924 2,730 35,453
Selling, general and
administrative
expenses............... 5,704 1,326 26,483 8,626 21,208 63,347
Goodwill amortization.... 1,568 1,994 5,344 1,038 175 10,119
-------- -------- -------- -------- -------- ----------
Total expenses...... 284,413 23,554 108,142 14,921 24,113 455,143
Income (loss) from
operations............. 27,267 13,212 26,466 11,171 (22,329) 55,787
Equity in income from
minority-owned
affiliates............. 1,013 -- -- -- -- 1,013
-------- -------- -------- -------- -------- ----------
Income (loss) before
taxes.................. $ 28,280 $ 13,212 $ 26,466 $ 11,171 $(22,329) $ 56,800
======== ======== ======== ======== ======== ==========
Net investment in direct
financing and
sales-type leases...... $ -- $ -- $310,771 $ 60,148 $ 2,194 $ 373,113
======== ======== ======== ======== ======== ==========
Equipment under operating
leases, net............ $358,699 $ 6,401 $ 64,841 $ 288 $ -- $ 430,229
======== ======== ======== ======== ======== ==========
Investment in equity
method investees....... $ 6,886 $ -- $ 6,604 $ -- $ -- $ 13,490
======== ======== ======== ======== ======== ==========
Total assets............. $542,879 $141,796 $782,977 $150,699 $ 51,172 $1,669,523
======== ======== ======== ======== ======== ==========
Total debt............... $248,642 $ -- $201,828 $ 20,888 $195,964 $ 667,322
======== ======== ======== ======== ======== ==========
</TABLE>
Financial information for the period from inception (October 9, 1997) to
December 31, 1997 includes certain organizational costs incurred by the
Corporate Division. The net loss reported by the Company for the period from
inception to December 31, 1997 was $2.1 million, which was comprised of non-cash
compensation charges for certain equity issuances as discussed in Note 14.
Long-lived assets, other than investments, goodwill and deferred tax
assets, include equipment under operating leases, equipment held for sale or
lease and property and
F-29
<PAGE> 67
equipment. The following table presents a summary of expenditures for long-lived
assets by segment for the year ended December 31, 1998 (in thousands):
<TABLE>
<CAPTION>
TECHNOLOGY
AIRCRAFT AND BUSINESS
AIR ENGINE FINANCE CREDIT CORPORATE
GROUP GROUP GROUP GROUP DIVISION CONSOLIDATED
-------- -------- ---------- -------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Expenditures for long-lived
assets.................... $565,253 $38,167 $165,455 $10,545 $5,378 $784,798
======== ======= ======== ======= ====== ========
</TABLE>
Enterprise-Wide Disclosures
In addition to the segment information provided above, SFAS 131 requires
disclosure of the following: (a) revenues for each product and service or each
group of similar products and services, (b) revenues and long-lived assets
segregated by country of domicile and all foreign countries, and (c) certain
information regarding external customers which represent a source of 10% or more
of total revenues. With regard to item (a), the Company's management believes
that the operating segment information provided above reflects the presentation
of revenue for the Company's groups of similar products and services. With
regard to item (b), total long-lived assets, which includes equipment under
operating leases, utilized outside of the United States totaled $279.6 million
at December 31, 1998 and total revenue recorded during 1998 from sources outside
of the United States totaled $126.3 million. Equipment under operating leases
utilized, and revenue derived from sources, outside of the United States relate
primarily to leasing and sales of aircraft. No significant portion of these
assets or revenues are attributable to any individual foreign country. With
regard to item (c), the Air Group recorded revenues of approximately $137
million in connection with sales of equipment during 1998 to a single customer
domiciled in the United States.
NOTE 18--NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities", which is effective for fiscal years
beginning after June 15, 1999. The Company plans to adopt SFAS 133 beginning in
the year 2000. SFAS 133 establishes accounting and reporting standards for
derivative instruments and for hedging activities and it requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. The accounting
for changes in the fair value of such derivatives will vary based on the
intended use of the derivative. Adoption of SFAS 133 is not expected to have a
significant impact on the Company's results of operations, cash flows or
financial position.
NOTE 19--COMMITMENTS AND CONTINGENCIES
Recourse Provisions
The Company finances certain lease originations through limited recourse
and non-recourse debt. As part of the limited recourse arrangements, the Company
has provided limited guarantee provisions to certain lenders providing recourse
up to predetermined limits. The Company estimates that its maximum recourse
exposure to credit risk under these contracts was not significant at December
31, 1998.
The Company from time to time transfers financing lease receivables to
unrelated third parties in transactions accounted for as sales under SFAS 125.
In connection with certain transfers, the Company provides recourse to the
transferee for certain lessee defaults up to an amount not exceeding 10% of the
transfer price, which declines over the term of the leases
F-30
<PAGE> 68
transferred. Management considers this recourse exposure in the measurement of
the sale transaction and in the periodic determination of the adequacy of the
allowance for credit losses. At December 31, 1998, the Company estimates the
maximum aggregate recourse under these arrangements to be approximately $20.7
million.
Commitments to Extend Credit
The Company, from time to time, may commit to extend credit to its
customers in the normal course of business. Commitments to extend credit are
agreements to lend to a customer, as long as there is no violation of any
condition established in the contract or lease, and generally have fixed
expiration dates or other termination clauses. Such commitments may also provide
for the payment of a fee to the Company. The amount of collateral obtained by
the Company upon extension of credit is based on management's credit evaluations
of the counterparty. The Company evaluates each customer's creditworthiness on a
case by case basis. At such time as a commitment is made, the collateral value
supporting such commitment is generally at least equal to or greater than the
value of the commitment.
Commitments are generally expected to be drawn upon and, accordingly,
represent future cash requirements. The Company generally expects to fund any
such commitments from its unused credit lines, the sale of receivables or
working capital. Collateral obtained includes the equipment financed and may
include other property, plant and equipment, as well as personal guarantees.
Litigation
The Company is involved in various legal actions from time to time arising
out of activities conducted in the normal course of business. In the opinion of
the Company's management in consultation with legal counsel, the resolution of
these matters will not have a significant effect on the Company's financial
condition, results of operations or cash flows.
Operating Leases
The Company has entered into various operating lease agreements, primarily
for office space. Rent expense under all operating leases for the year ended
December 31, 1998 was $2.0 million. As of December 31, 1998, future minimum
annual lease payments under non-cancelable operating leases were as follows (in
thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- - -----------------------
<S> <C>
1999................................................ $ 3,595
2000................................................ 3,314
2001................................................ 3,154
2002................................................ 2,988
2003................................................ 2,693
Thereafter.......................................... 4,662
-------
Total.......................................... $20,406
=======
</TABLE>
NOTE 20--RELATED PARTY TRANSACTIONS
During 1998, in connection with certain acquisitions, the Company acquired
options to purchase additional entities owned by former stockholders of the
Company's subsidiaries. In June 1998, the Company acquired Jumbo Jet (and
related entities) (see Note 3) under such an option from a former stockholder of
one of the Founding Companies that became a member of the Company's executive
management prior to the acquisition. At December 31, 1998, the Company held
similar options to purchase other entities from former stockholders of its
subsidiaries.
F-31
<PAGE> 69
Two of the Company's subsidiaries rent office space from the former
stockholders of those subsidiaries. One of the former stockholders served as a
director of the Company during 1998 and both former stockholders currently hold
shares of the Company's Common Stock. Management believes that the terms of the
leases are no less favorable than those the Company could have obtained from an
unaffiliated third party. Rent expense recorded under these leases during the
year ended December 31, 1998 was not significant.
At December 31, 1998, certain former stockholders of the Company's
subsidiaries were under employment agreements with the Company. These employment
agreements ranged from 2 years to 3 years.
NOTE 21--CONCENTRATION OF CREDIT RISK
A substantial portion of the Company's leases are concentrated in certain
industries, including the commercial aircraft, data processing and
telecommunications industries. To the extent that the economic or regulatory
conditions prevalent in such industries change, the lessees' ability to honor
their lease obligations may be adversely impacted. Such risk is mitigated, in
part, through the Company's deposit and collateral requirements under lease
arrangements and its continuous monitoring of exposure to credit losses.
NOTE 22--SUBSEQUENT EVENTS (UNAUDITED)
On March 10, 1999, the Company entered into a letter of intent, which was
amended on March 25, 1999, to purchase a portfolio of nine commercial aircraft
subject to net operating leases for approximately $312 million. The Company
intends to purchase these aircraft with approximately $39 million in cash and
approximately $278 million in a combination of seller financing and third-party
financing for which the Company is currently negotiating. The letter of intent
is subject to satisfactory completion of due diligence procedures prior to April
9, 1999. This transaction is expected to close by June 30, 1999. Upon
consummation of this transaction, the seller is obligated to offer to sell an
additional $400 million in commercial aircraft to the Company prior to the end
of 1999.
On March 19, 1999, the Company entered into a binding letter of intent
whereby the Company would acquire the equity interest in a portfolio of 34
commercial aircraft subject to net operating leases for approximately $36
million in net cash investment, subject to the successful consummation of
securitization financing for the balance of the approximate $1.1 billion
purchase price. This transaction is expected to close by April 30, 1999.
F-32
<PAGE> 70
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
<C> <S>
2.01 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, ACR Acquisition Corp.,
American Capital Resources, Inc. and Michael B. Pandolfelli
and Gerald P. Ennella, dated as of February 14, 1998. (1)
2.02 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, BCG Acquisition Corp.,
Boulder Capital Group, Inc., Roy L. Burger and Carl M.
Williams, dated as of February 14, 1998. (1)
2.03 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, CLA Acquisition Corp.,
Stuart L. Cauff, The 1998 Cauff Family Trust, Wayne D.
Lippman and The 1998 Lippman Family Trust, dated as of
February 14, 1998. (1)
2.04 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, JCS Acquisition Corp.,
Jacom Computer Services, Inc. and John L. Alfano, dated as
of February 14, 1998. (1)
2.05 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, KSTN Acquisition Corp.,
K.L.C., Inc. and Alan H. Kaufman and Edgar W. Lee, dated as
of February 14, 1998. (1)
2.06 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, XFC Acquisition Corp.,
Matrix Funding Corporation, and Richard C. Emery, J. Robert
Bonnemort, David A. DiCesaris, Jack S. and Judith F. Emery,
Trustees for Jack S. Emery Trust, Alvin W. and Lila E.
Emery, Trustees for Alvin W. and Lila E. Emery Trust, JSE
Partners, Ltd., a Utah Limited Partnership, LBK Limited
Partnership, a Utah Limited Partnership, John I. Kasteler,
Jr., Craig C. Mortensen, Shanni Staker and Christian F.
Emery, dated as of February 14, 1998. (1)
2.07 Amended and Restated Purchase Agreement by and among
UniCapital Corporation, MFA Acquisition Corp., Merrimac
Financial Associates and Allan Z. Gilbert, Jordan L. Shatz
and Mark F. Cignoli, dated as of February 14, 1998. (1)
2.08 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, MCMG Acquisition Corp.,
Municipal Capital Markets Group, Inc., and the Stockholders
Named Therein, dated as of February 14, 1998. (1)
2.09 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, NSJ Acquisition Corp., W.
Jeptha Thornton, Richard C. Giles, Samuel J. Thornton, The
1998 Giles Family Trust and The 1998 Thornton Family Trust,
dated as of February 14, 1998. (1)
2.10 Amended and Restated Purchase Agreement by and among PFSC
Acquisition Corp., PFSC Limited Acquisition Corp., Portfolio
Financial Servicing Company, L.P. and The Partners Listed on
the Signature Page, dated as of February 14, 1998. (1)
</TABLE>
<PAGE> 71
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
<C> <S>
2.11 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, VC Acquisition Corp.,
Varilease Corporation, and the Stockholders of such company
listed on the Signature Page, dated as of February 14, 1998.
(1)
2.12 Amended and Restated Agreement and Plan of Contribution by
and among UniCapital Corporation, WAG Acquisition Corp., The
Walden Asset Group, Inc. and the Stockholders of such
company listed on the Signature Page, dated as of February
14, 1998. (1)
2.13 Agreement and Plan of Merger by and among UniCapital
Corporation, USTEC Acquisition Corp., United States Turbine
Engine Corp., James K. Neff, Carmit P. Neff and Randall P.
Fiorenza, dated as of July 27, 1998. (2)
2.14 Agreement and Plan of Reorganization by and among UniCapital
Corporation, SFC Acquisition Corp., Saddleback Financial
Corporation, Warren E. Emard and Stuart Kennedy, dated as of
July 28, 1998. (3)
2.15 Agreement and Plan of Reorganization by and among UniCapital
Corporation, JRI Acquisition Corp., HLC Financial, Inc.,
Lawrence P. Ciuffitelli and Soron Litman, dated as of July
28, 1998. (4)
2.16 Agreement and Plan of Reorganization by and among UniCapital
Corporation, MYC Acquisition Corp., The Myerson Companies,
Inc., Donald A. Myerson and Virginia Milke, dated as of
August 7, 1998. (5)
3.01 Certificate of Incorporation of UniCapital Corporation, as
amended. (1)
3.02 Bylaws of UniCapital Corporation. (1)
4.01 Credit Agreement by and among UniCapital Corporation,
NationsBank, National Association and the Lenders party
thereto, dated as of June 10, 1998. (6)
4.02 Transfer and Administration Agreement among Kitty Hawk
Funding Corporation, UCP Qualifying SPE 1998-1 Limited
Partnership, UCP Operating SPE 1998-1 Limited Partnership,
Portfolio Financial Servicing Company, L.P. and NationsBank,
N.A. dated as of July 20, 1998. (6)
4.03 Loan and Security Agreement among Kitty Hawk Funding
Corporation, UCP Borrowing SPE 1998-1 Limited Partnership,
Portfolio Financial Servicing Company, L.P. and Nations
Bank, N.A. dated as of July 10, 1998. (6)
4.04 Credit Agreement by and among UniCapital Corporation, First
Security Bank, National Association, as Trustee,
NationsBank, National Association, as Agent and as Lender,
and the Lenders party thereto, dated as of June 10, 1998. *
4.05 Credit Agreement by and among UniCapital Corporation, First
Security Bank, National Association, as Trustee, Lehman
Commercial Paper Inc., as Agent and as Lender, and the
Lenders party thereto, dated as of October 6, 1998. *
10.01 Employment Agreement between UniCapital Corporation and
Theodore J. Rogenski, effective as of May 20, 1998. (7)
10.02 Employment Agreement between UniCapital Corporation and
Bruce E. Kropschot, effective as of May 20, 1998. (7)
10.03 Employment Agreement between UniCapital Corporation and
Martin Kalb, effective as of May 20, 1998. (7)
10.04 Employment Agreement between UniCapital Corporation and
Steven E. Hirsch, effective as of May 20, 1998. (7)
</TABLE>
<PAGE> 72
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
<C> <S>
10.05 UniCapital Corporation 1997 Executive Non-Qualified Stock
Option Plan. (1)
10.06 Employment Agreement between UniCapital Corporation and
Edward A. Jaeckel, effective as of February 1, 1999. *
10.07 UniCapital Corporation 1998 Long-Term Incentive Plan. (1)
10.08 UniCapital Corporation 1998 Non-Employee Directors' Stock
Plan. (1)
10.09 UniCapital Corporation 1998 Employee Stock Purchase Plan.
(1)
10.10 Employment Agreement between UniCapital Corporation and
Robert J. New, effective as of May 20, 1998. (7)
10.11 Employment Agreement between UniCapital Corporation and
Jonathan New, effective as of May 20, 1998. (7)
10.11(a) First Amendment to Employment Agreement between UniCapital
Corporation and Jonathan New, dated September 16, 1998. *
10.12 Employment Agreement between UniCapital Corporation and
Stuart L. Cauff, effective as of May 20, 1998. (7)
21.01 Subsidiaries.*
23.01 Consent of PricewaterhouseCoopers LLP.*
</TABLE>
- - -------------------------
* Filed herewith.
(1) Incorporated by reference to exhibit with corresponding number filed with
Amendment No. 1 to the registrant's Registration Statement on Form S-1 (File
No. 333-46603), as filed with the Commission on April 3, 1998.
(2) Incorporated by reference to Exhibit 2.01 to the Company's Current Report on
Form 8-K dated July 27, 1998 (File No. 001-13973).
(3) Incorporated by reference to Exhibit 2.02 to the Company's Current Report on
Form 8-K dated July 27, 1998 (File No. 001-13973).
(4) Incorporated by reference to Exhibit 2.03 to the Company's Current Report on
Form 8-K dated July 27, 1998 (File No. 001-13973).
(5) Incorporated by reference to Exhibit 2.04 to the Company's Current Report on
Form 8-K dated July 27, 1998 (File No. 001-13973).
(6) Incorporated by reference to exhibit with corresponding number filed with
the Company's Form 10-Q as filed with the Commission on August 14, 1998.
(7) Incorporated by reference to the exhibit with corresponding number filed
with Amendment No. 1 to the Company's Registration Statement on Form S-1
(File. No. 333-53779), as filed with the Commission on June 9, 1998.
<PAGE> 1
Exhibit 4.04
================================================================================
CREDIT AGREEMENT
by and among
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity except as expressly stated herein,
but solely as Trustee,
and
THE BORROWING AFFILIATES FROM TIME TO TIME,
as Borrowers,
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent and as Lender
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
June 10, 1998
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Terms
<S> <C> <C>
1.1. Definitions..........................................................................................2
1.2. Rules of Interpretation.............................................................................35
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.....................................................................................37
2.2. Payment of Interest.................................................................................38
2.3. Payment of Principal................................................................................39
2.4. Manner of Payment...................................................................................40
2.5. Revolving Notes.....................................................................................41
2.6. Pro Rata Payments...................................................................................41
2.7. Reductions..........................................................................................41
2.8. Conversions and Elections of Subsequent Interest Periods............................................41
2.9. Increase and Decrease in Amounts....................................................................42
2.10. Unused Fee..........................................................................................42
2.11. Deficiency Advances.................................................................................42
2.12. Use of Proceeds.....................................................................................43
2.13. (a) Extension of Stated Termination Date...........................................................43
2.14. Designation of Borrowing Affiliate; Releases........................................................44
2.15. Joint and Several Liability.........................................................................45
2.16. Eligible Lease Involving Eligible Intermediary......................................................46
ARTICLE III
Security
3.1. Security............................................................................................48
3.2. Further Assurances..................................................................................48
3.3. Information Regarding Collateral....................................................................48
3.4. Quiet Enjoyment.....................................................................................49
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE IV
Change in Circumstances
<S> <C> <C>
4.1. Increased Cost and Reduced Return...................................................................50
4.2. Limitation on Types of Loans........................................................................51
4.3. Illegality..........................................................................................52
4.4. Treatment of Affected Loans.........................................................................52
4.5. Compensation........................................................................................52
4.6. Taxes..............................................................................................53
ARTICLE V
Conditions to Making Loans
5.1. Conditions of Closing...............................................................................55
5.2. Conditions of Initial Advance.......................................................................57
5.3. Conditions of Revolving Loans.......................................................................61
5.4. Appraisal Procedure.................................................................................62
ARTICLE VI
Representations and Warranties
6.1. Organization and Authority..........................................................................63
6.2. Loan Documents......................................................................................63
6.3. Solvency............................................................................................64
6.4. Subsidiaries and Stockholders.......................................................................64
6.5. Ownership Interests.................................................................................64
6.6. Financial Condition.................................................................................64
6.7. Title to Properties.................................................................................65
6.8. Taxes...............................................................................................66
6.9. Other Agreements....................................................................................66
6.10. Litigation..........................................................................................66
6.11. Margin Stock........................................................................................66
6.12. Investment Company..................................................................................66
6.13. Patents, Etc........................................................................................67
6.14. No Untrue Statement.................................................................................67
6.15. No Consents, Etc....................................................................................67
6.16. Employee Benefit Plans..............................................................................67
6.17. No Default..........................................................................................69
6.18. Environmental Laws..................................................................................69
6.19. Employment Matters..................................................................................69
6.20. RICO................................................................................................69
6.21. Liens...............................................................................................69
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
ARTICLE VII
Affirmative Covenants
<S> <C> <C>
7.1. Financial Reports, Etc..............................................................................70
7.2. Maintain Properties.................................................................................71
7.3. Existence, Qualification, Etc.......................................................................71
7.4. Regulations and Taxes...............................................................................72
7.5. Insurance...........................................................................................72
7.6. True Books..........................................................................................72
7.7. Right of Inspection.................................................................................72
7.8. Observe all Laws....................................................................................72
7.9. Governmental Licenses...............................................................................72
7.10. Covenants Extending to Other Persons................................................................72
7.11. Officer's Knowledge of Default......................................................................73
7.12. Suits or Other Proceedings..........................................................................73
7.13. Notice of Environmental Complaint or Condition......................................................73
7.14. Environmental Compliance............................................................................73
7.15. Indemnification.....................................................................................73
7.16. Further Assurances..................................................................................74
7.17. Swap Agreements.....................................................................................74
7.18. Continued Operations................................................................................74
7.19. Annual Appraisal of Aircraft and Leases.............................................................74
7.20. Annual Review of Eligible Carriers and Aircraft and Engine Models...................................74
7.21. Maintenance of Aircraft and Engines; Other Covenants and Restrictions;
Non-Discrimination..................................................................................75
7.22. Re-registration of Aircraft and Engines.............................................................76
7.23. Manager.............................................................................................76
7.24. Maintenance and Other Reserves......................................................................76
7.25. Employee Benefit Plans..............................................................................76
7.26. Collection Account..................................................................................77
ARTICLE VIII
Negative Covenants
8.1. EBITDA-to-Interest Ratio............................................................................78
8.2. Acquisitions........................................................................................78
8.3. Capital Expenditures................................................................................78
8.4. Liens...............................................................................................78
8.5. Indebtedness........................................................................................79
8.6. Transfer of Assets..................................................................................79
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
8.7. Subsidiaries; Investments...........................................................................80
8.8. Merger or Consolidation.............................................................................80
8.9. Transactions with Affiliates........................................................................80
8.10. Employee Benefit Plans; ERISA Affiliates; Employees.................................................80
8.11. Fiscal Year.........................................................................................81
8.12. Dissolution, etc....................................................................................81
8.13. Change in Control...................................................................................81
8.14. Negative Pledge Clauses.............................................................................81
8.15. Partnerships........................................................................................82
8.16. Business and Operations.............................................................................82
8.17. Ownership and Operation of Financed Aircraft and Engines............................................82
8.18. Concentration Restrictions..........................................................................83
8.19. Management Agreement and Fees.......................................................................83
8.20. Representations re Agent and Lenders...............................................................83
ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default...................................................................................84
9.2. Agent to Act........................................................................................87
9.3. Cumulative Rights...................................................................................87
9.4. No Waiver...........................................................................................87
9.5. Allocation of Proceeds..............................................................................87
9.6. Activities of Eligible Carriers.....................................................................88
ARTICLE X
The Agent
10.1. Appointment, Powers, and Immunities.................................................................89
10.2. Reliance by Agent...................................................................................89
10.3. Defaults............................................................................................90
10.4. Rights as Lender....................................................................................90
10.5. Indemnification.....................................................................................90
10.6. Non-Reliance on Agent and Other Lenders.............................................................91
10.7. Resignation of Agent................................................................................91
10.8. Fees................................................................................................91
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
ARTICLE XI
Miscellaneous
<S> <C> <C>
11.1. Assignments and Participations......................................................................92
11.2. Notices.............................................................................................93
11.3. Right of Set-off; Adjustments.......................................................................95
11.4. Survival............................................................................................96
11.5. Expenses............................................................................................96
11.6. Amendments and Waivers..............................................................................96
11.7. Counterparts........................................................................................97
11.8. Termination.........................................................................................97
11.9. Indemnification; Limitation of Liability............................................................97
11.10. Severability........................................................................................99
11.11. Entire Agreement....................................................................................99
11.12. Agreement Controls..................................................................................99
11.13. Usury Savings Clause................................................................................99
11.14. Payments...........................................................................................100
11.15. Confidentiality....................................................................................100
11.16. Governing Law; Waiver of Jury Trial................................................................100
EXHIBIT A Applicable Commitment Percentages....................................................A-1
EXHIBIT B Form of Assignment and Acceptance....................................................B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized
Representative.......................................................................C-1
EXHIBIT D Form of Borrowing Notice.............................................................D-1
EXHIBIT E Form of Interest Rate Selection Notice...............................................E-1
EXHIBIT F Form of Note.........................................................................F-1
EXHIBIT G-1 Form of Domestic Counsel Opinion...................................................G-1-1
EXHIBIT G-2 Form on FAA Counsel Opinion at Funding.............................................G-2-1
EXHIBIT G-3 Form of Foreign Counsel Opinion....................................................G-3-1
EXHIBIT G-4 Form of Post-Funding FAA Counsel Opinion...........................................G-4-1
EXHIBIT H Compliance Certificate...............................................................H-1
EXHIBIT I Form of Facility Guaranty............................................................I-1
EXHIBIT J Form of Security Agreement...........................................................J-1
EXHIBIT K List of Rated Carriers...............................................................K-1
EXHIBIT L List of Approved Aircraft Models and Approved Engine
Models...............................................................................L-1
EXHIBIT M Required Insurance on Each Aircraft and Engine.......................................M-1
EXHIBIT N Form of Lessee Estoppel Certificate..................................................N-1
EXHIBIT O Scheduled Qualified Countries........................................................O-1
EXHIBIT P List of Schedule A Carriers..........................................................P-1
EXHIBIT Q List of Schedule B Carriers..........................................................Q-1
EXHIBIT R Form of Assumption Letter............................................................R-1
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C> <C>
EXHIBIT S Borrowing Base Certificate...........................................................S-1
EXHIBIT T-1 Form of Pledge and Security Agreement
(for pledged beneficial interest in UniCapital Subsidiary Trust)...................T-1-1
EXHIBIT T-2 Form of Pledge and Security Agreement
(for pledged interest in UniCapital Special Purpose
Corporation, Beneficial Owner, Applicable Intermediary or
other Subsidiary)..................................................................T-2-1
Schedule 3.3 Information Regarding Collateral
Schedule 6.7 Transfer Restrictions to Sale or Assignment of Financed
Aircraft and Engines
Schedule 6.8 Tax Matters
Schedule 6.10 Litigation
Schedule 7.2 Maintenance
Schedule 7.21(a) Maintenance, Return, Alteration, Replacement, Pooling and
Lease
Schedule 7.22 Re-registration
</TABLE>
vi
<PAGE> 8
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 10, 1998 (the "Agreement"), is
made by and among FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity (except as expressly provided
herein) but solely as trustee on behalf of that certain trust created under the
Trust Agreement (11111) dated as of June 10, 1998 between First Security Bank,
National Association and Aircraft 11111, Inc. (together with any successor
Qualified Trustee, the "Initial Borrower"), certain UniCapital Subsidiary Trusts
and UniCapital Special Purpose Corporations (defined below) designated as
Borrowing Affiliates hereunder (the Initial Borrower and such UniCapital
Subsidiary Trusts and UniCapital Special Purpose Corporation being referred to
individually as a "Borrower" or collectively as the "Borrowers"), NATIONSBANK,
NATIONAL ASSOCIATION, a national banking association organized and existing
under the laws of the United States, in its capacity as a Lender
("NationsBank"), and each other financial institution executing and delivering a
signature page hereto and each other financial institution which may hereafter
execute and deliver an instrument of assignment with respect to this Agreement
pursuant to Section 11.1 (hereinafter such financial institutions may be
referred to individually as a "Lender" or collectively as the "Lenders"), and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States, in its capacity as agent for the
Lenders (in such capacity, and together with any successor agent appointed in
accordance with the terms of Section 10.7, the "Agent");
W I T N E S S E T H:
--------------------
WHEREAS, the Borrowers have requested that the Lenders make available
to the Borrowers a revolving credit facility of up to $300,000,000, the proceeds
of which are to be used solely to finance the purchase by the Borrowers or
Eligible Carriers (as defined below) of Eligible Aircraft and Eligible Engines
(defined below); and
WHEREAS, the Lenders are willing to make such revolving credit facility
available to the Borrowers upon the terms and conditions set forth herein;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby agree
as follows:
1
<PAGE> 9
ARTICLE I
Definitions and Terms
1.1. Definitions. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Acquisition" means the acquisition of any beneficial
interest, equity interest or other ownership interest in another Person
(including the purchase of an option, warrant or convertible or similar
type security to acquire such interest at the time it becomes
exercisable by the holder thereof), whether by purchase of such
interest or upon exercise of an option or warrant for, or conversion of
securities into, such interest.
"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with any Guarantor or any Borrower; or (ii) which
beneficially owns or holds 10% or more of any class of the outstanding
voting stock (or in the case of a Person which is not a corporation,
10% or more of the equity interest or beneficial interest) of any
Guarantor or any Borrower; or 10% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest or beneficial interest)
of which is beneficially owned or held by any Guarantor or any
Borrower; provided, however, at the time any Guarantor registers any
security issued by it pursuant to the Securities Act of 1933, as
amended, the figure "10%" used in this definition shall automatically
change to "5%" without further action. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
ownership of voting stock, by contract or otherwise.
"Aircraft" means any Stage III fixed wing airframe together
with any jet Engine affixed thereto;
"Applicable Aircraft Advance Rate" with respect to any
Eligible Aircraft means:
(a) if the age of such Aircraft is less than 15
years, 75% (or, if the related Loan is supported by Eligible
Credit Enhancement, 85%);
(b) if the age of such Aircraft is less than 20 years
and greater than or equal to 15 years, 65% (or, if the related
Loan is supported by Eligible Credit Enhancement, 75%); or
2
<PAGE> 10
(c) if the age of such Aircraft is greater than or
equal to 20 years, 50% (or, if the related Loan is supported
by Eligible Credit Enhancement, 60%).
"Applicable Aircraft Borrowing Base" with respect to any
Eligible Aircraft means the product of (a) the Applicable Aircraft
Advance Rate for such Eligible Aircraft, multiplied by (b) the Net
Aircraft Value of such Eligible Aircraft, as such amount may be reduced
pursuant to the provisos to the definition of "Concentration
Restriction."
"Applicable Borrower" means, with respect to any Financed
Aircraft or Engine, the Borrower that has requested or received a Loan
to enable such Borrower to purchase or refinance (or to use the
proceeds of such Loan to finance an Eligible Carrier's purchase or
refinancing of) such Financed Aircraft or Engine.
"Applicable Carrier" means, with respect to any Financed
Aircraft or Engine, the Eligible Carrier that (i) owns such Financed
Aircraft or Engine, or (ii) has leased such Financed Aircraft or Engine
from the Applicable Borrower, or from the Applicable Intermediary in
accordance with Section 2.16.
"Applicable Carrier Borrowing Base" with respect to any
Eligible Carrier means the aggregate of the Applicable Aircraft
Borrowing Bases and Applicable Engine Borrowing Bases for all Financed
Aircraft and Engines that are leased to, or owned by, such Eligible
Carrier.
"Applicable Commitment Percentage" means, with respect to each
Lender at any time, a fraction, the numerator of which shall be such
Lender's Revolving Credit Commitment and the denominator of which shall
be the Total Revolving Credit Commitment, which Applicable Commitment
Percentage for each Lender as of the Closing Date is as set forth in
Exhibit A; provided that the Applicable Commitment Percentage of each
Lender shall be increased or decreased to reflect any assignments to or
by such Lender effected in accordance with Section 11.1.
"Applicable Engine Advance Rate" with respect to any Eligible
Engine means 80%.
"Applicable Engine Borrowing Base" with respect to any
Eligible Engine means the product of (a) the Applicable Engine Advance
Rate for such Eligible Engine, multiplied by (b) the Net Engine Value
of such Eligible Engine, as such amount may be reduced pursuant to the
provisos to the definition of "Concentration Restriction."
"Applicable Foreign Aviation Law" means, with respect to any
Aircraft or Engine, any applicable law (other than the FAA Act) of any
country or subdivision thereof, governing the registration, ownership,
operation, or leasing of all or any part of such Aircraft or Engine, or
the creation, recordation, maintenance, perfection or priority or Liens
on all or any part of such Aircraft or Engine.
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<PAGE> 11
"Applicable Foreign Jurisdiction" means, with respect to any
Aircraft or Engine, any jurisdiction that administers an Applicable
Foreign Aviation Law.
"Applicable Intermediary" means, with respect to any Financed
Aircraft or Engine, the Eligible Intermediary that has leased such
Aircraft or Engine from the Applicable Borrower, and has leased such
Aircraft or Engine to the Applicable Carrier, in each case in
accordance with Section 2.16.
"Applicable Lease Cure Period" has the meaning assigned
thereto in Section 9.6.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrowers by written notice in accordance with the
terms hereof as the office by which its Loans of such Type are to be
made and maintained.
"Applicable Margin" means:
(a) with respect to the Eurodollar Rate, 1.75%,
provided that upon the consummation of a Permanent Capital
Markets Financing occurring after the Closing Date, the
Applicable Margin with respect to the Eurodollar Rate shall be
1.50%; and
(b) with respect to the Base Rate, three-fourths of
one percent (.75%), provided that upon the consummation of a
Permanent Capital Markets Financing occurring after the
Closing Date, the Applicable Margin with respect to the Base
Rate shall be one-half of one percent (.50%).
"Applicable Unused Fee" means 37.5 basis points (.375%) per
annum.
"Appraisal Procedure" has the meaning assigned thereto in
Section 5.4.
"Asia Pacific Carrier" means any Eligible Carrier listed under
the heading "Asia Pacific" in Exhibit P or Q.
"Assignment and Acceptance" means an Assignment and Acceptance
in the form of Exhibit B (with blanks appropriately filled in)
delivered to the Agent in connection with an assignment of a Lender's
interest under this Agreement pursuant to Section 11.1.
"Assumption Letter" means an Assumption Letter in
substantially the form of Exhibit R.
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<PAGE> 12
"Authorized Representative" means any of the President,
Executive Vice President, Senior Vice President or Vice President of
UniCapital, any Beneficial Owner or any UniCapital Special Purpose
Subsidiary, in each case as authorized representative for each of the
Borrowers, or any other Person expressly designated by the Board of
Directors of each of the Borrowers (or the appropriate committee
thereof) as an Authorized Representative of each of the Borrowers as
set forth from time to time in a certificate in the form of Exhibit C.
"Base Rate" means, for any day, the rate per annum equal to
the sum of (a) the higher of (i) the Federal Funds Rate for such day
plus one-half of one percent (0.5%) and (ii) the Prime Rate for such
day, plus (b) the Applicable 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 Loan" means a Loan or a Segment of the Term Loan
for which the rate of interest is determined by reference to the Base
Rate.
"Base Rate Segment" means a Segment bearing interest or to
bear interest at the Base Rate.
"Beneficial Owner" means, with respect to any UniCapital
Subsidiary Trust, any Person holding a beneficial interest in such
UniCapital Subsidiary Trust.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Boeing 737 Model" means a Boeing Aircraft that is any of the
following models: 737-300, 737-400, 737-600, 737-700, 737-800 or
737-900.
"Borrowers' Account" means a demand deposit account of the
Borrower with the Agent (to be identified by the Borrowers prior to the
initial Advance) or any successor account of the Borrowers with the
Agent, which may be maintained at one or more offices of the Agent or
an agent of the Agent.
"Borrowing Affiliate" means any UniCapital Subsidiary Trust or
UniCapital Special Purpose Corporation that is designated as a
Borrowing Affiliate hereunder pursuant to Section 2.14 hereof.
"Borrowing Base" means, as of any date of determination, the
sum of the following:
(a) the aggregate of the Applicable Aircraft
Borrowing Bases for all Eligible Aircraft; plus
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<PAGE> 13
(b) the aggregate of the Applicable Engine Borrowing
Bases for all Eligible Engines;
provided, that (except in the limited circumstances described in the
provisos to the definition of "Concentration Restriction") at no time
shall the Borrowing Base include any Applicable Aircraft Borrowing Base
or Applicable Engine Borrowing Base to the extent that any
Concentration Restriction would be exceeded or violated thereby.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility, in the form of Exhibit D.
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
States of New York and North Carolina are authorized or obligated by
law, executive order or governmental decree to be closed and, (ii) with
respect to any Eurodollar Rate Loan, any day which is a Business Day,
as described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, New York, New York and Charlotte, North
Carolina.
"Canadian Carrier" means any Eligible Carrier listed under the
heading "Canada" in Exhibit P or Q.
"Capital Expenditures" means, with respect to the Borrowers
and their respective Subsidiaries, for any period the sum of (without
duplication) (i) all expenditures (whether paid in cash or accrued as
liabilities) by any Borrower 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 any Borrowers and
its respective 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 7.1(a) or
(b), and (ii) with respect to any Capital Lease entered into by any
Borrower 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 7.1(a)), all the foregoing in accordance with GAAP applied
on a Consistent Basis.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
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<PAGE> 14
"Carrier Loan Documents" means loan agreement, note or
collateral documents evidencing one or more loans by a Borrower to an
Eligible Carrier to finance the purchase of an Eligible Aircraft or
Eligible Engine, and a Lien of such Borrower in such Aircraft or
Engine.
"Cauff Lippman" means Cauff, Lippman Aviation, Inc., a Florida
corporation that is a direct or indirect, wholly-owned subsidiary of
UniCapital.
"Change of Control" means, at any time, 100% of the beneficial
ownership of any Guarantor or any Borrower is not owned, directly or
indirectly, by UniCapital.
"CLA" means CLA Holdings, Inc., a Delaware corporation that is
a direct, wholly-owned subsidiary of UniCapital.
"Closing Date" means the date as of which this Agreement is
executed by the Borrowers, the Lenders and the Agent and on which the
conditions set forth in Section 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Collateral" means, collectively, all property of any
Borrower, any Subsidiary or any other Person in which the Agent or any
Lender is granted a Lien as security for all or any portion of the
Obligations under any Security Instrument.
"Collateral Assignment" means, collectively (or individually
as the context may indicate), any Assignment of Lease substantially in
the form of Exhibit C-1 or Exhibit C-3 (as applicable) to the Security
Agreement, or Assignment of Carrier Loan Documents substantially in the
form of Exhibit C-2 to the Security Agreement, delivered to the Agent
pursuant to Section 5.2 or 5.3 or the terms of the Security Agreement,
as any of the foregoing may be amended, revised, modified, supplemented
or amended and restated from time to time.
"Concentration Restriction" means any of the following
restrictions on the Eligible Aircraft or Eligible Engines included in
the Borrowing Base:
(a) the Applicable Carrier Borrowing Base for any
Eligible Carrier shall not at any time exceed the greater of
$50,000,000 or the Applicable Aircraft Borrowing Base for any
one Eligible Aircraft owned or leased by such Eligible
Carrier;
(b) the aggregate of the Applicable Carrier Borrowing
Bases for any four (4) Eligible Carriers shall not at any time
exceed $150,000,000;
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<PAGE> 15
(c) the aggregate of the Applicable Carrier Borrowing
Bases for all Asia Pacific Carriers shall not at any time
exceed $90,000,000;
(d) the aggregate of the Applicable Carrier Borrowing
Bases for all U.S. Carriers shall not at any time exceed
$225,000,000;
(e) the aggregate of the Applicable Carrier Borrowing
Bases for all European Carriers shall not at any time exceed
$150,000,000;
(f) the aggregate of the Applicable Carrier Borrowing
Bases for all Latin American Carriers shall not at any time
exceed $120,000,000;
(g) the aggregate of the Applicable Carrier Borrowing
Bases for all Canadian Carriers shall not at any time exceed
$75,000,000;
(h) the aggregate of the Applicable Carrier Borrowing
Bases for all Mideastern Carriers shall not at any time exceed
$60,000,000;
(i) the aggregate of the Applicable Aircraft
Borrowing Bases for all Aircraft falling within a single model
type (other than Boeing 737 Models) shall not at any time
exceed $120,000,000, provided that for the purposes of this
paragraph, Boeing 757-200 models and Boeing 757-200ER models
shall together be considered one model type;
(j) the aggregate of the Applicable Aircraft
Borrowing Bases for all Boeing 737 Models shall not at any
time exceed $225,000,000;
(k) the aggregate of the Applicable Engine Borrowing
Bases for all Engines shall not at any time exceed
$40,000,000;
(l) the aggregate of the Applicable Aircraft
Borrowing Bases for all Aircraft as to which any related
leases or Carrier Loan Documents expire within any specified
12-month period shall not at any time exceed $150,000,000; and
(m) the aggregate of the Applicable Aircraft
Borrowing Bases and Applicable Engine Borrowing Bases for all
Aircraft and Engines as to which a default has occurred and is
continuing under any related lease or Carrier Loan Document
shall not at any time exceed $30,000,000;
(n) the aggregate of the Applicable Aircraft
Borrowing Bases and Applicable Engine Borrowing Bases for all
Aircraft and Engines that are leased to, or owned, possessed
or operated by Schedule B Carriers shall not at any time
exceed $60,000,000; and
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<PAGE> 16
(o) the Borrowing Base shall not include any Aircraft
or Engine that is not, or has ceased to be, an Eligible
Aircraft or Eligible Engine (as the case may be) or that is
not subject to either an Eligible Lease or Eligible Carrier
Loan Documents;
provided that, with respect to any Eligible Aircraft or Eligible Engine
that a Borrower wishes to finance or refinance through the proceeds of
a Loan hereunder, if the inclusion of the Applicable Aircraft Borrowing
Base or Applicable Engine Borrowing Base (as the case may be) of such
Aircraft or Engine would cause one or more of the Concentration
Restrictions to be exceeded or violated, then such Borrower may deem
such Applicable Aircraft Borrowing Base or Applicable Engine Borrowing
Base to be reduced to the highest amount that would not exceed or
violate any Concentration Restriction, provided further that the
aggregate Advances hereunder with respect to such Aircraft or Engine
shall not exceed such reduced Applicable Aircraft Borrowing Base or
reduced Applicable Engine Borrowing Base and all other conditions to
such Advances are satisfied.
"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 pro forma combined financial statements of UniCapital, Cauff
Lippman and certain affiliates thereof, NSJ and the other Founding
Companies for the year ended December 31, 1997, which financial
statements are contained in the UniCapital Registration Statement.
"Consolidated EBITDA" means, with respect to the Borrowers and
their respective 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, and (v) depreciation, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated EBITDA-to-Interest Ratio" means, with respect to
the Borrowers and their respective Subsidiaries for any Four-Quarter
Period ending on the date of computation thereof, the ratio of (i)
Consolidated EBITDA for such Borrowers and their respective
Subsidiaries for such period, to (ii) Consolidated Interest Expense for
such Borrowers and their respective Subsidiaries for such period.
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrowers and their respective 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 Swap
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, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis.
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<PAGE> 17
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrowers and their
respective Subsidiaries (including payments received by the Borrowers
and their respective 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 this
Agreement and not related to an extraordinary event), less all
operating and non-operating expenses of the Borrowers and their
respective Subsidiaries including taxes on income, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis; but excluding 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 any Borrower 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.
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring thereof,
would be required) to be included in the financial statements
(including footnotes) of such Person in accordance with GAAP applied on
a Consistent Basis, including Statement No. 5 of the Financial
Accounting Standards Board, all Rate Hedging Obligations and any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including obligations of such Person however incurred:
(1) to purchase such Indebtedness or other obligation
or any property or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for
the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working capital, net
worth or other balance sheet condition or any income statement
condition of the primary obligor;
(3) to grant or convey any lien, security interest,
pledge, charge or other encumbrance on any property or assets
of such Person to secure payment of such Indebtedness or other
obligation;
(4) to lease property or to purchase securities or
other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(5) otherwise to assure the owner of the Indebtedness
or such obligation of the primary obligor against loss in
respect thereof.
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<PAGE> 18
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.8 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 2.8 or Article IV of one Type of Loan
into another Type of Loan.
"Credit Party" means, collectively, each Borrower, each
Eligible Intermediary, each Guarantor, and each other Person (if any)
providing Collateral pursuant to any Security Instrument. "Credit
Party" is not deemed to include UniCapital.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder, provided that if, pursuant to Section 9.6,
such event or condition is not deemed to be a breach of the Credit
Parties' obligations under this Agreement and the other Loan Documents
and each of the conditions set forth in Section 9.6 is satisfied, then
during the Applicable Lease Cure Period referred to in Section 9.6(d),
such event or condition shall not be deemed to be a "Default" except
for the purposes of Section 7.1(c), Section 7.11, the first two
sentences of Section 10.4, Section 2 of the Compliance Certificate in
the form of Exhibit H, and Section 4 of the Borrowing Base Certificate
in the form of Exhibit S; and provided further that if the requirements
of Section 9.6(d) are not satisfied within such Applicable Lease Cure
Period, then an "Event of Default" shall be deemed to have occurred on
the day after the last day of such period.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan and Eurodollar Rate Segment, until the end of the Interest Period
applicable thereto, a rate of two percent (2%) above the Eurodollar
Rate applicable to such Loan, and thereafter at a rate of interest per
annum which shall be two percent (2%) above the Base Rate, (ii) with
respect to Base Rate Loans and Base Rate Segments, at a rate of
interest per annum which shall be two percent (2%) above the Base Rate
and (iii) in any case, the maximum rate permitted by applicable law, if
lower.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Eligible Aircraft" means any Aircraft which satisfies each of
the following requirements:
(a) such Aircraft is a Stage III aircraft and is
one of the models listed on Exhibit L attached hereto;
(b) such Aircraft is or was manufactured in 1980 or
later, except that if such Aircraft is a McDonnell Douglas
DC10-30, it is or was manufactured in 1973 or later;
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<PAGE> 19
(c) such Aircraft is (i) owned by the Applicable
Borrower and is subject to an Eligible Lease between such
Applicable Borrower (as lessor) and an Eligible Carrier (as
lessee), or (ii) is owned by the Applicable Borrower, is
subject to an Eligible Lease between such Applicable Borrower
(as lessor) and the Applicable Intermediary (as lessee), and
is subject to an Eligible Lease between such Applicable
Intermediary (as lessor) and an Eligible Carrier as (lessee),
or (iii) is owned by an Eligible Carrier and is subject to
Eligible Carrier Loan Documents between such Eligible Carrier
(as debtor) and the Applicable Borrower (as lender and secured
party);
(d) such Aircraft is covered by all of the insurance
described on Exhibit M attached hereto, and the Agent (for
itself and on behalf of the Lenders) is named as loss payee
and additional insured on such insurance;
(e) neither the Applicable Carrier nor the Applicable
Intermediary (if any) is organized under the laws of, or
domiciled in, any Restricted Country; and such Aircraft is not
at any time flown into or located in any Restricted Country;
(f) such Aircraft is either registered in (i) the
United States, (ii) the country of organization of the
Applicable Carrier for such Aircraft, or (iii) the country of
organization of any other Eligible Carrier, provided that, at
any given time, no more than four (4) Aircraft may be
registered as described in this clause (iii) and the
Applicable Aircraft Borrowing Base of such Aircraft may not
exceed $100,000,000 in the aggregate;
(g) if such Aircraft is owned by the Applicable
Borrower, the Agent (for itself and on behalf of the Lenders)
has a duly perfected, first priority Lien and security
interest (subject only to Permitted Liens) on such Aircraft
under (i) the FAA Act (in the case of an Aircraft registered
in the United States) or (ii) all Applicable Foreign Aviation
Laws (in the case of an Aircraft registered outside the United
States);
(h) if such Aircraft is not owned by the Applicable
Borrower, then the Applicable Borrower has a duly perfected,
first priority Lien and security interest on such Aircraft
(subject only to Permitted Liens), which Lien has been
assigned to the Agent;
(i) the Agent has received opinions of FAA Counsel
(if such Aircraft is registered in the United States) or
counsel in the Applicable Foreign Jurisdiction (if such
Aircraft is registered outside the United States), which
counsel is reasonably acceptable to the Agent, and which
opinions are addressed to the Agent (on behalf of itself and
the Lenders) opining as to the creation, perfection and
priority of the Agent's Lien and security interest on such
Aircraft, substantially in the form of Exhibit G-2 or the
substance of Exhibit G-3 (as applicable) or
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<PAGE> 20
otherwise in form and substance reasonably acceptable to the
Agent; and (in the case of Aircraft registered in the United
States) within a reasonable period after the registration of
the Agent's Lien, the Agent has received an opinion of FAA
counsel substantially in the form of Exhibit G-4; and
(j) the Agent has received two (2) Qualified
Appraisals of the Fair Market Value of such Aircraft, each
such appraisal prepared by a separate Qualified Appraiser and
dated as of a date reasonably close to the date of the initial
Loan hereunder with respect to such Aircraft; and based on the
Appraisal Procedure, the Agent has determined the initial Fair
Market Value of such Aircraft.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
Lender, and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.1, an Authorized
Representative, such approval not to be unreasonably withheld or
delayed by any Authorized Representative and such approval to be deemed
given by an Authorized Representative within five Business Days after
notice of such proposed assignment has been provided by the assigning
Lender to such Authorized Representative; provided, however, that
neither any Borrower nor an affiliate of any Borrower shall qualify as
an Eligible Assignee.
"Eligible Carrier" means any Schedule A Carrier or Schedule B
Carrier.
"Eligible Carrier Loan Documents" means fully-executed Carrier
Loan Documents between a Borrower (as creditor and secured party) and
an Eligible Carrier (as debtor), which documents satisfy each of the
following requirements:
(a) such Carrier Loan Documents provide for principal
and interest payments to such Borrower in Dollars, and such
interest payments are in amounts and with scheduled payment
dates sufficient to provide such Borrower with funds adequate
to pay all interest on all Loans hereunder relating to the
respective Aircraft or Engine;
(b) the outstanding principal amount of the loan owed
to such Borrower under such Carrier Loan Documents is not less
than the aggregate outstanding principal amount of all Loans
hereunder relating to the respective Aircraft or Engine
(excluding the portion (not to exceed 1%) of such Loans used
solely to fund expenses incurred in connection with the
acquisition and financing of such Aircraft or Engine);
(c) such Carrier Loan Documents require such Eligible
Carrier to maintain the insurance described in Exhibit M
attached hereto with respect to such
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<PAGE> 21
Aircraft or Engine, and to bear all risk of loss, damage or
liability with respect to such Aircraft or Engine;
(d) at least two (2) years of the loan term is
remaining under such Carrier Loan Documents at the time of any
Loan hereunder relating to such Aircraft or Engine, and such
remaining term is not cancelable for any reason for at least
two (2) years after the date of any such Loan, other than
cancellation of such term (i) by such Borrower (as creditor
thereunder) for default by the Applicable Carrier or (ii) by
the Applicable Carrier if the Applicable Carrier is required
to pay (and does in fact simultaneously pay) to such Borrower,
and such Borrower simultaneously pays to the Agent (on behalf
of the Lenders), an amount at least equal to all outstanding
principal and accrued interest on all Loans hereunder relating
to such Aircraft or Engine;
(e) such Borrower (as creditor under the Carrier Loan
Documents) is protected under Section 1110 of the U.S.
Bankruptcy Code (or other applicable bankruptcy or insolvency
law reasonably acceptable to the Agent) with respect to the
creditor's rights against the debtor, including without
limitation its right to require repayment under the Carrier
Loan Documents and, upon the debtor's default, to foreclose on
and take possession of such Aircraft or Engine, during the
debtor's bankruptcy or insolvency;
(f) such Carrier Loan Documents require the debtor to
comply with covenants and restrictions regarding the
maintenance, alteration, replacement, pooling and lease of
such Aircraft or Engine, which covenants and restrictions
satisfy the requirements of Section 7.21(a) and Schedule
7.21(a) hereto;
(g) such Carrier Loan Documents prohibit the debtor
from flying or locating such Aircraft or Engine in any
Restricted Country, or allowing such Aircraft or Engine to be
flown or located in any Restricted Country;
(h) such Carrier Loan Documents contain customary
covenants and restrictions relating to re-registration of such
Aircraft or Engine, which covenants and restrictions satisfy
the requirements of Section 7.22 and Schedule 7.22 hereto;
(i) at the time of any Loan hereunder relating to
such Aircraft or Engine, no prepayment shall have been made
under such Carrier Loan Documents, and no loan payment
obligation shall have been accelerated (unless (i) such
acceleration or prepayment occurred prior to the date of any
Loan relating to such Aircraft or Engine and (ii) after giving
effect to such acceleration or repayment, the remaining
outstanding principal amount under such Carrier Loan Documents
is greater than or equal to the amount of the Loans hereunder
with respect to such Aircraft or Engine);
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<PAGE> 22
(j) at the time of any Loan hereunder relating to
such Aircraft or Engine, the Agent shall have received
evidence reasonably satisfactory to the Agent that such
Carrier Loan Documents are valid and binding; and
(k) such Carrier Loan Documents grant to such
Borrower, and such Borrower has at all times under the FAA Act
(in the case of Aircraft registered in the United States, or
in the case of any Engine the Lien on which is recorded under
United States law) or Applicable Foreign Aviation Laws (in the
case of all other Aircraft and Engines), a perfected first
priority Lien on such Aircraft or Engine (subject only to
Permitted Liens), which Lien has been assigned to the Agent.
"Eligible Credit Enhancement" with respect to any Eligible
Aircraft means credit enhancement in the form of a letter of credit or
surety bond which satisfies each of the following requirements:
(a) such letter of credit or surety bond is issued by
a Person other than a Borrower or Eligible Carrier, and such
Person is reasonably satisfactory to the Agent;
(b) such credit enhancement secures (on terms and
conditions reasonably satisfactory to the Agent) payment of
any Loan hereunder with respect to such Aircraft, such credit
enhancement is in an amount not less than ten percent (10%) of
the Net Aircraft Value of such Aircraft, and the Agent (in its
discretion) may obtain payment of principal and interest of
any such Loan through such credit enhancement without being
required first (or at any time) to foreclose on any other
Collateral or enforce any Guaranty; and
(c) such credit enhancement is unsecured, except that
if the "greenshoe" option under the UniCapital IPO is
exercised, proceeds from the greenshoe option may be used to
secure such credit enhancement.
"Eligible Engine" means an Engine which satisfies each of the
following requirements:
(a) such Engine is a Stage III Engine and is one of
the models listed on Exhibit L attached hereto;
(b) such Engine is (i) owned by the Applicable
Borrower and is subject to an Eligible Lease between such
Applicable Borrower (as lessor) and an Eligible Carrier (as
lessee), (ii) is owned by the Applicable Borrower, is subject
to an Eligible Lease between such Applicable Borrower (as
lessor) and the Applicable Intermediary (as lessee), and is
subject to an Eligible Lease between such Applicable
Intermediary (as lessor) and an Eligible Carrier as (lessee),
or (iii) is owned by an Eligible Carrier and is subject to
Eligible Carrier Loan Documents
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<PAGE> 23
between such Eligible Carrier (as debtor) and the Applicable
Borrower (as lender and secured party);
(c) such Engine is covered by all of the insurance
described on Exhibit M attached hereto, and the Agent (for
itself and on behalf of the Lenders) is named as loss payee
and additional insured on such insurance;
(d) neither the Applicable Carrier nor the Applicable
Intermediary (if any) is organized under the laws of, or
domiciled in, any Restricted Country; and such Engine is not
at any time flown into or located in any Restricted Country;
(e) if such Engine is owned by the Applicable
Borrower, the Agent (for itself and on behalf of the Lenders)
has a duly perfected, first priority Lien and security
interest (subject only to Permitted Liens) on such Engine
under (i) the FAA Act (in the case of an Engine the Lien on
which is recorded under United States law) or (ii) Applicable
Foreign Aviation Laws (in the case of any other Engine);
(f) if such Engine is not owned by the Applicable
Borrower, then the Applicable Borrower has a duly perfected,
first priority Lien and security interest on such Engine
(subject only to Permitted Liens), which Lien has been
assigned to the Agent;
(g) the Agent has received opinions of FAA Counsel
(if the Lien on such Engine is recorded under the United
States law) or counsel in the Applicable Foreign Jurisdiction
(for any other Engine), which counsel is reasonably acceptable
to the Agent, and which opinions are addressed to the Agent
(on behalf of itself and the Lenders), opining as to the
creation, perfection and priority of the Agent's Lien and
security interest on such Engine, substantially in the form of
Exhibit G-2 or G-3 (as applicable) or otherwise are in form
and substance reasonably acceptable to the Agent;
(h) the Agent has received two (2) Qualified
Appraisals of such Engine, each such appraisal prepared by a
separate Qualified Appraiser and dated as of a date reasonably
close to the date of the initial Loan hereunder with respect
to such Engine; and based on the Appraisal Procedure, the
Agent has determined the initial Fair Market Value of such
Engine;
(i) such Engine is or was manufactured in 1983 or
later.
"Eligible Intermediary" means, with respect to any Financed
Aircraft or Engine, a corporation that is a direct, wholly-owned
subsidiary of the Applicable Borrower.
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<PAGE> 24
"Eligible Lease" means a fully-executed lease by a Borrower
(as lessor) to an Eligible Carrier (as lessee) of an Eligible Aircraft
or Eligible Engine, which lease satisfies each of the following
requirements:
(a) such lease provides for rent payments to such
Borrower in Dollars in amounts and with scheduled payment
dates sufficient to provide such Borrower with funds adequate
to pay all interest on all Loans hereunder relating to the
respective Aircraft or Engine;
(b) such lease is a "triple net lease" (subject to
any arrangement whereby the Borrower and the Eligible Carrier
agree to share certain expenses relating to aircraft or engine
directives, service bulletins or similar items) and requires
the lessee to maintain the insurance described in Exhibit M
attached hereto with respect to such Aircraft or Engine, and
to bear all risk of loss, damage or liability with respect to
such Aircraft or Engine;
(c) at least two (2) years (and not more than twelve
(12) years) of the lease term is remaining under such lease at
the time of any Loan hereunder relating to such Aircraft or
Engine, and such remaining term is not cancelable for any
reason for two (2) years after the date of any such Loan,
other than cancellation of such term (i) by the lessor for
default by the Applicable Carrier, or (ii) by the Applicable
Carrier if the Applicable Carrier is required to pay (and does
in fact simultaneously pay) to such Borrower, and such
Borrower simultaneously pays to the Agent (on behalf of the
Lenders), an amount at least equal to all outstanding
principal and accrued interest on all Loans hereunder relating
to such Aircraft or Engine or (iii) by the Applicable Carrier
if such Borrower continues to own such Aircraft or Engine and
(simultaneously with the cancellation of such existing
Eligible Lease) the Borrower leases such Aircraft or Engine to
an Eligible Carrier pursuant to a new Eligible Lease (or to an
Eligible Intermediary that simultaneously leases such Aircraft
or Engine to an Eligible Carrier, in each case pursuant to new
Eligible Leases) (it being understood that compliance with
this clause (iii) shall be determined at the time of such
termination);
(d) the lessor is protected under Section 1110 of the
U.S. Bankruptcy Code (or other applicable bankruptcy or
insolvency law reasonably acceptable to the Agent) with
respect to the lessor's rights against the lessee, including
without limitation the rights to require performance of the
lessee's obligations under the lease or return of such
Aircraft or Engine during the lessee's bankruptcy or
insolvency;
(e) such lease requires the lessee to comply with
covenants and restrictions regarding the maintenance, return,
alteration, replacement, pooling and sublease of such Aircraft
or Engine, which covenants and restrictions satisfy the
requirements of Section 7.21(a) and Schedule 7.21(a) hereto;
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<PAGE> 25
(f) if such lease contains a purchase option, the
expected exercise price is equal to or greater than the
expected principal and accrued interest on all Loans relating
to such Aircraft or Engine as of the date of exercise of such
option;
(g) such lease prohibits the lessee from flying or
locating such Aircraft or Engine in any Restricted Country,
and from allowing such Aircraft or Engine to be flown or
located in any Restricted Country;
(h) such lease contains customary covenants and
restrictions relating to re-registration of such Aircraft or
Engine; which covenants and restrictions satisfy the
requirements of Section 7.22 and Schedule 7.22 hereto;
(i) at the time of any Loan hereunder relating to
such Aircraft or Engine, no prepayment shall have been made
under such lease, and no lease payment obligation shall have
been accelerated, provided that it is understood that a
scheduled rental payment to be paid in advance for a rental
period in accordance with the lease terms is not deemed to be
a prepayment;
(j) at the time of any Loan relating to such Aircraft
or Engine, the Agent shall have received a Lessee Estoppel
Certificate executed by such lessee with respect to such
lease, or other evidence reasonably satisfactory to the Agent
that such lease is valid and binding; and
(k) either (i) such lease is a "true lease" lease
(and not a lease intended as security) under applicable
commercial law and other applicable law relating to creditors'
rights and bankruptcy; or (ii) such lease grants to such
Borrower, and such Borrower has at all times under the FAA Act
(in the case of Aircraft registered in the United States, or
in the case of any Engine the Lien on which is recorded under
United States law) or Applicable Foreign Aviation Laws (in the
case of all other Aircraft and Engines), a perfected first
priority Lien on such Aircraft or Engine (subject only to
Permitted Liens), which Lien has been assigned to the Agent;
provided, however, that in the circumstances described in Section 2.16,
"Eligible Lease" means, individually and collectively, (X) a
fully-executed lease by a Borrower (as lessor) to the Applicable
Intermediary (as lessee) of an Eligible Aircraft or Eligible Engine,
which lease satisfies each of the requirements for an "Eligible Lease"
set forth in clauses (a) through (k) above except that the lessee is
not an Eligible Carrier, and (Y) a fully-executed lease by such
Applicable Intermediary (as lessor) to an Eligible Carrier (as lessee)
of such Financed Aircraft or Engine, which Eligible Carrier is not a
U.S. Carrier, and which lease is identical in all respects (other than
the Persons that are lessor and lessee) to the lease described in
clause (X) above, and which lease satisfies all the requirements for an
"Eligible Lease" set forth in clauses (a) through (k) above, except
that the lessor is not a Borrower.
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<PAGE> 26
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of any Guarantor or any Borrower or any of their respective
ERISA Affiliates or is assumed by any Guarantor or any Borrower or any
of their respective ERISA Affiliates in connection with any Acquisition
or (ii) has at any time been maintained for the employees of any
Guarantor or any Borrower or any current or former ERISA Affiliate.
"Engine" means any aircraft jet engine.
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree, permit
or license regulating, relating to, or imposing liability or standards
of conduct concerning, any environmental matters or conditions,
environmental protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization
Act of 1986, as amended; the Resource Conservation and Recovery Act, as
amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all
regulations promulgated thereunder, and any other "Superfund" or
"Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Guarantor or any
Borrower, means any Person or trade or business which is a member of a
group which is under common control with such Guarantor or Borrower,
who together with such Guarantor or Borrower, is treated as a single
employer within the meaning of Section 414(b) and (c) of the Code.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
--------------------------
Rate 1- Reserve Requirement Margin
"Eurodollar Rate Loan" means a Loan or Segment of the Term
Loan for which the rate of interest is determined by reference to the
Eurodollar Rate.
"Eurodollar Rate Segment" means a Segment bearing interest or
to bear interest at the Eurodollar Rate.
"European Carrier" means any Eligible Carrier listed under the
heading "Europe" in Exhibit P or Q.
"Event of Default" means any of the occurrences set forth as
such in Section 9.1.
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<PAGE> 27
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"FAA" means the United States Federal Aviation Administration.
"FAA Act" means 49 U.S.C. Subtitle VII, Section 40101 et seq.,
as amended from time to time, any regulations promulgated thereunder
and any successor provision.
"FAA Counsel" means DeBee & Gilchrist, special counsel with
respect to FAA matters, or any other law firm having nationally
recognized expertise in FAA matters acceptable to the Agent.
"FAA Recording Office" means the office of the FAA in Oklahoma
City, Oklahoma, maintained as the office for the recordation of Liens
on Aircraft and Engines pursuant to the FAA Act, and any successor or
additional office performing the same or a comparable function.
"Facility Guaranty" means each Guaranty Agreement between one
or more Guarantors and the Agent for the benefit of the Lenders
(substantially in the form of Exhibit I attached hereto), delivered as
of the Closing Date and otherwise pursuant to Section 2.14, 5.2 or 5.3,
as the same may be amended, modified or supplemented from time to time.
"Facility Termination Date" means such date as all of the
following shall have occurred: (a) the Borrowers shall have permanently
terminated the Revolving Credit Facility by payment in full of all
Revolving Credit Outstandings, together with all accrued and unpaid
interest thereon, (b) all Revolving Credit Commitments shall have
terminated or expired, (c) the Borrowers shall have permanently
terminated the Term Loan by payment in full of all Term Loan
Outstandings, and (d) the Borrowers shall have fully, finally and
irrevocably paid and satisfied in full all Obligations (other than
Obligations consisting of continuing indemnities and other contingent
Obligations of any Borrower or any Guarantor that may be owing to the
Lenders pursuant to the Loan Documents and expressly survive
termination of this Agreement).
"Fair Market Value" with respect to any Aircraft or Engine
means the fair market value ascribed thereto by the respective
Qualified Appraiser in a Qualified Appraisal; provided that for the
purpose of determining the Fair Market Value of such Aircraft or Engine
at the time of any Loan with respect thereto, such Fair Market Value
shall be determined using an Appraisal Procedure.
"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
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<PAGE> 28
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.
"Fee Letter" means the Fee Letter dated April 3, 1998 by
NationsBank, individually and as agent, NMS, NationsBank as referral
agent for Kitty Hawk Funding Corporation, and accepted and agreed to by
UniCapital.
"Financed Aircraft and Engines" with respect to any Loan or
Advance means, collectively, each Aircraft and Engine, or part thereof,
the acquisition or alteration of all or part of which was or is to be
financed (directly or indirectly) in whole or in part by such Loan or
Advance.
"Financed Aircraft or Engine" with respect to any Loan or
Advance means, any Aircraft or Engine, or part thereof, included within
the definition of Financed Aircraft and Engines.
"Fiscal Year" means the twelve month fiscal period of the
Borrowers and their Subsidiaries commencing on January 1 of each
calendar year and ending on December 31 of each calendar year.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Founding Companies" has the meaning assigned thereto in the
UniCapital Revolving Credit Agreement.
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrowers and their Subsidiaries, taken together
as one accounting period.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the American Institute of Certified Public Accountants
or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
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<PAGE> 29
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guaranties" means all obligations of any Borrower or any
other Person directly or indirectly guaranteeing, or in effect
guaranteeing, any Indebtedness or other obligation of any other Person.
"Guarantors" means, at any date, the Beneficial Owners,
Eligible Intermediaries and Subsidiaries who are required to be parties
to a Facility Guaranty at such date.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law.
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property or arising under Rate
Hedging Obligations, all indebtedness secured by any Lien on the
property of such Person whether or not such indebtedness is assumed,
all liability of such Person by way of endorsements (other than for
collection or deposit in the ordinary course of business), all
Contingent Obligations, and other items which in accordance with GAAP
is required to be classified as a liability on a balance sheet; but
excluding all accounts payable in the ordinary course of business so
long as payment therefor is due within one year; provided that in no
event shall the term Indebtedness include surplus and retained
earnings, lease obligations (other than pursuant to Capital Leases),
reserves for deferred income taxes and investment credits, other
deferred credits or reserves or deferred compensation obligations.
"Indebtedness for Money Borrowed" means with respect to any
Person, without duplication, all indebtedness in respect of money
borrowed, as reflected on the balance sheet of such Person in
accordance with GAAP, including without limitation all Capital Leases
and the deferred purchase price of any property or asset, evidenced by
a promissory note, bond, debenture or similar written obligation for
the payment of money (including conditional sales or similar title
retention agreements), other than trade payables incurred in the
ordinary course of business.
"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan 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
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<PAGE> 30
"Interbank Offered Rate" shall mean, with respect to any Eurodollar
Rate Loan 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 (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of June 10, 1998, among the Agent, for itself and on
behalf of the Lenders, and NationsBank, as agent for itself and on
behalf of the "Lenders" (as defined in the UniCapital Revolving Credit
Agreement).
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
Converted and ending, at the Borrowers' option, on the date one week
(to the extent reasonably available to each of the Lenders) or one,
two, three or six months thereafter as notified to the Agent by an
Authorized Representative three (3) Business Days prior to the
beginning of such Interest Period; provided, that,
(i) if an Authorized Representative fails to notify
the Agent of the length of an Interest Period three (3)
Business Days prior to the first day of such Interest Period,
the Eurodollar Rate Loan for which such Interest Period was to
be determined shall be deemed to be a Base Rate Loan as of the
first day thereof;
(ii) if an Interest Period for a Eurodollar Rate Loan
would end on a day which is not a Business Day, such Interest
Period shall be extended to the next Business Day (unless such
extension would cause the applicable Interest Period to end in
the succeeding calendar month, in which case such Interest
Period shall end on the next preceding Business Day);
(iii) any Interest Period (other than a one-week
Interest Period) which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a
calendar month;
(iv) no Interest Period shall extend past the Stated
Termination Date for Revolving Loans or past the Term Loan
Termination Date for any Segment; and
(v) there shall not be more than six (6) Interest
Periods in effect on any day.
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<PAGE> 31
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
the Conversion of any Base Rate Loan into a Eurodollar Rate Loan, in
the form of Exhibit E.
"Latin American Carrier" means any Eligible Carrier listed
under the hearing "Latin America" in Exhibit P or Q.
"Lessee Estoppel Certificate" means a certificate in form and
substance reasonably acceptable to the Agent, duly completed and
executed by an Applicable Carrier with respect to an Aircraft or
Engine; and the Agent agrees that the form of Lessee Estoppel
Certificate attached hereto as Exhibit N is acceptable.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, any Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
"Loan" or "Loans" means any of the Revolving Loans or the
Term Loan.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Facility Guaranties, the Assumption Letters, and all
other instruments and documents heretofore or hereafter executed or
delivered to or in favor of any Lender or the Agent in connection with
the Loans made and transactions contemplated under this Agreement, as
the same may be amended, supplemented or replaced from the time to
time.
"Management Agreement" means that certain Management Agreement
dated as of the date hereof among the Initial Borrower, each Borrowing
Affiliate and Cauff Lippman, pursuant to which the Manager provides
management services with respect to Financed Aircraft and Engines, and
any leases or Carrier Loan Documents with respect thereto.
"Manager" means Cauff Lippman.
"Manufacturer" means any manufacturer of any Financed
Aircraft or Engine.
"Manufacturer's Warranty" means any warranty made or offered
by any Manufacturer with respect to any Financed Aircraft or Engine.
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<PAGE> 32
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, prospects, operations or condition,
financial or otherwise, of the Borrowers and their respective
Subsidiaries (if any), taken as a whole, (ii) the ability of any Credit
Party to pay or perform its respective obligations, liabilities and
indebtedness under the Loan Documents as such payment or performance
becomes due in accordance with the terms thereof, or (iii) the rights,
powers and remedies of the Agent or any Lender under any Loan Document
or the validity, legality or enforceability thereof.
"Mideastern Carrier" means any Eligible Carrier listed under
the heading "Middle East" in Exhibit P or Q.
"Mortgage Convention" means the Convention on the
International Recognition of Rights in Aircraft signed initially at
Geneva in 1948, as the same may be amended, modified or supplemented
from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which any Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"NationsBank" means NationsBank, National Association.
"Net Aircraft Value" with respect to any Eligible Aircraft, as
of any date of determination, means the lesser of (a) the Purchase
Price of such Aircraft and (b) the Fair Market Value of such Aircraft
as stated in the most recent Original Qualified Appraisal or subsequent
Qualified Appraisal pursuant to Section 7.19 with respect to such
Aircraft; provided in either case that if such appraisal is dated more
than 18 months prior to such date of determination of Net Aircraft
Value, then the Net Aircraft Value of such Aircraft is deemed to be $0.
"Net Engine Value" with respect to any Eligible Engine, as of
any date of determination, means the lesser of (a) the Purchase Price
of such Engine and (b) the Fair Market Value of such Engine as stated
in the most recent Original Qualified Appraisal or subsequent Qualified
Appraisal pursuant to Section 7.19 with respect to such Engine;
provided in either case that if such appraisal is dated more than 18
months prior to such date of determination of Net Engine Value, then
the Net Engine Value of such Engine is deemed to be $0.
"NMS" means NationsBanc Montgomery Securities LLC and its
successors.
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<PAGE> 33
"Non-SPE Credit Party" means any owner (other than a
Beneficial Owner) of a Borrower or of a Beneficial Owner, if such owner
in either case is not required to be a Guarantor hereunder.
"Notes" means the Revolving Notes and the Term Notes.
"NSJ" means The NSJ Group, Inc., a Delaware corporation that
is the direct or indirect, wholly-owned subsidiary of UniCapital.
"Obligations" means the obligations, liabilities and
Indebtedness of any Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) all liabilities
of any Borrower to any Lender which arise under a Swap Agreement
(unless otherwise agreed in writing by such Lender), and (iii) the
payment and performance of all other obligations, liabilities and
Indebtedness of any Borrower to the Lenders, the Agent or NMS
hereunder, under any one or more of the other Loan Documents or with
respect to the Loans.
"Operating Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership, trust or other legally authorized incorporated
or unincorporated entity, the bylaws, operating agreement, partnership
agreement, limited partnership agreement or other applicable documents
relating to the operation, governance or management of such entity.
"Organizational Action" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership, trust or other legally authorized incorporated
or unincorporated entity, any corporate, organizational or partnership
action (including any required shareholder, trustee, member or partner
action), or other similar official action, as applicable, taken by such
entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership, trust or other legally
authorized incorporated or unincorporated entity, the articles of
incorporation, certificate of incorporation, articles of organization,
certificate of limited partnership, trust agreement or other applicable
organizational or charter documents relating to the creation of such
entity.
"Original Qualified Appraisal" has the meaning assigned
thereto in Section 5.4.
"Outstandings" means, collectively, at any date, the Revolving
Credit Outstandings and (without duplication) the Term Loan
Outstandings on such date.
"Partnership Interests" shall have the meaning therefor
provided in the Pledge Agreement.
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<PAGE> 34
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of any Borrower,
any Guarantor or any of their respective ERISA Affiliates or is assumed
by any Borrower, any Guarantor or any of their respective ERISA
Affiliates in connection with any Acquisition or (ii) has at any time
been maintained for the employees of any Borrower, any Guarantor or any
current or former ERISA Affiliate.
"Permanent Capital Markets Financing" shall mean an aircraft
lease securitization, enhanced equipment trust certificate or other
permanent aircraft-secured public or private capital markets
transaction (which, in each case, does not constitute bridge or interim
financing) for the benefit of UniCapital or a subsidiary of UniCapital,
producing net proceeds of at least $200,000,000, excluding the
UniCapital IPO, any secondary offering of UniCapital stock and the
UniCapital Facilities.
"Permitted Lien" means any Lien permitted by Section 8.4.
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Pledge Agreement" means, collectively (or individually as the
context may indicate), (i) that certain Pledge and Security Agreement
dated as of the date hereof between Cauff Lippman and the Agent (for
the benefit of the Agent and the Lenders), (ii) that certain Pledge and
Security Agreement dated as of the date hereof among the initial
Beneficial Owner and the Agent (for the benefit of the Agent and the
Lenders), and (iii) any additional Pledge and Security Agreement
(substantially in the form of Exhibit T-1 or T-2 attached hereto, as
applicable), delivered to the Agent pursuant to Section 5.2, 5.3 or
2.14, as hereafter amended, supplemented or replaced from time to time.
"Pledged Interests" has the meaning given to such term in the
Pledge Agreement.
"Prime Rate" means 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.
"Principal Office" means the principal office of NationsBank,
presently located at Independence Center, 15th Floor, NC1 001-15-04,
Charlotte, North Carolina 28255, Attention: Agency Services, or such
other office and address as the Agent may from time to time designate.
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"Purchase Price" with respect to any Aircraft or Engine means
the actual purchase price paid for such Aircraft or Engine by the
Applicable Borrower or (in the case of an Aircraft or Engine financed
by loans from a Borrower) an Eligible Carrier , together with
out-of-pocket costs incurred by such Applicable Borrower or Eligible
Carrier in such purchase (provided that such out-of-pocket costs shall
not exceed 1% of such Purchase Price).
"Qualified Appraisal" means, with respect to any Financed
Aircraft or Engine, an appraisal of such Aircraft or Engine by a
Qualified Appraiser, which appraisal is prepared in accordance with
ISTAT standards and opines as to the Fair Market Value of such Aircraft
or Engine, taking into account the actual maintenance status of such
Aircraft or Engine.
"Qualified Appraiser" means any of the following appraisal
firms: Aircraft Information Services, Inc., BK Associates, Inc. Simat,
Helliesen & Eichner, Inc., Airclaims Limited, Avitas, Inc., AvSolutions
Inc., or Flight Plan International.
"Qualified Country" means (a) any Restricted Country, (b) any
country listed on Exhibit O attached hereto, or (c) any other country
to the extent United States or United Nations sanctions or laws
prohibit the use or location of any Aircraft or Engine in such country.
"Qualified Trustee" means (i) Wilmington Trust Company, First
Security Bank, National Association, or another bank or trust company
having a combined capital and surplus of at least One Hundred Million
Dollars ($100,000,000) or (ii) any other Person acceptable to the
Agent.
"Rated Carrier" means any Eligible Carrier identified on
Exhibit K attached hereto, as such Exhibit may be amended from time to
time pursuant to Section 7.20.
"Rate Hedging Obligations" means any and all obligations of
any Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
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"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Regulatory Change" means any change effective after the
Closing Date in United States federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes any of the Lenders, under any United States federal or
state or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital adequacy,
including those relating to "highly leveraged transactions," whether or
not having the force of law, and whether or not failure to comply
therewith would be unlawful and whether or not published or proposed
prior to the date hereof.
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
S&P or "P-1" by Moody's.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating more than 50% of
the aggregate Credit Exposures of all the Lenders on such date. For
purposes of the preceding sentence, the amount of the "Credit Exposure"
of each Lender shall be equal at all times (a) other than following the
occurrence and during the continuance of an Event of Default, to the
amount of its Revolving Credit Commitment; and (b) following the
occurrence and during the continuance of an Event of Default, to the
sum of (i) the amount of such Lender's Applicable Commitment Percentage
of Term Loan Outstandings plus (without duplication) (ii) the aggregate
principal amount of such Lender's Applicable Commitment Percentage of
Revolving Credit Outstandings; provided that, for the purpose of this
definition only, if any Lender shall have failed to fund its Applicable
Commitment Percentage of any Advance, the Revolving Credit Commitment
of such Lender shall be deemed reduced by the amount it so failed to
fund for so long as such failure shall continue and such Lender's
Credit Exposure attributable to such failure shall be deemed held by
any Lender making more than its Applicable Commitment Percentage of
such Advance to the extent it covers such failure.
"Reserve Requirement" means, 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 deposits by reference to which the
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<PAGE> 37
Eurodollar Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurodollar Rate Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Restricted Country" means, with respect to any Financed
Aircraft or Engine, any country to the extent that (a) any applicable
laws or sanctions of any applicable Governmental Authority prohibit (i)
the use or location of such Aircraft or Engine in such country by the
Applicable Carrier or any other Person then operating such Aircraft or
Engine, or (ii) any Loan hereunder to be used to finance or refinance
such Aircraft or Engine (or the lease thereof or the Applicable
Borrower's loans with respect thereto) if such Aircraft or Engine will
be used or located in such country by the Applicable Carrier or any
other Person then operating such Aircraft or Engine, or (b) any
insurance with respect to such Aircraft or Engine prohibits, or the
coverages under such insurance as a whole are reduced by, the use or
location of such Aircraft or Engine in such country, or (c) such
country (or any part thereof in which such Aircraft or Engine is to be
located) is designated by any insurance company providing insurance
with request to such Aircraft or Engine as a war zone, a recognized
area of hostilities or an area threatened with war or hostilities,
unless (in the case of this clause (c)) such Aircraft or Engine is
covered by war risk and allied perils insurance, in each case in the
amount (and with the provisions) required by Section 11 of the Security
Agreement (as if the Applicable Carrier were not a Rated Carrier,
except that a Rated Carrier may self-insure for such risks to the
extent permitted by (and subject to the overall limits on
self-insurance contained in) Section 11(c) of the Security Agreement).
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Revolving Loans to the
Borrowers up to an aggregate principal amount at any one time
outstanding equal to such Lender's Applicable Commitment Percentage of
the Total Revolving Credit Commitment, subject, however to Section
2.13(b)(i).
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Loans to the Borrowers by the Lenders
in the aggregate principal amount of the Total Revolving Credit
Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding.
"Revolving Credit Termination Date" means the earliest of (i)
the Stated Termination Date, (ii) the date of termination of Lenders'
obligations pursuant to Section 9.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrowers may voluntarily and
permanently terminate the Revolving Credit Facility by payment in full
of all Revolving Credit Outstandings, together with all accrued and
unpaid interest thereon and reduce the Total Revolving Credit
Commitment to zero pursuant to Section 2.7.
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"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Article II.
"Revolving Notes" means, collectively, the promissory notes of
the Borrowers evidencing Revolving Loans executed and delivered to the
Lenders as provided in Section 2.5 substantially in the form of Exhibit
F-1, with appropriate insertions as to amounts, dates and names of
Lenders.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill.
"Schedule A Carrier" means any Person listed on Exhibit P
attached hereto, as such Exhibit may be amended from time to time
pursuant to Section 7.20.
"Schedule B Carrier" means any Person listed on Exhibit Q
attached hereto, as such Exhibit may be amended from time to time
pursuant to Section 7.20.
"Security Agreement" means, collectively (or individually as
the context may indicate), (i) the Mortgage and Security Agreement
dated as of the date hereof by the Borrowers to the Agent, and (ii) any
additional Mortgage and Security Agreement (substantially in the form
of Exhibit J attached hereto) delivered to the Agent pursuant to
Section 5.2, 5.3 or 2.14, as hereafter modified, amended or
supplemented from time to time.
"Security Instruments" means, collectively, the Pledge
Agreement, Security Agreement, the Collateral Assignment, and all other
agreements, instruments and other documents, whether now existing or
hereafter in effect, pursuant to which any Borrower, any Beneficial
Owner, any Subsidiary, any Intermediary or any other Person shall grant
or convey to the Agent or the Lenders a Lien in property as security
for all or any portion of the Obligations, as any of them may be
amended, modified or supplemented from time to time.
"Segment" means a portion of the Term Loan (or all thereof)
with respect to which a particular interest rate is (or is proposed to
be) applicable.
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which any Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
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(ii) it is then able and expects to be able to pay
its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Stated Termination Date" means June 9, 1999, or such later
date as the parties may agree or may be applicable pursuant to Section
2.13.
"Subsidiary" means 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 one or more
Guarantors, Borrowers and/or by one or more of any Guarantor's
Subsidiaries or any Borrower's Subsidiaries. With respect to any
specified Guarantor or Borrower, the "Subsidiaries" of such Guarantor
or Borrower shall mean (y) any Subsidiary owned directly or indirectly
by such Guarantor or Borrower or by any of its Subsidiaries, or (z) any
trust with respect to which such Guarantor or such Borrower or any of
its Subsidiaries has a beneficial interest.
"Swap Agreement" means one or more agreements between any
Borrower and any Person with respect to Indebtedness evidenced by any
or all of the Notes, on terms mutually acceptable to such Borrower and
such Person, which agreements create Rate Hedging Obligations.
"Term Loan" has the meaning assigned thereto in Section 2.13.
"Term Loan Maturity Date" has the meaning assigned thereto in
Section 2.13.
"Term Loan Outstandings" means, as of any date of
determination, the aggregate principal amount of the Term Loan then
outstanding and all interest accrued thereon.
"Term Loan Termination Date" means (i) the Term Loan Maturity
Date or (ii) such earlier date of termination of Lenders' obligations
pursuant to Section 9.1 upon the occurrence of an Event of Default, or
(iii) such date as the Borrowers may voluntarily and permanently
terminate the Term Loan by payment in full of all Obligations incurred
in connection with the Term Loan.
"Term Note" has the meaning assigned in Section 2.13.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of any Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4068(f) of ERISA; or (iii) the termination of a Pension
Plan, the filing of a notice of intent to
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terminate a Pension Plan or the treatment of a Pension Plan amendment
as a termination under Section 4041 of ERISA; or (iv) the institution
of proceedings to terminate a Pension Plan by the PBGC; or (v) any
other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; or (vi) the partial or
complete withdrawal of any Borrower or any ERISA Affiliate from a
Multiemployer Plan; or (vii) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA; or (viii) any event or
condition which results in the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or Section 4245 of ERISA,
respectively; or (ix) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by the PBGC of proceedings to terminate a Multiemployer
Plan under Section 4042 of ERISA.
"Total Revolving Credit Commitment" means a principal amount
equal to $300,000,000, as reduced from time to time in accordance with
Section 2.7.
"Trust Agreement" means each of the Trust Agreements between a
Beneficial Owner and a Qualified Trustee.
"Trust Estate" means all estate, right, title and interest of
each Trustee in and to each Aircraft, each Engine, each lease and all
related documents, all Carrier Loan Documents and all other property of
the Trustee, including, without limitation, all amounts of rent,
proceeds of Carrier Loan Documents, insurance proceeds (other than
liability insurance proceeds payable to or for the benefit of any
Borrower, any Beneficial Owner, any Lender or the Agent) and
requisition, indemnity or other payments or any kind for or with
respect to each Aircraft and Engine.
"Trustee" means a Qualified Trustee, solely in its capacity as
trustee under a Trust Agreement.
"Type" shall mean any type of Loan (i.e., a Base Rate Loan or
a Eurodollar Rate Loan).
"UniCapital" means UniCapital Corporation, a Delaware
corporation.
"UniCapital TAA" means a Transfer and Administration Agreement
to be entered into among one or more direct or indirect subsidiaries or
affiliates of UniCapital as transferors, the master servicer (if any)
party thereto, Kitty Hawk Funding Corporation and NationsBank, as agent
and a bank investor, as such agreement may be amended, modified,
supplemented or restated from time to time.
"UniCapital Securitization Loan Agreement" means a Loan and
Security Agreement to be entered into among a direct or indirect
subsidiary or affiliate of UniCapital, as borrower, the master servicer
(if any) party thereto, Kitty Hawk Funding Corporation,
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NationsBank, as agent and bank investor, and any other bank party
thereto, as such agreement may be amended, modified, supplemented or
restated from time to time.
"UniCapital Facility" shall mean any of the facilities
pursuant to (a) this Agreement, (b) the UniCapital Revolving Credit
Agreement, (c) the UniCapital TAA or (d) the UniCapital Securitization
Loan Agreement.
"UniCapital IPO" means the initial public offering of not less
than $425 million of common stock of UniCapital, as more fully
described in the UniCapital Registration Statement.
"UniCapital Registration Statement" means that certain
Registration Statement of UniCapital on Form S-1, Registration No.
333-46603, as filed with the Securities and Exchange Commission on
February 20, 1998, as amended, including all documents incorporated
therein by reference.
"UniCapital Revolving Credit Agreement" means the Credit
Agreement dated as of June 10, 1998, among UniCapital, NationsBank, as
agent, and the lenders party thereto, as such agreement may be amended,
modified or restated from time to time.
"UniCapital Revolving Loan Documents" means all "Loan
Documents" as defined in the UniCapital Revolving Credit Agreement.
"UniCapital Revolver Loans" means all "Loans" as defined in
the UniCapital Revolving Credit Agreement.
"UniCapital Revolver Obligations" means all "Obligations" as
defined in the UniCapital Revolving Credit Agreement.
"UniCapital Special Purpose Corporation" means any corporation
(a) that is organized under the laws of any state of the United States
and has its principal place of business in the United States, and (b)
which is a direct or indirect, wholly-owned Subsidiary of Cauff Lippman
or NSJ.
"UniCapital Subsidiary Trust" means any trust (a) that is
organized under the laws of a state of the United States and has its
principal place of business in the United States, (b) whose trustee is
a Qualified Trustee, and (c) in which 100% of all beneficial interests
are owned directly by a direct or indirect wholly-owned Subsidiary of
Cauff Lippman or NSJ.
"U.S. Carrier" means any Eligible Carrier listed under heading
"United States" in Exhibit P or Q.
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"Voting Stock" means shares of 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 if the right so to vote has been
suspended by the happening of such a contingency.
1.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein shall
have the meanings assigned to such terms and shall be interpreted in
accordance with GAAP applied on a Consistent Basis.
(b) Each term defined in Article 1 or 9 of the Florida Uniform
Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code
of another jurisdiction is controlling, in which case such terms shall
have the meaning given in the Uniform Commercial Code of the applicable
jurisdiction.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references herein
to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement.
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and vice versa, as the
context may require.
(f) When used herein or in any other Loan 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.
(g) 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.
(h) All dates and times of day specified herein shall refer to
such dates and times at Charlotte, North Carolina.
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(i) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity
to request) revisions to, the Loan Documents, and any rule of
construction that ambiguities are to be resolved against the drafting
party shall be inapplicable in the construing and interpretation of the
Loan Documents and all exhibits, schedules and appendices thereto.
(j) Any reference to an officer of any Borrower or any other
Person by reference to the title of such officer shall be deemed to
refer to each other officer of such Person, however titled, exercising
the same or substantially similar functions.
(k) All references to any agreement or document as amended,
modified or supplemented, or words of similar effect, shall mean such
document or agreement, as the case may be, as amended, modified or
supplemented from time to time only as and to the extent permitted
therein and in the Loan Documents.
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ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances to any of the Borrowers
under the Revolving Credit Facility from time to time from the Closing Date
until the Revolving Credit Termination Date on a pro rata basis as to the total
borrowing requested by the applicable Borrower on any day determined by such
Lender's Applicable Commitment Percentage up to but not exceeding the Revolving
Credit Commitment of such Lender, provided, however, that (A) the proceeds of
such Advance shall be used solely to finance the purchase by such Borrower or an
Eligible Carrier of an Eligible Aircraft or Eligible Engine, and (B) the amount
of such Advance (together with any other Advances relating to such Aircraft or
Engine) shall not exceed the Applicable Aircraft Borrowing Base or Applicable
Engine Borrowing Base (as the case may be) of such Aircraft or Engine; and
provided, further, that the Lenders will not be required and shall have no
obligation to make any such Advance (i) so long as a Default or an Event of
Default has occurred and is continuing or (ii) if the Agent has accelerated the
maturity of any of the Notes as a result of an Event of Default; and provided
further, that immediately after giving effect to each such Advance, (Y) the
amount of Revolving Credit Outstandings shall not exceed the lesser of the
Borrowing Base or the Total Revolving Credit Commitment and (Z) none of the
Concentration Restrictions shall have been exceeded or otherwise violated.
Within such limits, the Borrowers may borrow, repay and reborrow under the
Revolving Credit Facility on a Business Day from the Closing Date until, but (as
to borrowings and reborrowings) not including, the Revolving Credit Termination
Date; provided, however, that (1) no Revolving Loan that is a Eurodollar Rate
Loan shall be made which has an Interest Period that extends beyond the Stated
Termination Date and (2) each Revolving Loan that is a Eurodollar Rate Loan may,
subject to the provisions of Section 2.7, be repaid only on the last day of the
Interest Period with respect thereto unless such payment is accompanied by the
additional payment, if any, required by Section 4.5.
(b) Amounts. Except as otherwise permitted by the Lenders from
time to time, (i) the amount of Revolving Credit Outstandings shall not exceed
at any time the lesser of the Borrowing Base or the Total Revolving Credit
Commitment, and (ii) none of the Concentration Restrictions shall be exceeded;
and, in the event there shall be outstanding any such excess under clause (i) or
(ii), the Borrowers, jointly and severally, shall immediately make such payments
and prepayments as shall be necessary to comply with these restrictions. Each
Revolving Loan hereunder and each Conversion under Section 2.8, shall be in an
amount of at least $1,000,000.
(c) Advances. (i) An Authorized Representative shall give the
Agent (1) at least three (3) Business Days' irrevocable written notice by
telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Revolving Loan that is a Eurodollar Rate Loan (whether representing an
additional borrowing hereunder or the Conversion of a borrowing hereunder from
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Base Rate Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and (2)
irrevocable written notice by telefacsimile transmission of a Borrowing Notice
or Interest Rate Selection Notice (as applicable) with appropriate insertions,
effective upon receipt, of each Revolving Loan that is a Base Rate Loan (whether
representing an additional borrowing hereunder or the Conversion of borrowing
hereunder from Eurodollar Rate Loans to Base Rate Loans) prior to 10:30 A.M. on
the day of such proposed Revolving Loan. Each such notice shall (A) specify the
name of the respective Borrower, the amount of the borrowing, the type of
Revolving Loan (Base Rate or Eurodollar Rate), the date of borrowing and, if a
Eurodollar Rate Loan, the Interest Period to be used in the computation of
interest, and (B) identify the Financed Aircraft or Engine the acquisition of
which is to be financed with the proceeds of the borrowing. Notice of receipt of
such Borrowing Notice or Interest Rate Selection Notice, as the case may be,
together with the amount of each Lender's portion of an Advance requested
thereunder, shall be provided by the Agent to each Lender by telefacsimile
transmission with reasonable promptness, but (provided the Agent shall have
received such notice by 10:30 A.M.) not later than 1:00 P.M. on the same day as
the Agent's receipt of such notice.
(ii) Not later than 2:00 P.M. on the date specified for each borrowing
under this Section 2.1, each Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of the Advance or Advances to
be made by it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's Applicable
Commitment Percentage of the Revolving Loan or Revolving Loans to be made on
such day. Such wire transfer shall be directed to the Agent at the Principal
Office and shall be in the form of Dollars constituting immediately available
funds. The amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the applicable Borrower by
delivery of the proceeds thereof to the Borrowers' Account or otherwise as shall
be directed in the applicable Borrowing Notice by an Authorized Representative
and reasonably acceptable to the Agent.
(iii) The Borrowers shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to Convert the Revolving Loans
in accordance with Section 2.8. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, provided, however, there shall not be outstanding
at any one time Eurodollar Rate Loans and Eurodollar Rate Segments for any or
all of the Borrowers having more than six (6) different Interest Periods. If the
Agent does not receive a Borrowing Notice or an Interest Rate Selection Notice
giving notice of election of the duration of an Interest Period or of Conversion
of any Loan to or Continuation of a Loan as a Eurodollar Rate Loan by the time
prescribed by Section 2.1(c) or 2.8, the applicable Borrower shall be deemed to
have elected to Convert such Segment to (or Continue such Segment as) a Base
Rate Loan until such Borrower notifies the Agent in accordance with Section 2.8.
2.2. Payment of Interest. (a) The Borrowers, jointly and severally,
shall pay interest to the Agent for the account of each Lender on the
outstanding and unpaid principal amount of each Loan made by such Lender for the
period commencing on the date of such Loan until such Loan shall be due at the
then applicable Base Rate for Base Rate Loans or applicable Eurodollar
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Rate for Eurodollar Rate Loans, as designated by the Authorized Representative
pursuant to Section 2.1; provided, however, that if any Event of Default shall
occur and be continuing, all amounts outstanding hereunder shall bear interest
thereafter at the Default Rate.
(b) Interest on each Loan shall be computed on the basis of a
year of 360 days and calculated in each case for the actual number of days
elapsed. Interest on each Revolving Loan shall be paid (i) quarterly in arrears
on the last Business Day of each June, September, December and March, commencing
June 30, 1998 for each Base Rate Loan, (ii) on the last day of the applicable
Interest Period for each Eurodollar Rate Loan and, if such Interest Period
extends for more than three (3) months, at intervals of three (3) months after
the first day of such Interest Period, and (iii) upon payment in full of the
principal amount of such Loan.
2.3. Payment of Principal. (a) Scheduled Repayments; Voluntary
Prepayments. Subject to Section 2.13(b)(i) hereof, the principal amount of each
Revolving Loan shall be due and payable to the Agent for the benefit of each
Lender in full on the Revolving Credit Termination Date, or earlier as
specifically provided herein. The principal amount of any Base Rate Loan may be
prepaid in whole or in part at any time. The principal amount of any Eurodollar
Rate Loan may be prepaid only at the end of the applicable Interest Period
unless the Borrowers, jointly and severally, shall pay to the Agent for the
account of the Lenders the additional amount, if any, required under Section
4.5. All prepayments of Loans made by any Borrower shall be in the amount of at
least $1,000,000, or the amount equal to all Revolving Credit Outstandings of a
Borrower, or such other amount as necessary to comply with Section 2.1(b) or
Section 2.8.
(b) Mandatory Prepayments. (i) Upon the sale of any Aircraft, Engine or
other asset by any Borrower, or upon the refinancing of any Indebtedness of any
Borrower arising from any Loan hereunder or the refinancing of any Indebtedness
of any Borrower or Guarantor relating to a loan or advance made (directly or
indirectly) with the proceeds of any UniCapital Revolver Loan, the Borrowers,
jointly and severally, shall immediately pay to the Agent an amount equal to the
net proceeds of such sale or refinancing, which amount shall be applied by the
Agent to reduce outstanding principal and accrued interest on any Loans made to,
or for the benefit of, such Borrower. If any net proceeds of such sale or
refinancing remain after the repayment in full of all outstanding principal and
accrued interest on such Loans, such excess proceeds shall be promptly used by
such Borrower to repay any intercompany loans or advances or capital
contributions that were made (directly or indirectly) to such Borrower using the
proceeds of any UniCapital Revolver Loans and thereafter shall be used by such
Borrower in its discretion subject to compliance with the terms of this
Agreement and the other Loan Documents.
(ii) On and after the Stated Termination Date on which the
Revolving Loans are converted to the Term Loan (the "Conversion Date"), the
Borrowers, jointly and severally, shall immediately pay over to the Agent all
Excess Proceeds (defined below) of any lease with respect to any Financed
Aircraft or Engine and all Excess Proceeds of any Carrier Loan Documents, in
each case which proceeds are received by any Borrower on or after the Conversion
Date; provided that the aggregate amount of Excess Proceeds paid by the
Borrowers to the Agent each month pursuant to this sentence with respect to any
Financed Aircraft or Engine shall not exceed one-half
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of one percent (.50%) of the aggregate outstanding principal amount of all Loans
hereunder with respect to such Financed Aircraft or Engine (the "Excess Proceeds
Limitation"). Such Excess Proceeds (subject to the Excess Proceeds Limitation)
with respect to any lease or Carrier Loan Document shall be applied by the Agent
to reduce outstanding principal and accrued and unpaid interest on any Loans
made to, or for the benefit of, the Applicable Borrower. If any such Excess
Proceeds (subject to the Excess Proceeds Limitation) remain after the repayment
in full of all outstanding principal and accrued interest on such Loans, such
Excess Proceeds shall be promptly used by such Borrower to repay any
intercompany loans or advances or capital contributions that were made (directly
or indirectly) to such Borrower using proceeds of any UniCapital Revolver Loans
and thereafter shall be used by such Borrower in its discretion subject to
compliance with the terms of this Agreement and the other Loan Documents. For
the purposes of this Section 2.3(b)(ii), "Excess Proceeds" of any lease or
Carrier Loan Document shall mean (A) all proceeds of such lease or Carrier Loan
Document (excluding security deposits, maintenance reserves, insurance proceeds
and other amounts, in each case to the extent such amounts may be required to be
repaid by the Applicable Borrower to the Applicable Carrier) less (B) the sum of
(1) any interest paid by the Applicable Borrower on Loans hereunder and (2) any
reasonable operating expenses (including without limitation fees payable
hereunder and appraisal costs) of the Applicable Borrower to the extent actually
paid by such Borrower to Persons who are not Affiliates of such Borrower.
2.4. Manner of Payment. (a) Each payment of principal (including any
prepayment) and payment of interest and fees, and any other amount required to
be paid to the Lenders with respect to the Loans, shall be made to the Agent at
the Principal Office, for the account of each Lender, in Dollars and in
immediately available funds without setoff, deduction or counterclaim before
12:30 P.M. on the date such payment is due. The Agent may, at the direction of
an Authorized Representative, but shall not be obligated to, debit the amount of
any such payment which is not made by such time to any ordinary deposit account,
if any, of any Borrower with the Agent.
(b) The Agent shall deem any payment made by or on behalf of any
Borrower hereunder that is not made both in Dollars and in immediately available
funds and prior to 12:30 P.M. to be a non-conforming payment. Any such payment
shall not be deemed to be received by the Agent until the time such funds become
available funds. Any non-conforming payment may constitute or become a Default
or Event of Default. Interest shall continue to accrue on any principal as to
which a non-conforming payment is made until the later of (x) the date such
funds become available funds or (y) the next Business Day at the Default Rate
from the date such amount was due and payable.
(c) In the event that any payment hereunder or under the Revolving
Notes becomes due and payable on a day other than a Business Day, then such due
date shall be extended to the next succeeding Business Day unless provided
otherwise under clause (ii) of the definition of "Interest Period"; provided
that interest shall continue to accrue during the period of any such extension
and provided further, that in no event shall any such due date be extended
beyond the Revolving Credit Termination Date.
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(d) Any payment or prepayment of any principal or interest on any Loan
hereunder shall be accompanied by a certificate signed by an Authorized
Representative and delivered to the Agent, which certificate shall identify such
Loan, the amount of principal and interest paid thereon, and the Borrower to
whom, or for whose benefit, such Loan was originally advanced. Upon the
repayment in full of all principal and interest on all Loans made to, or for the
benefit of, any Borrower, such Borrower shall promptly use any of its remaining
monies and other assets to repay any intercompany loans or advances or capital
contributions that were made (directly or indirectly) to such Borrower using the
proceeds of any UniCapital Revolver Loan, and thereafter for any other purpose
of such Borrower in its discretion subject to compliance with the terms of this
Agreement and the other Loan Documents.
2.5. Revolving Notes. Revolving Loans made by each Lender shall be
evidenced by the Revolving Note payable to the order of such Lender in the
respective amount of its Applicable Commitment Percentage of the Revolving
Credit Commitment, which Revolving Note shall be dated the Closing Date or a
later date pursuant to an Assignment and Acceptance and shall be duly completed,
executed and delivered by the Borrowers.
2.6. Pro Rata Payments. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Loans and the fees
described in Section 2.10 shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by any Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from any Borrower.
2.7. Reductions. The Borrowers shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than three (3) Business Days' written
notice to the Agent, effective upon receipt, to reduce the Total Revolving
Credit Commitment. The Agent shall give each Lender, within one (1) Business Day
of receipt of such notice, telefacsimile notice, or telephonic notice (confirmed
in writing), of such reduction. Each such reduction shall be in the aggregate
amount of $5,000,000 or such greater amount which is in an integral multiple of
$1,000,000, or the entire remaining Total Revolving Credit Commitment, and shall
permanently reduce the Total Revolving Credit Commitment. Each reduction of the
Total Revolving Credit Commitment shall be accompanied by payment of the
Revolving Loans to the extent that the principal amount of Revolving Credit
Outstandings exceeds the Total Revolving Credit Commitment after giving effect
to such reduction, together with accrued and unpaid interest on the amounts
prepaid. No such reduction shall result in the payment of any Eurodollar Rate
Loan other than on the last day of the Interest Period of such Eurodollar Rate
Loan unless such prepayment is accompanied by amounts due, if any, under Section
4.5.
2.8. Conversions and Elections of Subsequent Interest Periods. Subject
to the limitations set forth below and in Article IV, the Borrowers may:
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(a) upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on
any Business Day, Convert all or a part of Eurodollar Rate Loans to Base Rate
Loans on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) provided that no Default or Event of Default shall have
occurred and be continuing and upon delivery, effective upon receipt, of a
properly completed Interest Rate Selection Notice to the Agent on or before
10:30 A.M. three (3) Business Days' prior to the date of such election or
Conversion:
(i) 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
(ii) Convert Base Rate Loans to Eurodollar Rate
Loans on any Business Day.
Each election and Conversion pursuant to this Section 2.8 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1, 2.3 and Article IV. The Agent
shall give written notice to each Lender of such notice of election or
Conversion prior to 3:00 P.M. on the day such notice of election or Conversion
is received. All such Continuations or Conversions of Loans shall be effected
pro rata based on the Applicable Commitment Percentages of the Lenders.
2.9. Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment which shall be available to the Borrowers as
Advances shall be reduced by the aggregate amount of Revolving Credit
Outstandings.
2.10. Unused Fee. For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date (without giving effect to any
change in the Revolving Credit Termination Date arising from a change in the
definition of "Stated Termination Date" pursuant to Section 2.13(b)(i)(y)), the
Borrowers, jointly and severally, agree to pay to the Agent, for the pro rata
benefit of the Lenders based on their Applicable Commitment Percentages, an
unused fee equal to the Applicable Unused Fee multiplied by the average daily
amount by which the Total Revolving Credit Commitment exceeds the Revolving
Credit Outstandings. Such fees shall be due in arrears on the last Business Day
of each June, September, December and March commencing June 30, 1998 to and on
the Revolving Credit Termination Date. Notwithstanding the foregoing, so long as
any Lender fails to make available any portion of its Revolving Credit
Commitment when requested, such Lender shall not be entitled to receive payment
of its pro rata share of such fee until such Lender shall make available such
portion. Such fee shall be calculated on the basis of a year of 360 days for the
actual number of days elapsed.
2.11. Deficiency Advances. No Lender shall be responsible for any
default of any other Lender in respect to such other Lender's obligation to make
any Loan hereunder nor shall the
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Revolving Credit Commitment of any Lender hereunder be increased as a result of
such default of any other Lender. Without limiting the generality of the
foregoing, in the event any Lender shall fail to advance funds to any Borrower
as herein provided, the Agent may in its discretion, but shall not be obligated
to, advance under the applicable Note in its favor as a Lender all or any
portion of such amount or amounts (each, a "deficiency advance") and shall
thereafter be entitled to payments of principal of and interest on such
deficiency advance in the same manner and at the same interest rate or rates to
which such other Lender would have been entitled had it made such Advance under
its Note; provided that, (i) such defaulting Lender shall not be entitled to
receive payments of principal, interest or fees with respect to such deficiency
advance until such deficiency advance shall be paid by such Lender and (ii) upon
payment to the Agent from such other Lender of the entire outstanding amount of
each such deficiency advance, together with accrued and unpaid interest thereon,
from the most recent date or dates interest was paid to the Agent by a Borrower
on each Loan comprising the deficiency advance at the interest rate per annum
for overnight borrowing by the Agent from the Federal Reserve Bank, then such
payment shall be credited against the applicable Note of the Agent in full
payment of such deficiency advance and such Borrower shall be deemed to have
borrowed the amount of such deficiency advance from such other Lender as of the
most recent date or dates, as the case may be, upon which any payments of
interest were made by such Borrower thereon.
2.12. Use of Proceeds. The proceeds of each Loan made pursuant to the
Revolving Credit Facility hereunder shall be used by the Applicable Borrower to
finance the purchase, by such Borrower or an Eligible Carrier, of an Eligible
Aircraft or Eligible Engine.
2.13. (a) Extension of Stated Termination Date. At the request of the
Borrowers the Lenders may, in their sole discretion, elect to extend the Stated
Termination Date then in effect for one (1) additional period of 364 days. The
Borrowers shall notify the Lenders of their request for such an extension by
delivering to the Agent and the Lenders notice of such request signed by an
Authorized Representative not more than ninety (90) days nor less than sixty
(60) days prior to the Stated Termination Date then in effect. If the Lenders
shall elect to so extend, the Agent shall notify the Borrowers in writing within
thirty (30) days of its receipt of such request for extension of the decision of
the Lenders as to whether to extend the Stated Termination Date. Failure by any
Lender to respond to a request for an extension shall constitute a refusal of
such Lender to give its consent to such extension. Failure by the Agent to give
such notice shall constitute refusal by the Lenders to extend the Stated
Termination Date.
(b) Term Loan to Repay Revolving Loans Outstanding at the Stated
Termination Date.
(i) Election of Term Loan. The Borrowers shall have
the option to convert the outstanding principal balance of the
Revolving Loans outstanding as of the Stated Termination Date,
to a term loan maturing on the date (the "Term Loan Maturity
Date") that is one year after the Stated Termination Date. The
Borrowers may exercise such option by giving written notice to
the Agent at least fifteen (15) days prior to the Stated
Termination Date. If the Agent does not receive such
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notification within the time period specified in the preceding
sentence of this paragraph (and unless such Stated Termination
Date has been extended in accordance with the terms of
subsection (a) above), the principal amount of all Revolving
Loans shall be due and payable on the Stated Termination Date.
Revolving Loans converted to a Term Loan at the election of
the Borrowers in accordance with the terms of this subsection
(b) shall be referred to collectively as the "Term Loan". The
Term Loan may be comprised of Base Rate Segments and
Eurodollar Rate Segments as the Borrowers may elect in
accordance with the provisions hereof. Amounts repaid or
prepaid on the Term Loan may not be reborrowed. For purposes
of this Agreement, in the event that the Borrowers elect to
convert Revolving Loans outstanding as of the Stated
Termination Date in accordance herewith, then on and after the
Stated Termination Date (w) references herein to the "Total
Revolving Credit Commitment" shall mean the aggregate
principal amount of the Term Loan as of the Stated Termination
Date less all principal payments made with respect to the Term
Loan hereunder, whether scheduled payment, voluntary or
optional prepayment or otherwise, (x) references herein to
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the obligation of such Lender to permit such
conversion of its Revolving Loans to a portion of the Term
Loan in a principal amount equal to such Lender's Applicable
Commitment Percentage of the aggregate Term Loan, (y)
references herein to "Stated Termination Date" shall mean the
Term Loan Maturity Date, and (z) the Revolving Note of each
Lender shall be deemed to be a "Term Note" representing such
Lender's portion of the Term Loan, and references herein to
the "Revolving Notes" shall mean the Term Notes. Any
prepayments of the Term Loan shall be applied to installments
of principal in the inverse order of maturities.
(ii) Interest on the Term Loan. The Segments of the
Term Loan shall bear interest on the same terms as apply to
Revolving Loans prior to the Revolving Credit Termination
Date.
2.14. Designation of Borrowing Affiliate; Releases. An Authorized
Representative may from time to time designate any UniCapital Subsidiary Trust
or UniCapital Special Purpose Corporation which has not joined in the execution
of this Agreement as a "Borrowing Affiliate" hereunder by causing such
UniCapital Subsidiary Trust or UniCapital Special Purpose Corporation to execute
and deliver a duly completed Assumption Letter (in the form attached hereto as
Exhibit R) to the Agent with the written acknowledgment of the Borrowers and the
Agent at the foot thereof, together with (a) Facility Guaranties executed by
each Beneficial Owner of any such UniCapital Subsidiary Trust, by each
Subsidiary of any such Beneficial Owner (other than such UniCapital Subsidiary
Trust), by each Subsidiary of such UniCapital Subsidiary Trust or of such
UniCapital Special Purpose Corporation, and by the Applicable Intermediary (if
any), (b) Security Agreements signed by such UniCapital Subsidiary Trust or
UniCapital Special Purpose Corporation, by each Beneficial Owner of any such
UniCapital Subsidiary Trust, by each Subsidiary of any such Beneficial Owner, by
each Subsidiary of such UniCapital Subsidiary Trust or UniCapital Special
Purpose Corporation, and by the Applicable Intermediary (if any), (c)
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Pledge Agreements signed by the respective Beneficial Owners and other owners,
granting a security interest in the Pledged Interests in such UniCapital
Subsidiary Trust or UniCapital Special Purpose Corporation, in any Subsidiary
thereof, in any Beneficial Owner and in any Subsidiary thereof, and in the
Applicable Intermediary (if any), and (d) all additional documents required
under such Assumption Letter. Upon such execution, delivery and consent, such
UniCapital Subsidiary Trust or UniCapital Special Purpose Corporation (as the
case may be) shall for all purposes be a party hereto as a Borrower as fully as
if it had executed and delivered this Agreement. So long as (w) all Loans made
to or on behalf of any Borrower, together with all accrued interest on such
Loans, have been paid in full, (x) all other outstanding Obligations of such
Borrower (except Obligations to pay principal and interest on Loans other than
those Loans described in clause (x)) have been paid in full, and (y) all equity
contributions and loans that were made (directly or indirectly) to such Borrower
using the proceeds of any UniCapital Revolving Loans, together with all interest
accrued on such Loans, have been paid in full, and (z) no Default or Event of
Default has occurred and will be continuing after giving effect to such
termination, then such Borrower may, by not less than fourteen (14) days prior
notice to the Agent (which shall promptly notify the Lenders thereof), (i)
terminate its status as a "Borrowing Affiliate" and "Borrower" hereunder and
under the other Loan Documents, and (ii) (with respect to any Beneficial Owner
of such Borrower) unless such Person also holds a beneficial interest in any
other Borrower, to terminate the status of such Person and any other Subsidiary
of such Person as a "Guarantor" hereunder and under the other Loan Documents,
and (iii) to terminate the status of the Applicable Intermediary (if any) and
any other Subsidiary of such Borrower as a "Guarantor" hereunder and under the
other Loan Documents. Upon such terminations (provided the conditions to such
terminations are satisfied), the Agent shall take all actions reasonably
requested by such Borrower (A) to release the Liens of the Agent on all
Aircraft, Engines and other Collateral owned by such Borrower and its
Subsidiaries (including the Applicable Intermediary, if any) and to release such
Borrower and such Subsidiaries from all of their respective obligations under
the Loan Documents (including without limitation a written release to such
effect), (B) unless such Beneficial Owner also holds a beneficial interest in
any other Borrower, to release the Liens of the Agent on all Collateral owned by
such Beneficial Owner and its other Subsidiaries and to release such Beneficial
Owner and such other Subsidiaries from all of their respective obligations under
the Loan Documents (including without limitation a written release to such
effect), (C) to release the Lien of the Agent with respect to any Pledged
Interests in such Borrower, its Subsidiaries and the Applicable Intermediary,
and (D) (unless such Beneficiary Owner also holds a beneficial interest in any
other Borrower) to release the Lien of the Agent with respect to any Pledged
Interests in such Beneficial Owner. For the purposes of this Section 2.14, the
Initial Borrower shall not be deemed to be a "Borrowing Affiliate." Any
provision of this Section 2.14 or any other provision of any Loan Document
notwithstanding, in no event shall UniCapital be released from its obligations
to pay indemnification to, or reimburse any costs or expenses of, the Agent or
any Lender (including without limitation the obligations under Article IV and
Sections 4.6, 7.15, 11.5 and 11.9), which agreements and obligations shall
survive any release or termination of any Credit Party pursuant to this Section
2.14.
2.15. Joint and Several Liability. Each Borrower (including without
limitation the Initial Borrower and each Borrowing Affiliate) agrees and
acknowledges that the Obligations constitute
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and will constitute joint and several obligations and liabilities of the
Borrowers; provided, however, that the liability of any specified Borrower
individually with respect to the Obligations shall be limited to an aggregate
amount equal to the largest amount that would not render such Borrower's
obligations hereunder subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any applicable state law.
Each Borrower further agrees and acknowledges that all actions taken, elections
made and notices and certificates furnished or received by it under or pursuant
to the Loan Documents shall constitute the action, election, notice or
certification of all of the Borrowers under the Loan Documents, and that each
Authorized Representative shall have full authority to act for and on behalf of
all of the Borrowers for all purposes of the Loan Documents. Each Borrower
agrees that the joint and several liability of the Borrowers shall not be
impaired or affected by any modification, supplement, extension or amendment of
any contract or agreement to which the parties thereto may hereafter agree, nor
by any modification, release or other alteration of any of the rights of the
Agent or any Lender with respect to the Collateral other than as provided in
Section 2.14 hereof, nor by any delay, extension of time, renewal, compromise or
other indulgence granted by the Agent, any Lender or any other Person with
respect to any of the Obligations, nor by any other agreements or arrangements
whatever with any other Borrower or with anyone else, each Borrower hereby
waiving all notice of any such delay, extension, release, substitution, renewal,
compromise or any such delay, extension, release, substitution, renewal,
compromise or other indulgence, and hereby consenting to be bound thereby as
fully and effectually as if it had expressly agreed thereto in advance. The
liability of each Borrower hereunder is direct and unconditional as to all of
the Obligations hereunder, and may be enforced without requiring the Agent, any
Lender or any other Person first to resort to any other right, remedy or
security; no Borrower shall have any right of subrogation, reimbursement or
indemnity whatsoever, nor any right of recourse to security for indemnity
whatsoever, nor any right of recourse to security for any of the Obligations
hereunder, unless and until all of said Obligations have been paid in full;
except as provided in Section 2.14 hereof and subject to the proviso to the
first sentence of this Section 2.15, nothing shall discharge or satisfy the
liability of any Borrower hereunder except the full payment and performance of
all of the Obligations; any and all present and future debts and obligations of
each Borrower to the other Borrowers are hereby waived and postponed in favor of
and subordinated to the full payment and performance of all present and future
Obligations of the Borrowers to the Agent, the Lenders and any other Person.
2.16. Eligible Lease Involving Eligible Intermediary. In lieu of
leasing a Financed Aircraft or Engine directly to an Eligible Carrier, a
Borrower may lease such Financed Aircraft or Engine directly to an Eligible
Intermediary pursuant to an Eligible Lease described in clause (X) of the
proviso to the definition of "Eligible Lease"; provided that
(a) such Eligible Intermediary simultaneously leases such Aircraft or
Engine to an Eligible Carrier pursuant to an Eligible Lease described in clause
(Y) of the proviso to the definition of "Eligible Lease"; and such Eligible
Carrier is not a U.S. Carrier;
(b) in the case of any Loan with respect to such Aircraft or Engine,
all Loan conditions that pertain to any Eligible Lease or other lease by a
Borrower of such Aircraft or Engine
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(including without limitation requirements concerning the perfection of Liens on
Collateral, and delivery of originals of leases and Lessee Estoppel
Certificates) shall be satisfied with respect to each such lease to or by the
Applicable Intermediary; and
(c) all provisions of any Loan Document that pertain to any Eligible
Lease or other lease by a Borrower of such Aircraft or Engine shall apply to
each such lease to or by the Applicable Intermediary.
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ARTICLE III
Security
3.1. Security. As security for the full and timely payment and
performance of all Obligations, the Credit Parties shall on or before the date
of the initial Advance do or cause to be done all things necessary in the
opinion of the Agent and its counsel to grant to the Agent for the benefit of
the Lenders a duly perfected first priority security interest under all
applicable laws (including without limitation under the FAA Act (in the case of
an Aircraft registered in the United States, or in the case of an Engine the
Lien on which is recorded under United States law), or any Applicable Foreign
Aviation Laws (in the case of any other Aircraft of Engine)) in all Collateral
subject to no prior Lien or other encumbrance (that, in each case, has not
previously been satisfied in full) or restriction on transfer (other than
Permitted Liens and restrictions on transfer imposed by applicable laws or
referred to in Schedule 6.7).
3.2. Further Assurances. At the request of the Agent, each Borrower
will, or will cause other Credit Parties (as the case may be), to, execute, by
its duly authorized officers, alone or with the Agent, any certificate,
instrument, statement or document, or to procure any such certificate,
instrument, statement or document, or to take such other action (and pay all
connected costs) which the Agent reasonably deems necessary from time to time to
create, continue or preserve the liens and security interests in Collateral (and
the perfection and priority thereof) of the Agent contemplated hereby and by the
other Loan Documents and specifically including all Collateral acquired by any
Borrower or any Guarantor or any other Credit Party after the Closing Date.
3.3. Information Regarding Collateral. Each Borrower represents,
warrants and covenants that (i) the chief executive office of each Borrower and
each other Person providing Collateral pursuant to a Security Instrument (each,
a "Grantor") at the Closing Date is located at the address or addresses
specified on Schedule 3.3, and (ii) Schedule 3.3 contains a true and complete
list of (a) the name and address of each Grantor and of each other Person that
has effected any merger or consolidation with a Grantor or contributed or
transferred to a Grantor any property constituting Collateral at any time since
January 1, 1997 (excluding Persons making sales in the ordinary course of their
businesses to a Grantor of property constituting inventory in the hands of such
seller), (b) each location of the chief executive office and principal place of
business of each Grantor at any time since January 1, 1997, (c) each location in
which goods constituting Collateral (other than Aircraft or Engines) are or have
been located since January 1, 1997, (d) the country of registration (if
applicable) of each Aircraft; and (e) each trade name used by any Grantor since
January 1, 1997 and the purposes for which it was used. No Borrower shall
change, or permit any other Grantor to change, the location of its chief
executive office or principal place of business or any location specified in
clause (c) of the immediately preceding sentence, or use or permit any other
Grantor to use, any additional trade style, except upon giving not less than
thirty (30) days' prior written notice to the Agent and taking or causing to be
taken all such action at the Borrowers' or such other Grantor's expense as may
be reasonably requested by the Agent to perfect or maintain the perfection of
the Lien of the Agent in Collateral.
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3.4. Quiet Enjoyment. The Agent and each Lender hereby agree that, so
long as no event of default shall have occurred and be continuing under an
Eligible Lease or Eligible Carrier Loan Document, it will not interfere with the
quiet enjoyment of the possession and use of the Aircraft or Engine by the
Applicable Carrier during the term of such Eligible Lease or Eligible Carrier
Loan Document and it will (subject to any requirements or restrictions imposed
by applicable law) dispose of its interest in the Eligible Aircraft or Eligible
Engine leased or financed under such Eligible Lease or Eligible Carrier Loan
Document expressly subject to such Eligible Lease or Eligible Carrier Loan
Document and on terms such that the purchaser provides a similar right of quiet
enjoyment to such Applicable Carrier. Upon the request of any Borrower, the
Agent (on behalf of itself and the Lenders) will confirm the immediately
preceding sentence in writing to any Applicable Carrier.
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ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return.
(a) 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 Lending Office) with any request or directive (whether or not having
the force of law) of any such governmental authority, central bank, or
comparable agency issued after the date hereof:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
Rate Loans, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Rate 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 Lending
Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, compulsory loan, 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 Lender (or its Applicable Lending Office),
including the Revolving Credit Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting this Agreement or its Note or any of such extensions of
credit or liabilities or 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 Loans or to reduce any sum received or receivable by such Lender
(or its Applicable Lending Office) under this Agreement or its Note with respect
to any Eurodollar Rate Loans, then UniCapital and the Borrowers, jointly and
severally, shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction, provided that in
determining such costs, no Lender shall treat the Borrowers less favorably than
other borrowers of similar size and circumstances. If any Lender requests
compensation by UniCapital or any Borrower under this Section 4.1(a), the
Borrowers may, by notice to such Lender (with a copy to the 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
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the provisions of Section 4.4 shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested.
(b) 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 issued after
the date hereof, 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 UniCapital and
the Borrowers, jointly and severally, shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.
(c) Each Lender shall promptly notify UniCapital and the Borrowers and
the 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
4.1 and will designate a different Applicable Lending Office if such designation
will avoid the need for, or 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 4.1 shall furnish to the
Borrowers and the Agent a statement setting forth the additional amount or
amounts to be paid 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.
4.2. Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:
(a) the 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
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrowers 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 Borrowers shall, jointly and
severally, on the last day(s) of the then current Interest Period(s) for the
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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.
4.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Rate Loans hereunder, then such
Lender shall promptly notify the Borrowers thereof and such Lender's obligation
to make or Continue Eurodollar Rate Loans and to Convert other Types of Loans
into Eurodollar Rate Loans shall be suspended until such time as such Lender may
again make, maintain, and fund Eurodollar Rate Loans (in which case the
provisions of Section 4.4 shall be applicable).
4.4. Treatment of Affected Loans. If the obligation of any Lender to
make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to Section 4.1
or 4.3 hereof (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 4.3 hereof, on such earlier date as such Lender
may specify to the Borrowers with a copy to the Agent) and, unless and until
such Lender gives notice as provided below that the circumstances specified in
Section 4.1 or 4.3 hereof that gave rise to such Conversion no longer exist:
(a) 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
(b) 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 Borrowers (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 4.4 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 Revolving
Credit Commitments.
4.5. Compensation. Upon the request of any Lender, UniCapital and the
Borrowers, jointly and severally, 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 incurred by it as a result of:
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(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 9.1) on a date other than
the last day of the Interest Period for such Loan; or
(b) any failure by any Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article V to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Rate 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.
4.6. Taxes. (a) Any and all payments by any Borrower to or for the
account of any Lender or the Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, adopted after the date hereof, excluding, in
the case of each Lender and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office) or the 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 "Taxes"). If any Borrower shall be required by
law to deduct any Taxes adopted after the date hereof from or in respect of any
sum payable under this Agreement or any other Loan Document to any Lender or the
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 4.6) such Lender or the Agent receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Borrower shall make such deductions, (iii) such Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) such Borrower shall furnish to the
Agent, at its address referred to in Section 11.2, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, UniCapital and the Borrowers agree, jointly and
severally, to pay 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 Loan Document or from the
execution or delivery of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) UniCapital and the Borrowers agree, jointly and severally, to
indemnify each Lender and the Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section 4.6) paid by such Lender
or the 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
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the case of each other Lender, and from time to time thereafter if requested in
writing by any Borrower or the Agent (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), shall provide the Borrowers and the
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 an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrowers and the Agent with the appropriate form pursuant to Section 4.6(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 4.6(a) or
4.6(b) with respect to Taxes imposed by the United States; provided, however,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, each Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(f) If UniCapital or any Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this Section 4.6, then such
Lender will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending 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 Taxes,
UniCapital or the applicable Borrower shall furnish to the Agent the original or
a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of
UniCapital or any Borrower hereunder, the agreements and obligations of
UniCapital and each Borrower contained in this Section 4.6 shall survive the
termination of the Revolving Credit Commitments and the payment in full of the
Loans.
(i) UniCapital has executed this Credit Agreement to indicate its
agreement to be bound by the terms of this Article IV, Sections 2.14, 7.15,
11.5, 11.9, and 11.16, and any other provision of this Agreement that is
applicable to UniCapital.
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ARTICLE V
Conditions to Making Loans
5.1. Conditions of Closing. The obligation of the Lenders to make the
Revolving Credit Facility available to any Borrower is subject to the conditions
precedent that:
(a) the Agent shall have received on the Closing Date, in form
and substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement,
the Notes, the initial Facility Guaranties, the initial
Security Instruments and the other Loan Documents, together
with all schedules and exhibits thereto;
(ii) the favorable written opinion or opinions with
respect to the Loan Documents and the transactions
contemplated thereby of special counsel to the Credit Parties
dated the Closing Date, addressed to the Agent (on behalf of
itself and the Lenders), substantially in the form of Exhibit
G-1 or otherwise reasonably satisfactory to special counsel to
the Agent;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of UniCapital and each Credit Party (or, in
the case of a Credit Party that is a trust, resolutions of the
appropriate board or committee of each trustee thereof)
certified by its secretary or assistant secretary as of the
Closing Date, approving and adopting the Loan Documents to be
executed by such Person, and authorizing the execution and
delivery thereof;
(iv) specimen signatures of officers of UniCapital
and each of the Credit Parties executing the Loan Documents on
behalf of UniCapital or such Credit Party, certified by the
secretary or assistant secretary of UniCapital or such Credit
Party;
(v) the Organizational Documents of UniCapital and
each of the Credit Parties and each of the trustees for each
UniCapital Subsidiary Trust certified as of a recent date by
the Secretary of State or comparable official of its
jurisdiction of organization (provided that the trust
agreement of a UniCapital Subsidiary Trust may be certified by
the secretary or assistant secretary of its Beneficial Owner);
(vi) Operating Documents of UniCapital and each of
the Credit Parties and each of the trustees for each
UniCapital Subsidiary Trust certified as of the Closing Date
as true and correct by its secretary or assistant secretary;
(vii) certificates issued as of a recent date by the
Secretaries of State or comparable officials of the respective
jurisdictions of formation of UniCapital and
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each of the Credit Parties (excluding UniCapital Subsidiary
Trusts, but including each trustee thereof) as to the due
existence and good standing of such Person;
(viii) appropriate certificates of qualification to
do business, good standing and, where appropriate, authority
to conduct business under assumed name, issued in respect of
UniCapital and each of the Credit Parties (excluding
UniCapital Subsidiary Trusts, but including each trustee
thereof) as of a recent date by the Secretary of State or
comparable official of each jurisdiction in which the failure
to be qualified to do business or authorized so to conduct
business could have a Material Adverse Effect;
(ix) notice of appointment of the initial Authorized
Representative(s);
(x) fully-executed Uniform Commercial Code financing
statements appropriate for filing in all places required by
applicable law to perfect the Liens of the Agent under the
Security Instruments as a first priority Lien as to items of
Collateral in which a security interest may be perfected by
the filing of financing statements, and such other documents
and/or evidence of other actions as may be necessary under
applicable law to perfect the Liens of the Agent under the
Security Instruments as a first priority Lien in and to such
other Collateral as the Agent may require, including without
limitation:
(1) the delivery by the Borrowers of all
stock certificates and other certificates, if any,
evidencing ownership of any Pledged Interests,
accompanied in each case by duly executed stock or
transfer powers (or other appropriate transfer
documents) in blank affixed thereto; and
(2) the delivery by the Borrowers of
"control agreements" that have been executed by the
respective issuers (and consented to by the
respective Credit Parties) with respect to any
uncertificated Pledged Interests; and
(xi) evidence that all fees payable by the Borrowers
on the Closing Date to the Agent, NMS and the Lenders have
been paid in full; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) there shall not have occurred or become known to
the Agent or the Lenders any event, condition, situation or
status since the date of the information contained in the pro
forma projections of UniCapital and its subsidiaries, giving
effect to the "Related Acquisition" (as defined in the
UniCapital Revolving Credit Agreement), for the fiscal years
ending December 31, 1998, 1999 and 2000, which has had or
could reasonably be expected to result in a Material Adverse
Effect;
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(ii) no litigation, action, suit, investigation or
other arbitral, administrative or judicial proceeding shall be
pending or threatened which could reasonably be likely to
result in a Material Adverse Effect; and
(iii) UniCapital and the Credit Parties shall have
received all approvals, consents and waivers, and shall have
made or given all necessary filings and notices as shall be
required to consummate the transactions contemplated hereby
without the occurrence of any default under, conflict with or
violation of (A) any applicable law, rule, regulation, order
or decree of any Governmental Authority or arbitral authority
or (B) any agreement, document or instrument to which any of
the Credit Parties is a party or by which any of them or their
properties is bound.
5.2. Conditions of Initial Advance. The obligation of the Lenders to
make the initial Advance under the Revolving Credit Facility is subject to the
conditions precedent that:
(a) each of the conditions to making the Revolving Credit
Facility available to the Borrowers, as set forth in Section 5.1, shall
have been satisfied on or prior to the date of the initial Advance;
(b) the representations and warranties of UniCapital and the
Credit Parties set forth in Article VI and in each of the other Loan
Documents shall be true and correct in all material respects on and as
of the date of such Advance, with the same effect as though such
representations and warranties had been made on and as of such date,
except to the extent that such representations and warranties expressly
relate to an earlier date;
(c) the Borrowing Affiliate with respect to such Advance shall
have executed and delivered to the Agent an Assumption Letter, and each
Borrower and the Agent shall have executed such Assumption Letter and
the Borrowing Affiliate shall have delivered to the Agent all other
agreements, instruments and documents required by such Assumption
Letter;
(d) the Borrowing Affiliate with respect to such Advance shall
have delivered to the Agent (i) Facility Guaranties fully executed by
any Beneficial Owner of such Borrowing Affiliate, by each Subsidiary of
any such Beneficial Owner (other than such Borrowing Affiliate), by
each Subsidiary of such Borrowing Affiliate and by the Applicable
Intermediary (if any); (ii) Pledge Agreements fully executed by the
appropriate pledgors, granting a security interest in all Pledged
Interests with respect to each such Beneficial Owner, such Borrowing
Affiliate, each Subsidiary of any Beneficial Owner, each Subsidiary of
such Borrowing Affiliate, and the Applicable Intermediary (if any);
(iii) Security Agreements fully executed by such Borrowing Affiliate,
any Beneficial Owner of such Borrowing Affiliate, each Subsidiary of
any Beneficial Owner, each Subsidiary of such Borrowing Affiliate, and
the Applicable Intermediary (if any); and (iv) Collateral Assignments
with respect to any Eligible Lease or Eligible Carrier Loan Document
fully
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executed by such Borrowing Affiliate, each Applicable Intermediary
(if any) and each Applicable Carrier;
(e) the Agent shall have received in form and substance
satisfactory to the Agent and the Lenders, the following:
(i) each of the documents and instruments (including
without limitation the opinions of counsel, the resolutions of boards
of directors or other appropriate governing bodies or committees, the
specimen signatures, officer's certificates, Organizational Documents,
Operating Documents, and governmental certificates of existence,
qualification, good standing and assumed name) required by Section 5.1
as if such Borrowing Affiliate had been a Borrowing Affiliate (and its
Beneficial Owner, their respective Subsidiaries and the Applicable
Intermediary (if any) had been in such positions) on the Closing Date,
provided that if UniCapital or any Non-SPE Credit Party has previously
delivered such opinions, resolutions, specimen signatures, officer's
certificates and governmental certificates in connection with the
Closing Date or an Advance, it shall not be required to re-submit any
such documents in connection with a subsequent Advance except to the
extent (1) the prior opinions or resolutions did not cover any
additional Loan Documents executed by UniCapital or Non-SPE Credit
Party in connection with such subsequent Advance, or (2) the specimen
signatures or officer's certificates are no longer accurate, or (3) any
Organizational Document or Operating Agreement has been amended,
modified or supplemented or there are any additional Organizational
Documents or Operating Agreements;
(ii) with respect to each Financed Aircraft registered in
the United States, and each Engine the Lien on which is recorded under
United States law, the favorable written opinion with respect to the
Loan Documents and the transactions contemplated thereby of FAA Counsel
dated the Closing Date, addressed to the Agent (on behalf of itself and
the Lenders), substantially in the form of Exhibit G-2 or otherwise
reasonably satisfactory to special counsel to the Agent;
(iii) with respect to every other Financed Aircraft or
Engine, the favorable written opinion with respect to the Loan
Documents and the transactions contemplated thereby of local counsel in
each Applicable Foreign Jurisdiction dated the Closing Date, addressed
to the Agent (on behalf of itself and the Lenders), substantially in
the form of Exhibit G-3 or otherwise reasonably satisfactory to special
counsel to the Agent;
(iv) certificates of insurance from qualified brokers of
aircraft insurance or other evidence satisfactory to the Agent,
evidencing all insurance required by the Loan Documents (including
without limitation all insurance required by Exhibit M with respect to
each Aircraft or Engine that is to be a Financed Aircraft or Engine);
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(v) an initial Borrowing Notice and, if elected by an
Authorized Representative, an Interest Rate Selection Notice;
(vi) a certificate of an Authorized Representative
containing computations of the Borrowing Base, demonstrating compliance
with the Concentration Restrictions and providing information about the
Financed Aircraft and Engines, in each case after giving effect to such
Advance and any related Financed Aircraft or Engine;
(vii) fully-executed Uniform Commercial Code financing
statements appropriate for filing in all places required by applicable
law to perfect the Liens of the Agent under the Security Instruments as
a first priority Lien as to items of Collateral in which a security
interest may be perfected by the filing of financing statements, and
such other documents and/or evidence of other actions as may be
necessary under applicable law to perfect the Liens of the Agent under
the Security Instruments as a first priority Lien in and to such other
Collateral as the Agent may require, including without limitation:
(1) the delivery by the Borrowers of all stock
certificates and other certificates, if any, evidencing
ownership of any Pledged Interests, accompanied in each
case by duly executed stock or transfer powers (or other
appropriate transfer documents) in blank affixed thereto;
and
(2) the delivery by the Borrowers of "control
agreements" that have been executed by the respective
issuers (and consented to by the respective Credit
Parties) with respect to any uncertificated Pledged
Interests;
(3) with respect to each Financed Aircraft or Engine
registered in the United States or the Lien on which is to
be recorded in the United States, evidence of the filing
with the FAA Recording Office of the Security Agreement
(and all supplements thereto) executed by the Applicable
Borrower and any Applicable Intermediary and all other
documents required by such office or applicable law in
order to maintain a first priority perfected Lien on such
Financed Aircraft or Engine, and the lease thereof or
Carrier Loan Documents with respect thereto;
(4) with respect to each other Financed Aircraft or
Engine, evidence of the filing with each applicable
recording office in each Applicable Foreign Jurisdiction
of all documents required by such office or any Applicable
Foreign Aviation Law in order to maintain a first priority
perfected Lien on such Financed Aircraft or Engine, and
the lease thereof or Carrier Loan Documents with respect
thereto;
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(5) a copy of the executed purchase agreement and
executed bill of sale evidencing the purchase by the
Initial Borrower or an Eligible Carrier of each Financed
Aircraft or Engine;
(6) copies of the certificates of aircraft
registration issued by the FAA and certificates of
airworthiness issued by the FAA, in each case with respect
to each Aircraft registered in the United States; and
(7) evidence of registration and other applicable
qualification issued by any Applicable Foreign
Jurisdiction to the extent such registration or
qualification is required by an Applicable Foreign
Aviation Law, in each case with respect to each Aircraft
not registered in the United States, and each Engine the
Lien on which is not to be recorded in the United States;
(viii) results of a search of Liens filed with the FAA or
any Applicable Foreign Jurisdiction with respect to any Aircraft or
Engine that is or is to be a Financed Aircraft or Engine under the
initial Advance;
(ix) two (2) Qualified Appraisals, each prepared by a
separate Qualified Appraiser and opining as to the Fair Market Value of
each Aircraft or Engine that is or is to be a Financed Aircraft or
Engine under the initial Advance;
(x) the fully-executed originals of the Eligible Lease or
Eligible Carrier Loan Documents relating to each Aircraft or Engine
that is or is to be a Financed Aircraft or Engine under the initial
Advance;
(xi) a Lessee Estoppel Certificate or other evidence
reasonably satisfactory to the Agent that any such Eligible Lease or
Eligible Carrier Loan Document is valid and binding; and
(xii) a fully-executed copy of the Management Agreement
certified by a Secretary or Assistant Secretary of the Initial
Borrower, and certification of the amount of fees to be payable to
UniCapital, CLA, Cauff Lippman or any Affiliate in connection with such
Management Agreement, which agreement and fees shall be acceptable to
the Agent in its sole reasonable discretion;
(f) at the time of (and after giving effect to) the initial
Advance, no Default or Event of Default specified in Article IX shall
have occurred and be continuing; and
(g) immediately after giving effect to the initial Advance;
(i) the aggregate principal balance of all outstanding
Revolving Loans for each Lender shall not exceed such Lender's
Revolving Credit Commitment;
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(ii) the Revolving Credit Outstandings shall not exceed
the lesser of the Borrowing Base or the Total Revolving Credit
Commitment; and
(iii) no Concentration Restriction shall be exceeded or
otherwise violated.
5.3. Conditions of Revolving Loans. The obligations of the Lenders to
make any Revolving Loans hereunder on or subsequent to the Closing Date are
subject to the satisfaction of the following conditions:
(a) the Agent shall have received (1) a Borrowing Notice if
required by Article II and (2) a certificate of an Authorized
Representative containing computations of the Borrowing Base,
demonstrating compliance with the Concentration Restrictions and
providing information about the Financed Aircraft and Engines, in each
case after giving effect to such Advance and any related Financed
Aircraft or Engine;
(b) the representations and warranties of the Credit Parties
set forth in Article VI and in each of the other Loan Documents shall
be true and correct in all material respects on and as of the date of
such Advance, with the same effect as though such representations and
warranties had been made on and as of such date, except to the extent
that such representations and warranties expressly relate to an earlier
date and except that (from the date that financial statements are
delivered to the Agent and the Lenders pursuant to Section 7.1) the
representation and warranty contained in Section 6.6(a) shall be deemed
to be a representation and warranty that the financial statements of
the Borrowers and their respective Subsidiaries most recently delivered
to the Agent and the Lender pursuant to Section 7.1 present fairly the
financial condition of such Borrowers and Subsidiaries as of the period
reported therein, all in conformity with GAAP applied on a Consistent
Basis;
(c) at the time of the initial Advance to any Borrowing
Affiliate, such Borrowing Affiliate (including the Borrower with
respect to such Advance) shall have executed and delivered to the Agent
an Assumption Letter, and each of the Borrowers and the Agent shall
have executed each such Assumption Letter;
(d) at the time of the initial Advance to any Borrowing
Affiliate, such Borrowing Affiliate shall have delivered to the Agent
(i) Facility Guaranties fully executed by each Beneficial Owner of such
Borrowing Affiliate, by each Subsidiary of any such Beneficial Owner
(other than such Borrowing Affiliate), by each Subsidiary of such
Borrowing Affiliate and by each Applicable Intermediary (if any); (ii)
Pledge Agreements fully executed by the appropriate pledgors, granting
a security interest in all Pledged Interests with respect to each such
Beneficial Owner, such Borrowing Affiliate, each Subsidiary of any such
Beneficial Owner, each Subsidiary of such Borrowing Affiliate, and each
Applicable Intermediary (if any); (iii) Security Agreements fully
executed by such Borrowing Affiliate, each Beneficial Owner of such
Borrowing Affiliate, each Subsidiary of any such Beneficial Owner, each
Subsidiary of each such Borrowing Affiliate, and each Applicable
Intermediary (if any); and (iv) Collateral Assignments with respect to
any
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Eligible Lease or Eligible Carrier Loan Document fully executed by
such Borrowing Affiliate, each Applicable Intermediary (if any) and
each Applicable Carrier;
(e) at the time of the initial Advance to any Borrowing
Affiliate, such Borrowing Affiliate (including the Borrower with
respect to such Advance) shall have delivered to the Agent all other
agreements, instruments and documents required by each such Assumption
Letter;
(f) without limiting the generality of the foregoing, the
Agent shall have received on or prior to the date of such Advance, each
of the documents and instruments required by Section 5.2 as if such
Borrowing Affiliate had been a Borrower at the time of the initial
Advance, and as if each Financed Aircraft or Engine financed by such
Advance had been financed by the initial Advance; and
(g) at the time of (and after giving effect to) each Advance,
no Default or Event of Default specified in Article IX shall have
occurred and be continuing; and
(h) immediately after giving effect to a Revolving Loan:
(i) the aggregate principal balance of all
outstanding Revolving Loans for each Lender shall not exceed
such Lender's Revolving Credit Commitment;
(ii) the Revolving Credit Outstandings shall not
exceed the lesser of the Borrowing Base or the Total Revolving
Credit Commitment; and
(iii) no Concentration Restriction shall be exceeded
or otherwise violated.
5.4. Appraisal Procedure. In order to determine the Fair Market Value
(and thus the Net Aircraft Value or Net Engine Value) of any Financed Aircraft
or Engine at the time of any Advance hereunder with respect to such Aircraft or
Engine, the Applicable Borrower and the Agent shall follow the following
procedure (an "Appraisal Procedure"): Prior to the date of such Advance, the
Applicable Borrower shall deliver to the Agent two (2) Qualified Appraisals of
such Aircraft or Engine, each prepared by a separate Qualified Appraiser and
dated as of a date reasonably close to the date of such Advance, and each
opining as to the Fair Market Value of such Aircraft or Engine. If both
appraisals state the same Fair Market Value, then such value shall be deemed to
be the Fair Market Value of such Aircraft or Engine at the time of such Advance;
and, for the purposes of this Agreement, the latest of such appraisals stating
the same value shall be referred to as the "Original Qualified Appraisal" for
such Aircraft or Engine. If the two appraisals do not state the same Fair Market
Value, then the lowest of the stated values shall be deemed to be the Fair
Market Value of such Aircraft or Engine at the time of such Advance; and the
appraisal stating such value shall be referred to as the "Original Qualified
Appraisal" for such Aircraft or Engine.
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ARTICLE VI
Representations and Warranties
Each Borrower represents and warrants with respect to itself, its
Subsidiaries (if any) and each other Credit Party (which representations and
warranties shall survive the delivery of the documents mentioned herein and the
making of Loans), that:
6.1. Organization and Authority.
(a) Each Borrower, each Subsidiary, each other Credit Party
and UniCapital is a trust, corporation, partnership or limited
liability company duly organized and validly existing under the laws of
the jurisdiction of its formation;
(b) Each Borrower, each Subsidiary, each other Credit Party
and UniCapital (x) has the requisite power and authority to own its
properties and assets and to carry on its business as now being
conducted and as contemplated in the Loan Documents, and (y) is
qualified to do business in every jurisdiction in which failure so to
qualify would have a Material Adverse Effect;
(c) Each Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) Each Credit Party (other than the Borrowers) and
UniCapital has the power and authority to execute, deliver and perform
each of the Loan Documents to which it is a party; and
(e) When executed and delivered, each of the Loan Documents to
which any Credit Party or UniCapital is a party will be the legal,
valid and binding obligation or agreement, as the case may be, of such
Credit Party or UniCapital (as the case may be), enforceable against
such Credit Party or UniCapital (as the case may be) in accordance with
its terms, subject to the effect of any applicable bankruptcy,
moratorium, insolvency, reorganization or other similar law 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);
6.2. Loan Documents. The execution, delivery and performance by each
Credit Party and UniCapital of each of the Loan Documents to which it is a
party:
(a) have been duly authorized by all requisite Organizational
Action of such Credit Party or UniCapital (as the case may be) required
for the lawful execution, delivery and performance thereof;
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(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority
binding on such Credit Party or UniCapital or their respective
properties, or (iii) the Organizational Documents or Operating
Documents of such Credit Party or UniCapital;
(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time or both, would constitute an event of default,
under any contract, indenture, agreement or other instrument or
document to which such Credit Party or UniCapital is a party, or by
which the properties or assets of such Credit Party or UniCapital are
bound; and
(d) does not and will not result in the creation or imposition
of any Lien upon any of the properties or assets of such Credit Party
or UniCapital or any Subsidiary except any Liens in favor of the Agent
and the Lenders created by the Security Instruments;
6.3. Solvency. At the time of each Advance to a Borrower, such Borrower
and each Beneficial Owner of such Borrower is Solvent after giving effect to the
transactions contemplated by the Loan Documents;
6.4. Subsidiaries and Stockholders. No Borrower or Guarantor has any
Subsidiaries, except that a Guarantor may have a beneficial interest in a
Borrower, and a Borrower may own an Eligible Intermediary;
6.5. Ownership Interests. No Borrower or Guarantor owns any interest in
any Person, except that a Guarantor may have a beneficial interest in a
Borrower, and a Borrower may own an Eligible Intermediary;
6.6. Financial Condition.
(a) The Initial Borrower has heretofore furnished to each
Lender a copy of the UniCapital Registration Statement which contains
(i) the unaudited pro forma combined balance sheet and related
statement of operations for UniCapital, Cauff Lippman and certain
affiliates thereof, NSJ and the other Founding Companies for the year
ended December 31, 1997, (ii) the audited balance sheet of UniCapital
at December 31, 1997, (iii) the audited combined balance sheet and
related statements of income, changes in equity and cash flows for
Cauff Lippman and certain affiliates thereof for the year ended
December 31, 1997, and (iv) the audited combined balance sheet and
related statements of operations, stockholders' equity and cash flows
for NSJ for the year ended December 31, 1997. Such balance sheets,
statements of operations and income and other financial statements
(including the notes thereto) present fairly the financial condition of
UniCapital, Cauff Lippman and NSJ as of the period reported therein,
all in conformity with GAAP;
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(b) (i) since the later of (A) December 31, 1997, or (B)
the date of the financial statements most recently
delivered pursuant to Section 7.1(a), there has been
no material adverse change in the (1) the business,
properties, prospects, operations or condition,
financial or otherwise, of the Borrowers and their
respective Subsidiaries (if any), taken as a whole,
(2) the ability of any Credit Party to pay or perform
its respective obligations, liabilities and
indebtedness under the Loan Documents as such payment
or performance becomes due in accordance with the
terms thereof, or (3) the rights, powers and remedies
of the Agent or any Lender under any Loan Document or
the validity, legality or enforceability thereof; and
(ii) during the period between December 31, 1997 and
the date of the financial statements first delivered
pursuant to Section 7.1(b), there has been no
material adverse change in the condition, financial
or otherwise, of CLA or NSJ, or in the businesses,
properties, performance, prospects or operations of
CLA or NSJ, nor have such businesses or properties
been materially adversely affected as a result of any
fire, explosion, earthquake, accident, strike,
lockout, combination of workers, flood, embargo or
act of God;
(c) except as set forth in the financial statements referred
to in Section 6.6(a) or (b) or permitted by Section 8.5, neither any
Borrower nor any Beneficial Owner or any Subsidiary has incurred, other
than in the ordinary course of business, any material Indebtedness,
Contingent Obligation or other commitment or liability which remains
outstanding or unsatisfied; and
(d) the Initial Borrower has heretofore furnished to each
Lender pro forma projections of UniCapital and its subsidiaries, giving
effect to the "Related Acquisition" (as defined in the UniCapital
Revolving Credit Agreement), for the fiscal years ending December 31,
1998, 1999 and 2000. Such projections were prepared by UniCapital in
good faith and based upon assumptions which the Initial Borrower
believes to have been reasonable as of the time of preparation thereof
and as of the Closing Date.
6.7. Title to Properties. (a) Each Borrower and each of its
Subsidiaries and each other Credit Party has good and marketable title to all
its real and personal properties, subject to no transfer restrictions or Liens
of any kind, except for the transfer restrictions and Liens described in
Schedule 6.7 and Permitted Liens; and
(b) each Non-SPE Credit Party has good and marketable title to
all Collateral under the Security Instruments to which it is a party, subject to
no transfer restrictions or Liens of any kind, except for the transfer
restrictions and Liens described in Schedule 6.7 and Permitted Liens;
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6.8. Taxes. Except as set forth in Schedule 6.8, each Borrower, each of
its Subsidiaries and each Credit Party (other than Non-SPE Credit Parties) has
filed or caused to be filed all federal, state and local tax returns (and each
Non-SPE Credit Party has filed or caused to be filed all federal and state
income tax returns and all other material federal, state and local tax returns)
in each case which are required to be filed by it and, except for taxes and
assessments being contested in good faith by appropriate proceedings diligently
conducted and against which reserves reflected in the financial statements
described in Section 6.6(a) (or the financial statements most recently delivered
pursuant to Section 7.1(a)) and satisfactory to the Borrowers' independent
certified public accountants have been established, have paid or caused to be
paid all taxes as shown on said returns or on any assessment received by it, to
the extent that such taxes have become due;
6.9. Other Agreements. No Credit Party nor any Subsidiary is
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions, which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which such Credit Party or any Subsidiary is
a party, which default has, or if not remedied within any applicable
grace period could reasonably be likely to have, a Material Adverse
Effect;
6.10. Litigation. Except as set forth in Schedule 6.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of any Borrower, threatened by or against any Borrower or any
Subsidiary or other Credit Party or affecting any Borrower or any Subsidiary or
other Credit Party or any properties or rights of any Borrower or any Subsidiary
or other Credit Party, which could reasonably be likely to have a Material
Adverse Effect;
6.11. Margin Stock. The proceeds of the borrowings made hereunder will
be used by the Borrowers only for the purposes expressly authorized herein. None
of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 224) of the Board. Neither any Borrower nor any
agent acting in its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange Act
of 1934, as amended, or the Securities Act of 1933, as amended, or any state
securities laws, in each case as in effect on the date hereof;
6.12. Investment Company. No Credit Party is an "investment company,"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as
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such terms are defined in the Investment Company Act of 1940, as amended (15
U.S.C. Section 80a-1, et seq.). The application of the proceeds of the Loans and
repayment thereof by each Borrower and the performance by each Borrower and the
other Credit Parties of the transactions contemplated by the Loan Documents will
not violate any provision of said Act, or any rule, regulation or order issued
by the Securities and Exchange Commission thereunder, in each case as in effect
on the date hereof;
6.13. Patents, Etc. Each Borrower and each other Credit Party (other
than a Non-SPE Credit Party) owns or has the right to use, under valid license
agreements or otherwise, all material patents, licenses, franchises, trademarks,
trademark rights, trade names, trade name rights, trade secrets and copyrights
necessary to or used in the conduct of its businesses as now conducted and as
contemplated by the Loan Documents, without known conflict with any patent,
license, franchise, trademark, trade secret, trade name, copyright, other
proprietary right of any other Person;
6.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of any Borrower or any other Credit Party in accordance with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to the
Agent in connection with the negotiation or preparation of the Loan Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it was
made, in order to make any such warranty, representation or statement contained
therein not misleading;
6.15. No Consents, Etc. Neither the respective businesses or properties
of the Credit Parties or any Subsidiary, nor any relationship among the Credit
Parties or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of any Credit Party as a
condition to the execution, delivery and performance of, or consummation of the
transactions contemplated by the Loan Documents, which, if not obtained or
effected, would be reasonably likely to have a Material Adverse Effect, or if
so, such consent, approval, authorization, filing, registration or qualification
has been duly obtained or effected, as the case may be;
6.16. Employee Benefit Plans.
(a) Neither any Guarantor nor any Borrower or any of their
respective Subsidiaries has or has ever had any Employee Benefit Plan,
any Multiemployer Plan or any Pension Plan, or any obligation to fund
any such plan;
(b) Each Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and
published interpretations thereunder and in compliance with all Foreign
Benefit Laws with respect to all Employee
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Benefit Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet
expired. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified, and each trust related to such plan
has been determined to be exempt under Section 501(a) of the Code. No
material liability has been incurred by any Borrower or any ERISA
Affiliate which remains unsatisfied for any taxes or penalties with
respect to any Employee Benefit Plan or any Multiemployer Plan;
(c) Neither any Borrower nor any ERISA Affiliate has (i)
engaged in a nonexempt prohibited transaction described in Section 4975
of the Code or Section 406 of ERISA affecting any of the Employee
Benefit Plans or the trusts created thereunder which could subject any
such Employee Benefit Plan or trust to a material tax or penalty on
prohibited transactions imposed under Internal Revenue Code Section
4975 or ERISA, (ii) incurred any accumulated funding deficiency with
respect to any Employee Benefit Plan, whether or not waived, or any
other liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and
unpaid, (iii) failed to make a required contribution or payment to a
Multiemployer Plan, or (iv) failed to make a required installment or
other required payment under Section 412 of the Code, Section 302 of
ERISA or the terms of such Employee Benefit Plan;
(d) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan, and neither any Borrower nor any ERISA Affiliate has incurred any
unpaid withdrawal liability with respect to any Multiemployer Plan;
(e) The present value of all vested accrued benefits under
each Employee Benefit Plan which is subject to Title IV of ERISA, 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 Plan
allocable to such benefits;
(f) To the best of each Borrower's knowledge, each Employee
Benefit Plan subject to Title IV of ERISA, maintained by any ERISA
Affiliate, has been administered in accordance with its terms in all
material respects and is in compliance in all material respects with
all applicable requirements of ERISA and other applicable laws,
regulations and rules;
(g) The consummation of the Loans and the issuance of the
Letters of Credit provided for herein will not involve any prohibited
transaction under ERISA which is not subject to a statutory or
administrative exemption; and
(h) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of any Borrower after
due inquiry, is threatened concerning or involving any Employee Benefit
Plan;
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6.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder;
6.18. Environmental Laws. Except as listed on Schedule 6.18, each
Borrower, each Guarantor and each Subsidiary is in compliance with all
applicable Environmental Laws and has been issued and currently maintains all
required federal, state and local permits, licenses, certificates and approvals.
Except as listed on Schedule 6.18, neither any Borrower, any Guarantor nor any
Subsidiary has been notified of any pending or threatened action, suit,
proceeding or investigation, and neither any Borrower, any Guarantor nor any
Subsidiary is aware of any facts, which (a) calls into question, or could
reasonably be expected to call into question, compliance by any Borrower, any
Guarantor or any Subsidiary with any Environmental Laws, (b) seeks, or could
reasonably be expected to form the basis of a meritorious proceeding, to
suspend, revoke or terminate any license, permit or approval necessary for the
operation of any Borrower's, any Guarantor's or any Subsidiary's business or
facilities or for the generation, handling, storage, treatment or disposal of
any Hazardous Materials, or (c) seeks to cause, or could reasonably be expected
to form the basis of a meritorious proceeding to cause, any property of any
Borrower, any Guarantor or any Subsidiary or other Credit Party to be subject to
any restrictions on ownership, use, occupancy or transferability under any
Environmental Law;
6.19. Employment Matters. No Borrower or Guarantor has or has ever had
any employee other than officers thereof; and
6.20. RICO. Neither any Borrower nor any Subsidiary is engaged in or
has engaged in any course of conduct that could subject any of their respective
properties to any Lien, seizure or other forfeiture under any criminal law,
racketeer influenced and corrupt organizations law, civil or criminal, or other
similar laws; and
6.21. Liens. The Agent (for itself and on behalf of the Lenders) has a
first priority perfected Lien (subject to Permitted Liens) on all Financed
Aircraft and Engines and all other Collateral under the Security Instruments.
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ARTICLE VII
Affirmative Covenants
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, each Borrower will, and where applicable will
cause each Guarantor and each Subsidiary (if any) to:
7.1. Financial Reports, Etc. (a) As soon as practical and in any event
within 90 days after the end of each Fiscal Year of the Borrowers, deliver or
cause to be delivered to the Agent and each Lender (i) consolidated balance
sheets of the Borrowers and their respective Subsidiaries as at the end of such
Fiscal Year, and the notes thereto (if any), and the related consolidated
statements of income, stockholders' equity and cash flows, and the respective
notes thereto (if any), for such Fiscal Year, setting forth comparative
financial statements for the preceding Fiscal Year, all prepared in accordance
with GAAP applied on a Consistent Basis, and accompanied by a certificate of an
Authorized Representative to the effect that such financial statements present
fairly the financial position of the Borrowers and their respective Subsidiaries
as of the end of such Fiscal Year and the results of their operations and the
changes in their financial position for such Fiscal Year, and (ii) a certificate
of an Authorized Representative demonstrating compliance with Section 8.1(a) and
the Concentration Restrictions, and providing information about the Financed
Aircraft and Engines, which certificate shall be in the form of Exhibit H;
(b) as soon as practical and in any event within 45 days after the end
of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent and each Lender (i) consolidated balance sheets of the
Borrowers and their respective Subsidiaries as at the end of such fiscal
quarter, and the related consolidated statements of income, stockholders' equity
and cash flows for such fiscal quarter and for the period from the beginning of
the then current Fiscal Year through the end of such reporting period, and
accompanied by a certificate of an Authorized Representative to the effect that
such financial statements present fairly the financial position of the Borrowers
and their respective Subsidiaries as of the end of such fiscal period and the
results of their operations and the changes in their financial position for such
fiscal period, and (ii) a certificate of an Authorized Representative containing
computations for such quarter comparable to that required pursuant to Section
7.1(a)(ii);
(c) together with each delivery of the financial statements required by
Section 7.1(a)(i), deliver to the Agent and each Lender a letter from the
independent certified accountants of UniCapital stating that in performing the
audit necessary to render an opinion on the financial statements of UniCapital
for such Fiscal Year, they obtained no knowledge of any Default or Event of
Default by any Borrower in the fulfillment of the terms and provisions of this
Agreement insofar as they relate to financial covenants (which at the date of
such statement remains uncured); or if the accountants have obtained knowledge
of such Default or Event of Default, a statement specifying the nature and
period of existence thereof;
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(d) as soon as practical and in any event within 20 days after the end
of each calendar month, deliver or cause to be delivered to the Agent and each
Lender a certificate of an Authorized Representative containing computations of
the Borrowing Base, demonstrating compliance with the Concentration Restrictions
and providing information about the Financed Aircraft and Engines, as of the end
of such month, which certificate shall be in the form of Exhibit S;
(e) promptly upon their becoming available to any Borrower, such
Borrower shall deliver to the Agent and each Lender a copy of (i) all regular or
special reports or effective registration statements which any Borrower, any
Guarantor or any Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, (ii) any proxy
statement distributed by any Borrower, any Guarantor or any Subsidiary to its
shareholders, bondholders or the financial community in general, and (iii) any
management letter or other report submitted to any Borrower, any Guarantor or
any Subsidiary by independent accountants in connection with any annual, interim
or special audit of any Borrower or any Subsidiary; and
(f) promptly, from time to time, deliver or cause to be delivered to
the Agent and each Lender such other information regarding any Borrower's, any
Guarantor's and any Subsidiary's operations, business affairs and financial
condition as the Agent or such Lender may reasonably request.
Subject to Section 11.15, the Agent and the Lenders are hereby
authorized to deliver a copy of any such financial or other information
delivered hereunder to the Lenders (or any affiliate of any Lender) or to the
Agent, to any Governmental Authority having jurisdiction over the Agent or any
of the Lenders pursuant to any written request therefor or in the ordinary
course of examination of loan files, or to any other Person who shall acquire or
consider the assignment of, or acquisition of any participation interest in, any
Obligation permitted by this Agreement;
7.2. Maintain Properties. Maintain or cause each Applicable Carrier to
maintain and make repairs to each Financed Aircraft or Engine in compliance with
the requirements set forth in Schedule 7.2 hereto; and each Borrower, Guarantor
and Subsidiary shall maintain all other properties necessary to its operations
in good working order and condition, make all needed repairs, replacements and
renewals to such other properties, and maintain free from Liens all trademarks,
trade names, patents, copyrights, trade secrets, know-how, and other
intellectual property and proprietary information (or adequate licenses
thereto), in each case as are reasonably necessary to conduct its business as
currently conducted or as contemplated hereby, all in accordance with customary
and prudent business practices;
7.3. Existence, Qualification, Etc. Except as otherwise expressly
permitted under Section 8.8, do or cause to be done all things necessary to
preserve and keep in full force and
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effect its existence and all material rights and franchises, and maintain its
license or qualification to do business as a foreign corporation and good
standing in each jurisdiction in which its ownership or lease of property or the
nature of its business makes such license or qualification necessary;
7.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien other than a
Permitted Lien against any of its properties;
7.5. Insurance. Maintain or cause to be maintained with respect to each
Financed Aircraft or Engine and all other Collateral the insurance described on
Exhibit M;
7.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions,
and set up on its books such reserves as may be required by GAAP with respect to
doubtful accounts and all taxes, assessments, charges, levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements;
7.7. Right of Inspection. Permit any Person designated by any Lender or
the Agent to visit and inspect any Aircraft, Engine, or any other property,
corporate book or financial report of any Borrower or any Subsidiary and to
discuss its affairs, finances and accounts with its principal officers and
independent certified public accountants; and cause each Eligible Carrier to
permit any Person designated by any Lender or any Agent to inspect any Financed
Aircraft or Engine, all at reasonable times, at reasonable intervals and with
reasonable prior notice , subject to any restriction on inspection contained in
an Eligible Lease or Eligible Carrier Loan Document with respect to such
Financed Aircraft or Engine, provided that notwithstanding any such lease or
Carrier Loan Document, (a) any Person designated by a Lender or the Agent may
inspect such Financed Aircraft or Engine at any reasonable time upon an event of
default under such lease or Carrier Loan Document, and (b) upon any Event of
Default, the Applicable Borrower will use its best efforts to cause the
Applicable Carrier (and any other Person) to permit any Person designated by a
Lender or the Agent to inspect such Financed Aircraft or Engine at any time;
7.8. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business;
7.9. Governmental Licenses. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents;
7.10. Covenants Extending to Other Persons. Cause each Guarantor and
each of their respective Subsidiaries (if any) to do with respect to itself, its
business and its assets, each of the things required of any Borrower in Sections
7.2 through 7.9, and 7.18 inclusive;
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7.11. Officer's Knowledge of Default. Upon any officer of any Guarantor
or any Borrower obtaining knowledge of any Default or Event of Default hereunder
or under any other obligation of any Borrower or any Subsidiary or other Credit
Party to any Lender, or any event, development or occurrence which could
reasonably be expected to have a Material Adverse Effect, cause such officer or
an Authorized Representative to promptly notify the Agent of the nature thereof,
the period of existence thereof, and what action such Borrower or such
Subsidiary or other Credit Party proposes to take with respect thereto;
7.12. Suits or Other Proceedings. Upon any officer of any Guarantor or
any Borrower obtaining knowledge of any action, suit, litigation, investigation,
or other proceeding being instituted or threatened against any Borrower or any
Subsidiary or other Credit Party, in any court or before any Governmental
Authority, or any attachment, levy, execution or other process being instituted
against any assets of any Borrower or any Subsidiary or other Credit Party,
making a claim or claims in an aggregate amount greater than $100,000 (or, in
the case of a Non-SPE Credit Party, greater than $2,000,000), in each case
exclusive of punitive damages, not otherwise covered by insurance or that would
otherwise be reasonably expected to have a Material Adverse Effect, promptly
deliver to the Agent written notice thereof stating the nature and status of
such action, suit, litigation, investigation, dispute, proceeding, levy,
execution or other process;
7.13. Notice of Environmental Complaint or Condition. Promptly provide
to the Agent true, accurate and complete copies of any and all notices,
complaints, orders, directives, claims or citations received by any Borrower,
any Guarantor or any Subsidiary relating to any (a) violation or alleged
violation by any Borrower, any Guarantor or any Subsidiary of any applicable
Environmental Law; (b) release or threatened release by any Borrower, any
Guarantor or any Subsidiary, or by any Person handling, transporting or
disposing of any Hazardous Material on behalf of any Borrower, any Guarantor or
any Subsidiary, or at any facility or property owned or leased or operated by
any Borrower, any Guarantor or any Subsidiary, of any Hazardous Material, except
where occurring legally pursuant to a permit or license; or (c) liability or
alleged liability of any Borrower, any Guarantor or any Subsidiary for the costs
of cleaning up, removing, remediating or responding to a release of Hazardous
Materials;
7.14. Environmental Compliance. If any Borrower, any Guarantor or any
Subsidiary shall receive any letter, notice, complaint, order, directive, claim
or citation alleging that any Borrower, any Guarantor or any Subsidiary has
violated any Environmental Law, has released any Hazardous Material, or is
liable for the costs of cleaning up, removing, remediating or responding to a
release of Hazardous Materials, any Borrower, any Guarantor and any Subsidiary
shall, within the time period permitted and to the extent required by the
applicable Environmental Law or the Governmental Authority responsible for
enforcing such Environmental Law, remove or remedy, or cause the applicable
Subsidiary to remove or remedy, such violation or release or satisfy such
liability;
7.15. Indemnification. Without limiting the generality of Section 11.9,
UniCapital and each Borrower hereby agrees jointly and severally to indemnify
and hold the Agent and the Lenders, and their respective officers, directors,
employees and agents, harmless from and against
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any and all claims, losses, penalties, liabilities, damages and expenses
(including assessment and cleanup costs and reasonable attorneys', consultants'
or other expert fees, expenses and disbursements) arising directly or indirectly
from, out of or by reason of (a) the violation of any Environmental Law by any
Borrower or any Subsidiary or with respect to any property owned, operated or
leased by any Borrower or any Subsidiary or (b) the handling, storage,
transportation, treatment, emission, release, discharge or disposal of any
Hazardous Materials by or on behalf of any Borrower or any Subsidiary, or on or
with respect to property owned or leased or operated by any Borrower or any
Subsidiary. The provisions of this Section 7.15 shall survive repayment of the
Obligations and expiration or termination of this Agreement;
7.16. Further Assurances. At the Borrowers' cost and expense, upon
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Agent to carry out more effectively the provisions and purposes of this
Agreement, the Security Instruments and the other Loan Documents;
7.17. Swap Agreements. The Borrowers shall maintain Swap Agreements in
an amount mutually agreed to by the Agent and the Borrowers;
7.18. Continued Operations. Subject to Section 8.16, continue at all
times to conduct its business and engage principally in the same line or lines
of business substantially as heretofore conducted;
7.19. Annual Appraisal of Aircraft and Leases. On or within 30 days
prior to each March 1 and December 1 of each year, deliver or cause to be
delivered to the Agent and each Lender a Qualified Appraisal dated as of a
recent date of each Financed Aircraft or Engine (other than any Aircraft or
Engine for which an Original Qualified Appraisal or subsequent Qualified
Appraisal pursuant to this Section 7.19 shall have been delivered to the Agent
not more than six (6) months prior to such March 1 or such December 1 (as the
case may be)). Such appraisal shall opine as to the Fair Market Value of each
such Financed Aircraft or Engine.
7.20. Annual Review of Eligible Carriers and Aircraft and Engine
Models. Permit the Agent to conduct, and cooperate with the Agent in conducting,
an annual review of each Schedule A Carrier, each Schedule B Carrier, each Rated
Carrier and each model of Aircraft or Engine listed on Exhibit L, such review to
be conducted during the 30 days prior to March 1 of each year. In the event that
the Agent reasonably determines that any such Schedule A Carrier, Schedule B
Carrier, Rated Carrier or Aircraft or Engine model is no longer acceptable for
the purposes of this Agreement, the Agent may amend Exhibit P, Exhibit Q,
Exhibit K or Exhibit L (as the case may be) to remove such carrier, Aircraft or
Engine from the respective Exhibit. Thereafter, any carrier, Aircraft or Engine
removed from such a list shall cease to qualify as a Schedule A Carrier,
Schedule B Carrier, Rated Carrier, Eligible Aircraft or Eligible Engine (as the
case may be), and the Borrowing Base, Eligible Aircraft Borrowing Bases and
Eligible Engine Borrowing Bases shall be reduced accordingly, provided that in
the event such removal and reduction require repayment of any Loan with respect
to any Financed Aircraft or Engine that (solely as a result of
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such removal) has ceased to be an Eligible Aircraft or Eligible Engine (or whose
Applicable Carrier has been changed from a Schedule A Carrier to a Schedule B
Carrier), the Applicable Borrower may repay such Loan on or before the then
applicable Stated Termination Date (without giving effect to any extension of
the Stated Termination Date that is effective after the date of such reduction).
In the event that the Agent reasonably determines that any carrier should be
added as a Schedule A Carrier, Schedule B Carrier or Rated Carrier (or that any
Eligible Carrier should be moved from one Exhibit to another), or that any
Aircraft or Engine model should be added to the list of permitted equipment, the
Agent may amend Exhibit P, Exhibit Q, Exhibit K or Exhibit L (as the case may
be) to add such carrier, Aircraft or Engine to the respective Exhibit.
Thereafter, any carrier, Aircraft or Engine added or moved to such a list shall
qualify as a Schedule A Carrier, Schedule B Carrier, Rated Carrier, Eligible
Aircraft or Eligible Engine (as the case may be), and the Borrowing Base,
Eligible Aircraft Borrowing Bases and Eligible Engine Borrowing Bases shall be
modified accordingly, provided that in the event such modification requires
repayment of any Loan with respect to any Financed Aircraft or Engine that
(solely as a result of such modification) has ceased to be an Eligible Aircraft
or Eligible Engine (or whose Applicable Carrier has been changed from a Schedule
A Carrier to a Schedule B Carrier), the Applicable Borrower may repay such Loan
on or before the then applicable Stated Termination Date (without giving effect
to any extension of the Stated Termination Date that is effective after the date
of such modification). The Borrowers may from time to time request a review of
Schedule A Carriers, Schedule B Carriers, Rated Carriers, Aircraft types or
Engine types and seek the consent of the Agent to the modification of Exhibits
P, Q, K or L (as the case may be) to add or move carriers or Aircraft or Engine
types, which consent the Agent may withhold in its sole discretion.
7.21. Maintenance of Aircraft and Engines; Other Covenants and
Restrictions; Non-Discrimination.
(a) Ensure that any lease or Carrier Loan Documents with
respect to any Financed Aircraft or Engine contain covenants and restrictions
regarding the maintenance, alteration, replacement, pooling, sublease and (in
the case of a lease) return of such Aircraft or Engine by the Applicable
Carrier, which covenants and restrictions satisfy the requirements of Schedule
7.21(a) hereto;
(b) Promptly and diligently take or cause to be taken all
steps which a prudent international aircraft lessor or financier would
reasonably take in light of all of the relevant circumstances to compel the
relevant Eligible Carrier to comply with the terms of any lease or Carrier Loan
Document, or, if applicable and the Applicable Borrower is entitled to do so, to
repossess the applicable Financed Aircraft or Engine (and, if a prudent
international aircraft lessor or financier would determine it necessary or
desirable, to de-register and export the same to a safe location) if any failure
to comply with such lease or Carrier Loan Document is not promptly remedied.
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7.22. Re-registration of Aircraft and Engines. Ensure that any lease or
Carrier Loan Documents with respect to any Aircraft or Engine contain covenants
and restrictions regarding re-registration of such Aircraft or Engine, which
covenants and restrictions satisfy the requirements of Schedule 7.22 hereto.
7.23. Manager. Ensure that the Manager continues to serve as manager
under the Management Agreement, including without limitation managing and
overseeing (i) the Borrowers' acquisition, financing and leasing of the Financed
Aircraft and Engines, and (ii) the Credit Parties' compliance with law and the
Loan Documents.
7.24. Maintenance and Other Reserves. Ensure that if any maintenance
reserve or other reserve with respect to any Financed Aircraft or Engine is
required to be deposited with, or for the benefit of, any Credit Party by any
Applicable Carrier or Applicable Intermediary pursuant to any lease, Carrier
Loan Document or otherwise, such reserve shall be maintained in an account at
NationsBank.
7.25. Employee Benefit Plans.
(a) (Without limiting the generality of Section 8.10(a)) with
reasonable promptness, and in any event within thirty (30) days
thereof, give notice to the Agent of (a) the establishment of any new
Pension Plan (which notice shall include a copy of such plan), (b) the
commencement of contributions to any Employee Benefit Plan to which any
Borrower or any of its ERISA Affiliates was not previously
contributing, (c) any material increase in the benefits of any existing
Employee Benefit Plan, (d) each funding waiver request filed with
respect to any Employee Benefit Plan and all communications received or
sent by any Borrower or any ERISA Affiliate with respect to such
request and (e) the failure of any Borrower or any ERISA Affiliate to
make a required installment or payment under Section 302 of ERISA or
Section 412 of the Code by the due date;
(b) (Without limiting the generality of Section 8.10(a))
promptly and in any event within fifteen (15) days of becoming aware of
the occurrence or forthcoming occurrence of any (a) Termination Event
or (b) nonexempt "prohibited transaction," as such term is defined in
Section 406 of ERISA or Section 4975 of the Code, in connection with
any Pension Plan or any trust created thereunder, deliver to the Agent
a notice specifying the nature thereof, what action any Borrower or any
ERISA Affiliate has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect
thereto; and
(c) (Without limiting the generality of Section 8.10(a)) with
reasonable promptness but in any event within fifteen (15) days for
purposes of clauses (a), (b) and (c), deliver to the Agent copies of
(a) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under
Section 401(a) of the Code, (b) all notices received by any Borrower or
any ERISA Affiliate of the PBGC's intent to terminate any Pension Plan
or to have a trustee appointed
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to administer any Pension Plan, (c) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by any
Borrower or any ERISA Affiliate with the Internal Revenue Service with
respect to each Pension Plan and (d) all notices received by any
Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor
concerning the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA. Each Borrower will notify the Agent in writing
within five (5) Business Days of such Borrower or any ERISA Affiliate
obtaining knowledge or reason to know that such Borrower or any ERISA
Affiliate has filed or intends to file a notice of intent to terminate
any Pension Plan under a distress termination within the meaning of
Section 4041(c) of ERISA.
7.26. Collection Account. The Borrowers shall maintain one or more
segregated deposit accounts with NationsBank (collectively, the "Collection
Account") for the purpose of depositing proceeds of leases and Carrier Loan
Documents (as described below). Each Borrower shall immediately deposit in the
Collection Account all proceeds (including without limitation rent) from any
lease of any Financed Aircraft or Engine and all proceeds (including without
limitation payments of principal and interest) from any Carrier Loan Documents
(collectively, the "Lease and Carrier Loan Proceeds"). Without limiting the
ability of any Borrower to distribute Lease and Carrier Loan Proceeds through
dividends, payment of expenses or otherwise, in each case subject to compliance
with the Loan Documents, so long as any Borrower owns any Lease and Carrier Loan
Proceeds, it shall maintain such proceeds in the Collection Account. The
Borrowers shall not permit any monies other than Lease and Carrier Loan Proceeds
to be deposited or maintained in the Collection Account.
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ARTICLE VIII
Negative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Required Lenders shall otherwise consent in writing, no Borrower will, nor will
it permit any Guarantor or any Subsidiary (if any) to:
8.1. EBITDA-to-Interest Ratio. Permit the Consolidated
EBITDA-to-Interest Ratio for the Borrowers and their respective Subsidiaries as
of the end of any Four-Quarter Period to be less than 1.75 to 1.00;
8.2. Acquisitions. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, except for Acquisition of a Subsidiary as
permitted by Section 8.7;
8.3. Capital Expenditures. Make or become committed to make any Capital
Expenditures, except for Capital Expenditures to maintain or purchase Eligible
Aircraft or Eligible Engines;
8.4. Liens. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to (a) any property or assets
now owned or hereafter acquired by any Borrower, any Guarantor or any Subsidiary
or (b) any Financed Aircraft or Engine, other than
(i) Liens created under the Security Instruments in favor of
the Agent and the Lenders; Liens created under the Carrier Loan
Documents in favor of the Applicable Borrower, which Liens have been
assigned to the Agent; and Liens arising under the Eligible Leases in
favor of the Applicable Intermediary (as lessor) or the Applicable
Borrower which Liens in each case have been assigned to the Agent;
(ii) Liens set forth in Schedule 6.7;
(iii) Liens imposed by law for taxes, assessments or charges
of any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings diligently
conducted, each of which Liens shall be fully bonded over, to the
reasonable satisfaction of the Agent;
(iv) statutory Liens of landlords and Liens of mechanics,
materialmen and other Liens imposed by law or created in the ordinary
course of business and (i) in existence less than 90 days from the date
of creation thereof for amounts not yet due or (ii) which are being
contested in good faith by appropriate proceedings diligently
conducted, which are inferior in respect of the Collateral to the Liens
conferred under the Security Instruments
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or have been fully bonded over to the reasonable satisfaction of the
Agent, and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
(v) Liens arising out of any judgment or award with respect to
which an appeal or proceeding for review is being prosecuted in good
faith by appropriate proceedings diligently conducted, and with respect
to which a stay of execution is in effect;
(vi) Liens created by the Applicable Carrier under an Eligible
Lease or Eligible Carrier Loan Documents, which Liens are created
without the knowledge of the Applicable Borrower and are released or
fully bonded over to the reasonable satisfaction of the Agent within 30
days after the Applicable Borrower has notice or knowledge of any such
Lien; and
(vii) Liens securing Indebtedness described in Section 8.5(b).
8.5. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness of any Borrower, any Guarantor or any Subsidiary, howsoever
evidenced, except:
(a) Indebtedness owing to (including guaranties in favor of)
the Agent or any Lender in connection with this Agreement, any Note or
other Loan Document;
(b) Indebtedness owing to (including guaranties in favor)
NationsBank, as agent, or any leader under the UniCapital Revolving
Loan Documents;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) Indebtedness arising from Swap Agreements permitted under
Section 7.17; and
(e) unsecured intercompany Indebtedness for loans and advances
made by UniCapital, CLA, Cauff Lippman or NSJ or any Beneficial Owner
to a Borrower or a Guarantor, provided that such intercompany
Indebtedness is evidenced by a promissory note or similar written
instrument acceptable to the Agent which provides that such
Indebtedness is subordinated to obligations, liabilities and
undertakings of the holder or owner thereof under the Loan Documents on
terms acceptable to the Agent;
8.6. Transfer of Assets. Sell, lease, transfer or otherwise dispose of
any assets of any Borrower, any Guarantor or any Subsidiary other than (a)
leases of Aircraft or Engines under Eligible Leases, (b) the sale of Eligible
Aircraft or Eligible Engines to Eligible Carriers in connection with Eligible
Carrier Loan Documents, or (c) sales of Aircraft or Engines, or sales of the
beneficial interest or ownership of a Beneficial Owner or a Borrower, provided
in each case that (i) the net proceeds of such sales are promptly applied in
accordance with Section 2.3(b), and
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(ii) at the time of any such sale the requirements of Section 2.14 for release
of the respective Borrower or Guarantor have been satisfied.
8.7. Subsidiaries; Investments. Own, create or permit to exist any
Subsidiary (except that a Guarantor may own beneficial interests in a Borrower
and a Borrower may own the Applicable Intermediary), or otherwise purchase, own,
invest in or otherwise acquire, directly or indirectly, any stock or other
securities, or make or permit to exist any interest whatsoever in any other
Person or permit to exist any loans or advances to any Person, other than loans
to Eligible Carriers evidenced by Eligible Carrier Loan Documents and loans
referred to in Section 8.5(e);
8.8. Merger or Consolidation. (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to merge into it, or (c) liquidate,
wind-up or dissolve or sell, transfer or lease or otherwise dispose of all or a
substantial part of its assets without the consent of the Agent, except as
permitted by Section 8.6 and except in the case of a Borrower or Guarantor that
simultaneously terminates its status as a Borrower or Guarantor hereunder in
accordance with Section 2.14.
8.9. Transactions with Affiliates. Other than transactions permitted
under Section 8.8, enter into any transaction after the Closing Date, including,
without limitation, the purchase, sale, lease or exchange of property, real or
personal, or the rendering of any service, with any Affiliate of any Borrower or
of any Guarantor, except (a) that such Persons may render services to a
Borrower, a Guarantor or their Subsidiaries for compensation at the same rates
generally paid by Persons engaged in the same or similar businesses for the same
or similar services, (b) that a Borrower, a Guarantor or any Subsidiary may
render services to such Persons for compensation at the same rates generally
charged by such Borrower, such Guarantor or such Subsidiary, (c) in either case
in the ordinary course of business and pursuant to the reasonable requirements
of a Borrower's (or a Guarantor's or any Subsidiary's) business consistent with
past practice of such Borrower or such Guarantor and its Subsidiaries and upon
fair and reasonable terms no less favorable to such Borrower (or such Guarantor
or any Subsidiary) than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate, and (d) subject to Section 8.19, the
Manager may render the services described in the Management Agreement for the
fees set forth therein;
8.10. Employee Benefit Plans; ERISA Affiliates; Employees.
(a) Have (i) any Employee Benefit Plan, any Multiemployer Plan
or any Pension Plan, or any obligation to fund any such plan, or (ii)
any employee other than officers thereof; or
(b) (without limiting the generality of Section 8.10(a)) with
respect to any Pension Plan, Employee Benefit Plan or Multiemployer
Plan:
(i) permit the occurrence of any Termination Event
which would result in a liability on the part of any Borrower
or any ERISA Affiliate to the PBGC; or
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(ii) permit the present value of all benefit
liabilities under all Pension Plans to exceed the current
value of the assets of such Pension Plans allocable to such
benefit liabilities; or
(iii) permit any accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Code)
with respect to any Pension Plan, whether or not waived; or
(iv) permit any ERISA Affiliate to fail to make any
contribution or payment to any Multiemployer Plan which such
ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining
thereto; or
(v) engage, or permit any Borrower or any ERISA
Affiliate to engage, in any prohibited transaction under
Section 406 of ERISA or Sections 4975 of the Code for which a
civil penalty pursuant to Section 502(I) of ERISA or a tax
pursuant to Section 4975 of the Code may be imposed; or
(vi) permit the establishment of any Employee Benefit
Plan providing post-retirement welfare benefits or establish
or amend any Employee Benefit Plan which establishment or
amendment could result in liability to any Borrower or any
ERISA Affiliate or any obligation of any Borrower to any
Multiemployer Plan or increase the obligation of any ERISA
Affiliate to a Multiemployer Plan; or
(vii) fail, or permit any Borrower or any ERISA
Affiliate to fail, to establish, maintain and operate each
Employee Benefit Plan in compliance in all material respects
with the provisions of ERISA, the Code, all applicable Foreign
Benefit Laws and all other applicable laws and the regulations
and interpretations thereof;
8.11. Fiscal Year. Change its Fiscal Year, or have any fiscal year
other than the Fiscal Year;
8.12. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a transaction
permitted pursuant to Section 8.8;
8.13. Change in Control. Cause, suffer or permit to exist or occur any
Change of Control;
8.14. Negative Pledge Clauses. Enter into or cause, suffer or permit to
exist any agreement with any Person other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents which prohibits or limits
the ability of any Borrower or any Subsidiary to create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues, whether now
owned or hereafter acquired; provided that any Eligible Lease or Eligible
Carrier
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Loan Document may contain such a prohibition or limitation so long as the
prohibition or limitation does not apply to any Lien granted in favor of the
Agent or any Lender pursuant to the Loan Documents;
8.15. Partnerships. Become a general partner in any general or limited
partnership;
8.16. Business and Operations. Engage in any business or operations
other than the ownership, financing and leasing of Aircraft or Engines, or the
making of loans to Eligible Carriers evidenced by Eligible Carrier Loan
Documents, or the ownership of a Borrower or Applicable Intermediary engaged in
such business or operations, or matters reasonably incidental thereto, or the
performance of the Loan Documents, provided, however, that no Borrower that owns
or is the Applicable Borrower with respect to any Aircraft may own or be the
Applicable Borrower with respect to any other Aircraft or any Engine (except
Engines relating to such Aircraft);
8.17. Ownership and Operation of Financed Aircraft and Engines.
(a) Permit any Person other than a Borrower or an Eligible
Carrier (or a Beneficial Owner solely by virtue of its beneficial
interest in the respective Borrower) to own beneficially or of record
any Financed Aircraft or Engine;
(b) Permit any Financed Aircraft or Engine to be leased,
subleased or chartered to any Person other than the Applicable Carrier
or the Applicable Intermediary, or to be operated by any Person other
than the Applicable Borrower or the Applicable Carrier, except in the
case of a lease or sublease by the Applicable Carrier if (i) the
Applicable Carrier remains fully liable for all of its obligations
under the Eligible Lease or Eligible Carrier Loan Documents with
respect to such Aircraft or Engines, (ii) the lease or sublease by such
Applicable Carrier is effected pursuant to a written agreement that
complies with applicable law, and such lease or sublease is a "true
lease" (and not a lease intended as security) under applicable
commercial law or applicable law relating to creditor's rights and
bankruptcy, (iii) the lease or sublease by such Applicable Carrier is
expressly subject and subordinate to the rights of the Applicable
Borrower under such Eligible Lease or Eligible Carrier Loan Documents,
and has a lease term that is no longer than the terms of such Eligible
Lease, (iv) the insurance required under this Agreement and the
Security Agreement shall be maintained with respect to such Aircraft or
Engine notwithstanding such lease or sublease, and (v) either (A) the
Agent has a first priority perfected Lien (subject only to Permitted
Liens) on such Aircraft or Engine or (B) the Applicable Borrower has a
first priority perfected Lien (subject only to Permitted Lines) on such
Aircraft or Engine, which Lien has been assigned to the Agent;
(c) Permit any Financed Aircraft or Engine to be leased to an
Eligible Carrier except under the terms of an Eligible Lease, or to be
owned by an Eligible Carrier except pursuant to, and subject to the
terms of, Eligible Carrier Loan Documents;
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(d) Permit any Financed Aircraft or Engine to be flown into or
located in any Restricted Country;
(e) Permit any Financed Aircraft or Engine to be flown into or
located in any country (or part thereof) designated by any insurance
company providing insurance with respect to such Aircraft or Engine as
a war zone, a recognized area of hostilities or an area threatened with
war or hostilities unless (in addition to any other insurance that may
be required by Section 11 of the Security Agreement or by clause (c) of
the definition of "Restricted Country") such Aircraft or Engine is
covered by hijacking (air piracy), governmental confiscation,
nationalization, expropriation and restraint insurance, in each case in
the amount (and with the provisions) required by Section 11 of the
Security Agreement (as if the Applicable Carrier were not a Rated
Carrier, except that a Rated Carrier may self-insure for such risks to
the extent permitted by (and subject to the overall limits on
self-insurance contained in) Section 11(c) of the Security Agreement).
8.18. Concentration Restrictions. Subject to Section 7.20, permit any
Concentration Restriction to be exceeded or otherwise violated;
8.19. Management Agreement and Fees.
(a) Amend, modify or supplement the Management Agreement in
any material respect without the consent of the Agent;
(b) Pay any management or other fee to UniCapital, CLA, Cauff
Lippman or any Affiliate other than as contemplated by the Management
Agreement; or
(c) Commit or permit any material breach of the Management
Agreement by any party thereto;
8.20. Representations re Agent and Lenders. Represent or hold out, or
permit any Applicable Carrier to represent or hold out, the Agent or any Lender
as (a) the owner of any Financed Aircraft or Engine, (b) carrying goods or
passengers on any such Financed Aircraft or Engine, or (c) being in any way
responsible for any operation of carriage (whether for hire or reward or
gratuitously) which may be undertaken by any Borrower, Guarantor, Subsidiary or
Applicable Carrier.
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ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment
of the principal of any Loan or other Obligation, when and as the same
shall be due and payable whether pursuant to any provision of Article
II, at maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment
of any amount of interest on any Loan or other Obligation or of any
fees or other amounts payable to any of the Lenders or the Agent within
three (3) Business Days after the date on which the same shall be due
and payable; or
(c) if default shall be made in the performance or observance
of any covenant set forth in Section 7.5, 7.11, 7.12, 7.19 or Article
VIII;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a), (b) or (c) above), or if a default shall be
made in the performance or observance of, or shall occur under, any
covenant, agreement or provision contained in any of the other Loan
Documents (beyond any applicable grace period, if any, contained
therein) or in any instrument or document evidencing or creating any
obligation, guaranty, or Lien in favor of the Agent or any of the
Lenders or delivered to the Agent or any of the Lenders in connection
with or pursuant to this Agreement or any of the Obligations, and such
default shall continue for 30 or more days after the earlier of receipt
of notice of such default to an Authorized Representative from the
Agent or an officer of any Borrower becomes aware of such default, or
if any Loan Document ceases to be in full force and effect (other than
by reason of any action by the Agent), or if without the written
consent of the Lenders, this Agreement or any other Loan Document shall
be disaffirmed or shall terminate, be terminable or be terminated or
become void or unenforceable for any reason whatsoever (other than in
accordance with its terms in the absence of default or by reason of any
action by the Lenders or the Agent); or
(e) if there shall occur (i) a default, which is not waived,
in the payment of any principal, interest, premium or other amount with
respect to any Indebtedness or Rate Hedging Obligation (other than the
Loans and other Obligations) of any Borrower or any Subsidiary, or (ii)
a 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 or Rate
Hedging Obligation may have been
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issued, created, assumed, guaranteed or secured by any Borrower or any
Subsidiary, or (iii) any other event of default as specified in any
agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by any Borrower or any Subsidiary, and
such default or event of default under clause (i), (ii) or (iii) above
shall continue for more than the period of grace, if any, therein
specified, or such default or event of default under clause (i), (ii)
or (iii) above 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
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report
or statement at any time furnished to the Agent or any Lender by or on
behalf of any Borrower or any other Credit Party pursuant to or in
connection with any Loan Document, or otherwise, shall be false or
misleading in any material respect when given; or
(g) if any Borrower, any Subsidiary or other Credit Party
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; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of any Borrower, any Subsidiary or other
Credit Party 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 any
Borrower, any Subsidiary or other Credit Party 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 any Borrower, any Subsidiary or other
Credit Party 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 any Borrower, any Subsidiary or other Credit Party
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 any Borrower, any Subsidiary or other Credit Party
takes any action to indicate its consent to or approval of any such
proceeding or petition; or
(i) if (i) one or more judgments or orders where the amount
not covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $10,000 is rendered against any Borrower or
any Subsidiary, or (ii) there is any attachment,
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injunction or execution against any of a Borrower's or Subsidiaries'
properties for any amount in excess of $10,000 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
(j) if any Borrower or any Subsidiary shall, other than in the
ordinary course of business (as determined by past practices), suspend
all or any part of its operations material to the conduct of the
business of any Borrower or such Subsidiary for a period of more than
60 days; or
(k) if there shall occur and not be waived an "Event of
Default" as defined in any of the other Loan Documents or in the
UniCapital Revolving Credit Agreement, the UniCapital TAA or the
UniCapital Securitization Loan Agreement; or
(l) if this Agreement or any other Loan Document shall for any
reason not be, or be asserted by any Borrower or any other Credit Party
or Subsidiary not to be, a legal, valid and binding obligation of any
Borrower or any Credit Party (as the case may be) enforceable in
accordance with its terms; or
(m) if any Lien of the Agent pursuant to any Loan Document
shall for any reason not be, or be asserted by any Borrower or any
other Credit Party or Subsidiary not to be, a valid, first priority
perfected Lien, subject to no other Liens except Permitted Liens;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,
(A) either or both of the following actions may be
taken: (i) the Agent, with the consent of the Required
Lenders, may, and at the direction of the Required Lenders
shall, declare any obligation of the Lenders to make further
Loans terminated, whereupon the obligation of each Lender to
make further Loans hereunder shall terminate immediately, and
(ii) the Agent shall at the direction of the Required Lenders,
at their option, declare by notice to the Borrowers any or all
of the Obligations to be immediately due and payable, and the
same, including all interest accrued thereon and all other
obligations of any Borrower to the Agent and the Lenders,
shall forthwith become immediately due and payable without
presentment, demand, protest, notice or other formality of any
kind, all of which are hereby expressly waived, anything
contained herein or in any instrument evidencing the
Obligations to the contrary notwithstanding; provided,
however, that notwithstanding the above, if there shall occur
an Event of Default under clause (g) or (h) above, then the
obligation of the Lenders to make Loans hereunder shall
automatically terminate and any and all of the Obligations
shall be immediately due and payable without the necessity of
any action by the Agent or the Required Lenders or notice to
the Agent or the Lenders;
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(B) each Borrower shall, upon demand of the Agent or
the Required Lenders, promptly cause to be performed at
Borrowers' expense by independent certified public accountants
acceptable to the Agent an audit of all Financed Aircraft and
Engines; and
(C) the Agent and each of the Lenders shall have all
of the rights and remedies available under the Loan Documents
or under any applicable law, including without limitation all
of the rights and remedies of a secured party under any
applicable Uniform Commercial Code, the FAA Act, the Mortgage
Convention or any Applicable Foreign Aviation Law.
9.2. Agent to Act. In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
9.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
9.4. No Waiver. No course of dealing between any Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
9.5. Allocation of Proceeds. If an Event of Default has occurred and
not been waived, and the maturity of the Loans has been accelerated pursuant to
Article IX hereof, all payments received by the Agent hereunder, in respect of
any principal of or interest on the Obligations or any other amounts payable by
any Borrower hereunder, shall be applied by the Agent in the following order:
(a) amounts due to the Lenders pursuant to Sections 2.10
and 11.5;
(b) amounts due to the Agent pursuant to Section 10.8;
(c) payments of interest on Loans, to be applied for the
ratable benefit of the Lenders;
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(d) payments of principal of Loans, to be applied for the
ratable benefit of the Lenders;
(e) amounts due to the Lenders pursuant to Sections 7.15 and
11.9;
(f) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the
Lenders;
(g) amounts due to any of the Lenders in respect of
Obligations consisting of liabilities under any Swap Agreement with any
of the Lenders on a pro rata basis according to the amounts owed; and
(h) any surplus remaining after application as provided for
herein, to any Borrower or otherwise as may be required by applicable
law.
9.6. Activities of Eligible Carriers. Notwithstanding anything
contained in this Agreement or any other Loan Document, the Credit Parties shall
not be deemed to be in breach of their respective obligations hereunder or
thereunder with respect to the care, maintenance, alteration, possession,
return, replacement, pooling, subleasing, use or operation of any Financed
Aircraft or Engine or any part thereof subject to an Eligible Lease or Eligible
Carrier Loan Documents by virtue of a default by the Applicable Carrier under
such Eligible Lease or Eligible Carrier Loan Documents so long as each of the
following conditions is satisfied:
(a) such default by the Applicable Carrier is not within the
control of any Credit Party,
(b) the Credit Parties are in compliance with Section 7.21,
(c) such default does not relate to any use or location of an
Aircraft or Engine in any Restricted Country, or any failure to make
any payment required by this Agreement or any other Loan Document when
due hereunder or thereunder, or any failure to maintain any insurance
required under this Agreement or any other Loan Document, or any
failure to maintain perfection of the Agent's Lien on any Collateral,
(d) within 60 days (or, if the Applicable Carrier is a U.S.
Carrier, 90 days) after any Credit Party has notice or knowledge of
such default (such 60 or 90-day period, as the case may be, being
referred to as the "Applicable Lease Cure Period"), such default is
completely cured or all conditions under Section 2.14 for the release
of the Applicable Borrower with respect to such Aircraft or Engine
(including without limitation all payments required under such Section
with respect to Loans, other Obligations, equity contributions and
other loans and interest) have been satisfied in full, and
(e) during the Applicable Lease Cure Period, the Applicable
Borrower shall not request or receive any Advance hereunder.
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ARTICLE X
The Agent
10.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 10.5 and
the first sentence of Section 10.6 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 Loan Document or any certificate or other
document referred to or provided for in, or received by any of them
under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or
any other document referred to or provided for therein or for any
failure by any Credit Party or any other 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 Credit Party or the satisfaction of any
condition or to inspect the property (including the books and records)
of any Credit Party or any of its Subsidiaries or affiliates;
(d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted
to be taken by it under or in connection with any Loan Document, except
for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
10.2. Reliance by Agent. The 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 Credit Party), independent accountants, and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until the Agent
receives and accepts an Assignment and
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Acceptance executed in accordance with Section 11.1 hereof. As to any matters
not expressly provided for by this Agreement, the 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 Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that the
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to any Loan Document 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.
10.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or a Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until the Agent shall have received such
directions, the 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.
10.4. Rights as Lender. With respect to its Revolving Credit Commitment
and the Loans made by it, NationsBank (and any successor acting as 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 Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. NationsBank
(and any successor acting as 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 Credit Party or any of its
Subsidiaries or affiliates as if it were not acting as Agent, and NationsBank
(and any successor acting as Agent) and its affiliates may accept fees and other
consideration from any Credit Party or any of its Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
10.5. Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under Section 11.9 hereof, but without limiting the
obligations of any Borrower under such Section) ratably in accordance with their
respective Revolving Credit 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 Agent
(including by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or any action taken or omitted
by the Agent under any Loan Document; 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 Agent promptly upon demand for
its ratable share of any costs or expenses
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payable by any Borrower under Section 11.5, to the extent that the Agent is not
promptly reimbursed for such costs and expenses by any Borrower. The agreements
contained in this Section 10.5 shall survive payment in full of the Loans and
all other amounts payable under this Agreement.
10.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Credit Parties and their Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the 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 Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the 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 any
Credit Party or any of its Subsidiaries or affiliates that may come into the
possession of the Agent or any of its affiliates.
10.7. Resignation of Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent, subject (so
long as no Default or Event of Default has occurred and is continuing) to the
written consent of an Authorized Representative, which consent shall not be
unreasonably withheld. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor 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 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 Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
X 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 Agent.
10.8. Fees. The Borrowers agree, jointly and severally, to pay to the
Agent, for its individual account, an annual Agent's fee as from time to time
agreed to by any Borrower and Agent in writing.
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ARTICLE XI
Miscellaneous
11.1. Assignments and Participations. (a) Each Lender may assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Loans,
its Note, and its Revolving Credit Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this Agreement,
any such partial assignment shall be in an amount at least equal to $5,000,000
or an integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under this
Agreement and the Note; and
(iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the form of
Exhibit B hereto, together with any Note subject to such assignment and a
processing fee of $3,500 (which amount shall not be payable by any Borrower).
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrowers shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrowers and the Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 4.6.
(b) The Agent shall maintain at its address referred to in Section 11.2
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Revolving Credit Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by any Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
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(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit B hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all
or a portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Revolving Credit Commitment or its
Loans); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article IV and the right of set-off contained in Section
11.3, and (iv) each Borrower shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of any Borrower relating to its Loans and its Note and to approve
any amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount of principal of
or the rate at which interest or fees are payable on such Loans or Note,
extending any scheduled principal payment date or date fixed for the payment of
interest on such Loans or Note, releasing all or substantially all of the
Collateral (except for a release of Collateral in accordance with Section 2.14),
releasing any Guarantor (except for a release of a Guarantor in accordance with
Section 2.14), or extending or increasing its Revolving Credit Commitment).
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans and
its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
(f) Any Lender may furnish any information concerning any Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 11.15.
11.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received), in the case
of notice by telegram, telefacsimile or telex, respectively (where the receipt
of such message is verified by return), or (iii) on the fifth Business Day after
the day on which mailed, if sent prepaid by certified or registered mail, return
receipt requested, in each case delivered, transmitted or mailed, as the case
may be, to the address, telex number or telefacsimile number, as appropriate,
set forth below or such other address or number as such party shall specify by
notice hereunder:
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(a) if to UniCapital or any Borrower:
to UniCapital or such Borrower
c/o UniCapital Corporation
10800 Biscayne Boulevard
Miami, Florida 33161
Attn: Treasurer
Telephone: (305) 899-5000
Telefacsimile: (305) 899-5050
with a copy to:
Cauff, Lippman Aviation, Inc.
9420 S.W. 77th Avenue
Miami, Florida 33156
Attn: Wayne Lippman
Telephone: (305) 274-7277
Telefacsimile: (305) 271-1339
and, if such Borrower is a UniCapital Subsidiary
Trust, a copy to:
First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attn: Corporate Trust Department
Telephone: (801) 246-5630
Telefacsimile: (801 246-5053
(b) if to the Agent:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: (704) 386-4220
Telefacsimile: (704) 386-9923
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with a copy to:
NationsBank, National Association
100 S.E. Second Street, 14th Floor
Miami, Florida 33131
Attention: Allison Freeland
Telephone: (305) 533-2421
Telefacsimile: (305) 533-2437
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance;
(d) if to any other Credit Party, at the address set
forth on the signature page of the Facility Guaranty
or Security Instrument executed by such Credit Party,
as the case may be.
11.3. Right of Set-off; Adjustments. (a) Upon the occurrence and during
the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its affiliates)
to or for the credit or the account of any Borrower against any and all of the
obligations of any Borrower now or hereafter existing under this Agreement and
the Note held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or such Note and although such obligations
may be unmatured. Each Lender agrees promptly to notify the applicable Borrower
after any such set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section 11.3 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, 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 owing to it, 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 owing to it, 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; provided, however, that if all or any portion of such excess payment or
benefits 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. Each Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 11.3 may, to
the
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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 Borrowers in the amount of such
participation.
11.4. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the execution and delivery to the Lenders of this Agreement and the Notes and
shall continue in full force and effect so long as any of Obligations remain
outstanding or any Lender has any Loan hereunder or any Borrower has continuing
obligations hereunder unless otherwise provided herein. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such party and all
covenants, provisions and agreements by or on behalf of any Borrower which are
contained in the Loan Documents shall inure to the benefit of the successors and
permitted assigns of the Lenders or any of them.
11.5. Expenses. UniCapital and each Borrower agrees, jointly and
severally, to pay on demand (subject, in the case of syndication, preparation,
execution, delivery and administration costs, to the Fee Letter), all costs and
expenses of the Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this
Agreement, the other Loan Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and expenses of
counsel for the Agent (excluding the cost of internal counsel) with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Loan Documents. UniCapital and each Borrower further
agrees, jointly and severally, to pay on demand all costs and expenses of the
Agent and the Lenders, if any (including, without limitation, reasonable
external attorneys' fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the Loan
Documents and the other documents to be delivered hereunder.
11.6. Amendments and Waivers. Any provision of this Agreement or any
other Loan Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrowers and the Required Lenders
(and, if Article X or the rights or duties of the Agent are affected thereby, by
the Agent); provided that no such amendment or waiver shall, unless signed by
all the Lenders, (i) increase the Revolving Credit Commitment of the Lenders,
(ii) reduce the principal of or rate of interest on any Loan or any fees or
other amounts payable hereunder, (iii) postpone any date fixed for the payment
of any scheduled installment of principal of or interest on any Loan or any fees
or other amounts payable hereunder or for termination of any Revolving Credit
Commitment, or (iv) change the percentage of the Revolving Credit Commitment or
of the unpaid principal amount of the Notes, or the number of Lenders, which
shall be required for the Lenders or any of them to take any action under this
Section 11.6 or any other provision of this Agreement or (v) release any
Guarantor or all or substantially all of the Collateral (except for a release of
a Guarantor or Collateral in accordance with Section 2.14);
No notice to or demand on any Borrower in any case shall entitle such
Borrower or any other Borrower to any other or further notice or demand in
similar or other circumstances, except as otherwise expressly provided herein.
No delay or omission on any Lender's or the Agent's part
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in exercising any right, remedy or option shall operate as a waiver of such or
any other right, remedy or option or of any Default or Event of Default.
11.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
11.8. Termination. The termination of this Agreement shall not affect
any rights of the Borrowers, the Lenders or the Agent or any obligation of the
Borrowers, the Lenders or the Agent, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Agent for the benefit of the
Lenders under the Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the Obligations
have been paid in full after the termination hereof (other than Obligations in
the nature of continuing indemnities or expense reimbursement obligations not
yet due and payable, which shall continue) or the Borrowers have furnished the
Lenders and the Agent with an indemnification satisfactory to the Agent and each
Lender with respect thereto. All representations, warranties, covenants, waivers
and agreements contained herein shall survive termination hereof until payment
in full of the Obligations unless otherwise provided herein. Notwithstanding the
foregoing, if after receipt of any payment of all or any part of the
Obligations, any Lender is for any reason compelled to surrender such payment to
any Person because such payment is determined to be void or voidable as a
preference, impermissible setoff, a diversion of trust funds or for any other
reason, this Agreement shall continue in full force and each Borrower, jointly
and severally, shall be liable to, and shall indemnify and hold the Agent or
such Lender harmless for, the amount of such payment surrendered until the Agent
or such Lender shall have been finally and irrevocably paid in full. The
provisions of the foregoing sentence shall be and remain effective
notwithstanding any contrary action which may have been taken by the Agent or
the Lenders in reliance upon such payment, and any such contrary action so taken
shall be without prejudice to the Agent or the Lenders' rights under this
Agreement and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.
11.9. Indemnification; Limitation of Liability. (a) UniCapital and each
Borrower, jointly and severally, agrees to indemnify and hold harmless the Agent
and each Lender and each of their affiliates and their respective officers,
directors, employees, agents, and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities, costs, and
expenses (including, without limitation, reasonable external attorneys' fees)
that may be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation, or
proceeding or preparation of defense in connection therewith) the Loan
Documents, any of the transactions contemplated herein, any Aircraft, Engine or
other Collateral, any possession, performance, transportation, management, sale,
ownership, registration, mortgage, charging, control, maintenance, service,
repair, design, testing, defect, overhaul,
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purchase, bearing, use or operation of any Aircraft, Engine or other Collateral,
or the actual or proposed use of the proceeds of the Loans, except to the extent
such claim, damage, loss, liability, cost, or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 11.9 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by UniCapital, any
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. UniCapital
and each Borrower agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to it, any of its
Subsidiaries, any Guarantor or any security holders or creditors thereof arising
out of, related to or in connection with the transactions contemplated herein,
except to the extent that such liability is found in a final non-appealable
judgment by a court of competent jurisdiction to have directly resulted from
such Indemnified Party's gross negligence or willful misconduct. UniCapital and
each Borrower agrees not to assert any claim against the Agent, any Lender, any
of their affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Loan Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.
(b) Without prejudice to the survival of any other agreement of
UniCapital or any Borrower hereunder, the agreements and obligations of
UniCapital and each Borrower contained in this Section 11.9 shall survive the
payment in full of the Loans and all other amounts payable under this Agreement.
(c) Except as expressly provided herein, each Lender, each Borrower and
the Agent agree that this Agreement and each other Loan Document entered into by
a Borrower is executed by a Qualified Trustee, not individually but solely as
Trustee under a Trust Agreement in the exercise of the power and authority
conferred and vested in it as such Trustee, that each and all of the
representations, undertakings and agreements by a Qualified Trustee, or for the
purpose or with the intention of binding a Qualified Trustee, are made and
intended for the purpose of binding only the Trust Estates (and, to the extent
any Lender, Borrower or Agent has an interest therein, any liability insurance
proceeds), and that in no case whatsoever shall any Qualified Trustee be
personally liable for any loss in respect of such representations, undertakings
and agreements, that nothing herein contained shall be construed as creating any
liability on any Qualified Trustee individually or personally, to perform any
covenant, either express or implied, herein, all such liability, if any, being
expressly waived by each Lender, each Borrower and the Agent and by each and
every Person now or hereafter claiming by, through or under such Persons except
with respect to the gross negligence or willful misconduct of such Qualified
Trustee, and that so far as any Qualified Trustee, individually or personally is
concerned, each Lender, each Borrower and the Agent and any Person claiming by,
through or under such Persons shall look solely to the Trust Estates (and, to
the extent any Lender, Borrower or Agent has an interest therein, any liability
insurance proceeds), for the performance of any obligation under this Credit
Agreement and the other Loan Documents. The term "Trustee" as used in this
Section 11.9(c)
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shall include any Qualified Trustee succeeding a Qualified Trustee, as trustee
under a Trust Agreement. Any obligation of any Borrower hereunder or under the
other Loan Documents may be performed by a Beneficial Owner, and any such
performance shall not be construed as revocation of the trust created by any
Trust Agreement.
11.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
11.11. Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, and other communications between or among the parties, both
oral and written, with respect thereto.
11.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
11.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes or this
Agreement, 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 any Note or this 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 had at all times been in effect. In addition, if when the Loans made
hereunder are repaid in full the total interest due hereunder (taking into
account the increase provided for above) is less than the total amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect, then to the extent
permitted by law, the Borrowers, jointly and severally, 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 Borrowers 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 applicable 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.
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11.14. Payments. All principal, interest, and other amounts to be paid
by any Borrower under this Agreement and the other Loan Documents shall be paid
to the Agent at the Principal Office in Dollars and in immediately available
funds, without setoff, deduction or counterclaim. Subject to the definition of
"Interest Period" herein, whenever any payment under this Agreement or any other
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time in such case shall be included in the computation of interest and fees,
as applicable, and as the case may be.
11.15. Confidentiality. The Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by any Borrower pursuant to this Agreement; provided that nothing herein
shall prevent any Lending Party from disclosing such information (a) to any
other Lending Party or any affiliate of any Lending Party, or any officer,
director, employee, agent, or advisor of any Lending Party or affiliate or any
Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) that is or becomes available to the public or that is or becomes available
to any Lending Party other than as a result of a disclosure by any Lending Party
prohibited by this Agreement, (g) in connection with any litigation to which
such Lending Party or any of its affiliates may be a party, (h) to the extent
necessary in connection with the exercise of any remedy under this Agreement or
any other Loan Document, and (i) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed participant or
assignee.
11.16. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN
THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE
GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.
(b) UNICAPITAL AND EACH BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT
SITTING IN THE COUNTY OF DADE, STATE OF FLORIDA, UNITED STATES OF
AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
UNICAPITAL AND EACH BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE EXERCISE OF
JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING, AND UNICAPITAL
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AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY
AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) UNICAPITAL AND EACH BORROWER AGREES THAT SERVICE OF
PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE
ADDRESS OF UNICAPITAL OR SUCH BORROWER PROVIDED IN SECTION 11.2, OR BY
ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN
EFFECT IN THE STATE OF FLORIDA.
(d) NOTHING CONTAINED IN SUBSECTIONS (a) OR (b) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
COURTS OF ANY JURISDICTION WHERE UNICAPITAL OR ANY BORROWER OR ANY OF
UNICAPITAL'S OR SUCH BORROWER'S PROPERTY OR ASSETS MAY BE FOUND OR
LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH
JURISDICTION, UNICAPITAL AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT
OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF
JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER COURT OR COURTS
WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, UNICAPITAL, THE
BORROWERS, THE AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY
WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON
MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
11.17. Intercreditor Agreement. The Agent and each Lender hereby
acknowledges and agrees to be bound by the terms of the Intercreditor Agreement.
[Signatures on following pages]
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, except as expressly
specified herein, but solely as
trustee, as the Initial Borrower
WITNESS:
By: /s/ Arge Paavlos
- - --------------------------------------- --------------------------------
Name: Arge Paavlos
- - --------------------------------------- Title:Assistant Trust Officer
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: /s/ Allison S. Freeland
-------------------------------
Name:Allison S. Freeland
Title: Senior Vice President
Signature Page 1
<PAGE> 110
NATIONSBANK, NATIONAL ASSOCIATION
By: /s/ Allison S. Freeland
----------------------------------
Name: Allison S. Freeland
Title: Senior Vice President
Lending Office for Base Rate Loans:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Mary Cardinale
Telephone: (704) 386-4220
Telefacsimile: (704) 386-9923
Wire Transfer Instructions:
NationsBank, National Association
ABA# 053000196
Account No.: 1366212250600
Reference: UniCapital
Attention: Corporate Credit Services
Lending Office for Eurodollar Rate Loans:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Mary Cardinale
Telephone: (704) 386-4220
Telefacsimile: (704) 386-9923
Wire Transfer Instructions:
NationsBank, National Association
ABA# 053000196
Account No.: 1366212250600
Reference: UniCapital
Attention: Corporate Credit Services
Signature Page 2
<PAGE> 111
UniCapital has caused this instrument to be made, executed and
delivered by its duly authorized officer as of the day and year first written
above, in order to indicate UniCapital's agreement to be bound by each of the
terms of the Credit Agreement that are applicable to UniCapital.
UNICAPITAL CORPORATION
WITNESS:
By: /s/ Daniel M. Chait
- - ----------------------------------- ---------------------------------
Name: Daniel M. Chait
Title: Vice President
Signature Page 3
<PAGE> 112
EXHIBIT A
Applicable Commitment Percentages
Applicable
Revolving Credit Commitment
Lender Commitment Percentage
- - ------ ---------- ----------
NationsBank, National
Association $300,000,000 100%
A-1
<PAGE> 113
EXHIBIT B
Form of Assignment and Acceptance
Reference is made to the Credit Agreement dated as of June 10, 1998 (as
amended, modified or restated from time to time, the "Credit Agreement") among
First Security Bank, National Association, as trustee (the "Initial Borrower"),
and certain Affiliates of the Initial Borrower designated as Borrowers
thereunder (the Initial Borrower and such Affiliates being referred to
collectively as the "Borrowers"), the Lenders (as defined in the Credit
Agreement) and NationsBank, National Association, as agent for the Lenders (the
"Agent"). Terms defined in the Credit Agreement are used herein with the same
meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, WITHOUT
RECOURSE and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Loan Documents. After
giving effect to such sale and assignment, the Assignee's Revolving Credit
Commitment and the amount of the Loans owing to the Assignee will be as set
forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Loan Documents or any other instrument or document furnished pursuant
thereto; and (iv) attaches the Note held by the Assignor and requests that the
Agent exchange such Note for new Notes payable to the order of the Assignee in
an amount equal to the Revolving Credit Commitment assumed by the Assignee
pursuant hereto and to the Assignor in an amount equal to the Revolving Credit
Commitment retained by the Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 7.1 thereof 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; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender 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; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to
B-1
<PAGE> 114
exercise such powers and discretion under the Credit Agreement as are delegated
to the Agent by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 4.6.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) 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.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of Florida.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
B-2
<PAGE> 115
Schedule 1
Percentage interest assigned: ________%
Assignee's Revolving Credit Commitment: $_______
Aggregate outstanding principal amount
of Revolving Loans assigned: $_______
Aggregate outstanding amount of
Term Loan assigned $_______
Principal amount of Note payable to Assignee: $_______
Principal amount of Note payable to Assignor: $_______
Effective Date (if other than date
of acceptance by Agent): *_______, 19__
[NAME OF ASSIGNOR], as Assignor
By:____________________________
Title:
Dated:___________ , 19 _
[NAME OF ASSIGNEE], as Assignee
By:____________________________
Title:
Domestic Lending Office:
Eurodollar Lending Office:
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
B-3
<PAGE> 116
Accepted [and Approved] **
this ___ day of ___________, 19 _
NATIONSBANK ___________, N.A.
By:_________________________________
Title:
[Approved this ____ day
of ____________, 19__
[INSERT NAMES OF ALL BORROWERS]
By: _________________________ ]**
Title: Authorized Representative
** Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".
B-4
<PAGE> 117
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized Representative
Reference is hereby made to the Credit Agreement dated as of June 10,
1998 (as amended, modified or restated from time to time, the "Agreement") among
First Security Bank, National Association, as trustee (the "Initial Borrower"),
and certain Affiliates of the Initial Borrower designated as Borrowers
thereunder (the Initial Borrower and such Affiliates being referred to
collectively as the "Borrowers"), the Lenders (as defined in the Agreement), and
NationsBank, National Association, as Agent for the Lenders ("Agent").
Capitalized terms used but not defined herein shall have the respective meanings
therefor set forth in the Agreement.
Each of the Borrowers hereby nominates, constitutes and appoints each
individual named below as an Authorized Representative for all of the Borrowers
under the Loan Documents, and hereby represents and warrants that (i) set forth
opposite each such individual's name is a true and correct statement of such
individual's office (to which such individual has been duly elected or
appointed), a genuine specimen signature of such individual and an address for
the giving of notice, and (ii) each such individual has been duly authorized by
each of the Borrowers to act as Authorized Representative under the Loan
Documents:
Name and Address Office Specimen Signature
_________________________ _________________________ __________________________
_________________________
_________________________
_________________________ _________________________ __________________________
_________________________
_________________________
The Borrowers hereby revoke (effective upon receipt hereof by the Agent) the
prior appointment of ________________ as an Authorized Representative.
This the ___ day of __________________, 19__.
[INSERT SIGNATURE BLOCK FOR
EACH BORROWER]
By:________________________________
Name:______________________________
Title:_____________________________
C-1
<PAGE> 118
EXHIBIT D
Form of Borrowing Notice
To: NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704)386-9923
Reference is hereby made to the Credit Agreement dated as of June 10,
1998 (as amended, modified or restated from time to time, the "Agreement") among
First Security Bank, National Association, as trustee (the "Initial Borrower"),
and certain Affiliates of the Initial Borrower designated as Borrowers
thereunder (the Initial Borrower and such Affiliates being referred to
collectively as the "Borrowers"), the Lenders (as defined in the Agreement), and
NationsBank, National Association, as Agent for the Lenders ("Agent").
Capitalized terms used but not defined herein shall have the respective meanings
therefor set forth in the Agreement.
The Borrowers through their Authorized Representative hereby give
notice to the Agent that Loans of the type and amount set forth below be made to
____________________ [INSERT NAME OF SPECIFIC BORROWER] (the "Applicable
Borrower") on the date indicated:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- - ----------- --------- --------- ---------------
<S> <C> <C> <C>
Revolving Loan
Base Rate Loan ______ _________ ____________
Eurodollar Rate Loan ______ _________ ____________
</TABLE>
- - -----------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months, or (if
available to all Lenders) one week.
(2) Must be at least $1,000,000.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
The Borrowers hereby request that the proceeds of Loans described in
this Borrowing Notice be made available to the Applicable Borrower as follows:
[insert transmittal instructions] _________ .
D-1
<PAGE> 119
The undersigned hereby certify that:
1. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and
2. All the representations and warranties set forth in Article VI of
the Agreement and in the Loan Documents (other than those expressly stated to
refer to a particular date) are true and correct as of the date hereof except
that the representation and warranty in Section 6.6(a) has the meaning stated in
Section 5.3(b), the reference to the financial statements in Section 6.6(a) of
the Agreement is to those financial statements of the Borrowers and their
respective Subsidiaries most recently delivered to you pursuant to Section 7.1
of the Agreement (it being understood that any financial statements delivered
pursuant to Section 7.1 have not been certified by independent public
accountants), and attached hereto are any changes to the Schedules referred to
in connection with such representations and warranties.
3. All conditions contained in the Agreement to the making of any Loan
requested hereby have been met or satisfied in full.
4. The proceeds of the Loans described in this Borrowing Notice will be
used solely to purchase the [Aircraft][Engine(s)] described on Exhibit 1
attached hereto, which [Aircraft][Engine(s)] will be titled in the name of [the
Applicable Borrower] [OR INSERT NAME OF ELIGIBLE CARRIER].
[INSERT NAMES OF ALL BORROWERS]
BY:_________________________________
Authorized Representative
DATE:_______________________________
D-2
<PAGE> 120
Exhibit 1
---------
Description of Aircraft/Engine
Registration
Jurisdiction and
Manufacturer's Registration Number
Make Model Serial Number (if applicable)
- - ---- ----- ------------- ---------------
D-3
<PAGE> 121
EXHIBIT E
Form of Interest Rate Selection Notice
To: NationsBank, National Association
(Carolinas), as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
Reference is hereby made to the Credit Agreement dated as of June 10,
1998 (as amended, modified or restated from time to time, the "Agreement") among
First Security Bank, National Association, as trustee (the "Initial Borrower"),
and certain Affiliates of the Initial Borrower designated as Borrowers
thereunder (the Initial Borrower and such Affiliates being referred to
collectively as the "Borrowers"), the Lenders (as defined in the Agreement), and
NationsBank, National Association, as Agent for the Lenders ("Agent").
Capitalized terms used but not defined herein shall have the respective meanings
therefor set forth in the Agreement.
Each of the Borrowers through their Authorized Representative hereby
give notice to the Agent of the following selection of a type of Loan or Segment
and Interest Period (with respect to Loans advanced to ____________________
[INSERT NAME OF SPECIFIC BORROWER]):
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- - ----------- --------- --------- ---------------
<S> <C> <C> <C>
Revolving Loan
- - --------------
Base Rate Loan ______ _________ ____________
Eurodollar Rate Loan ______ _________ ____________
Term Loan Segment
- - -----------------
Base Rate Segment ______ _________ ____________
Eurodollar Rate
Segment ______ _________ ____________]
</TABLE>
- - -----------------------
(1) For any Eurodollar Rate Loan or Segment, one, two, three or six months, or
(if available to all Lenders) one week.
(2) Must be at least $1,000,000.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan or
Eurodollar Rate Segment;
E-1
<PAGE> 122
[INSERT NAMES OF ALL BORROWERS]
BY:_________________________________
Authorized Representative
DATE:_______________________________
E-2
<PAGE> 123
EXHIBIT F
Form of Note
Promissory Note
$--------------
---------, --------------
______ __, 199_
FOR VALUE RECEIVED, each of FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity (except as expressly specified in
the Credit Agreement (defined below)) but solely as trustee (on behalf of that
certain trust created under the Trust Agreement dated as of June 10, 1998
between First Security Bank, National Association and Aircraft 11111, Inc.) (the
"Initial Borrower") and each BORROWING AFFILIATE from time to time party to an
Assumption Letter or the Agreement (defined below) (the Initial Borrower and
such Borrowing Affiliates being referred to collectively as the "Borrowers"),
hereby promises, jointly and severally, to pay to the order of
___________________________________ (the "Lender"), in its individual capacity,
at the office of NATIONSBANK, NATIONAL ASSOCIATION, as agent for the Lenders
(the "Agent"), located at One Independence Center, 101 North Tryon Street,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places
as the Agent may designate in writing) at the times set forth in the Credit
Agreement dated as of June 10, 1998 among the Initial Borrower, the Borrowing
Affiliates party thereto, the financial institutions party thereto
(collectively, the "Lenders") and the Agent (such agreement, as amended,
modified or restated from time to time being referred to collectively as the
"Agreement" -- all capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement), in lawful money of the United
States of America, in immediately available funds, the principal amount of
___________ DOLLARS ($__________) or, if less than such principal amount, the
aggregate unpaid principal amount of all Loans made by the Lender to the Initial
Borrower or any Borrowing Affiliate pursuant to the Agreement on the Revolving
Credit Termination Date or such earlier date as may be required pursuant to the
terms of the Agreement, and to pay interest from the date hereof on the unpaid
principal amount hereof, in like money, at said office, on the dates and at the
rates provided in Article II of the Agreement. All or any portion of the
principal amount of Loans may be prepaid or required to be prepaid as provided
in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest which shall be payable on demand at the
rates per annum set forth in the proviso to Section 2.2(a) of the Agreement.
Further, in the event of such acceleration, this Revolving Note shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by the Borrowers.
F-1
<PAGE> 124
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, each Borrower agrees, jointly and severally, to pay, in
addition to the principal and interest, all costs of collection, including
reasonable attorneys' fees, and interest due hereunder thereon at the rates set
forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Revolving Note is one of the Revolving Notes in the principal
amount of $300,000,000 referred to in the Agreement and is issued pursuant to
and entitled to the benefits and security of the Agreement to which reference is
hereby made for a more complete statement of the terms and conditions upon which
the Loans evidenced hereby were or are made and are to be repaid. This Revolving
Note is subject to certain restrictions on transfer or assignment as provided in
the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law the benefits of all provisions of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment be obtained
and execution issues against any other of them and returned satisfied or until
it can be shown that the maker or any other party hereto had no property
available for the satisfaction of the debt evidenced by this instrument, or
until any other proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this Revolving Note
any collateral deposited by any of said Persons as security. Protest, notice of
protest, notice of dishonor, diligence or any other formality are hereby waived
by all parties bound hereon.
F-2
<PAGE> 125
IN WITNESS WHEREOF, the Borrowers have caused this Revolving Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION not in its individual
capacity (except as expressly
specified in the Credit Agreement)
but solely as trustee, as Initial
Borrower
WITNESS:
__________________________________ By:_________________________________
Name:_______________________________
__________________________________ Title:______________________________
F-3
<PAGE> 126
EXHIBIT G-1
Form of Domestic Counsel Opinion
G-1-1
<PAGE> 127
Form of Opinion of Borrower's Counsel
June __, 1998
NationsBank, National Association,
as Agent and
Each of the Lenders Party to the
Credit Agreement Referenced Below
NationsBank Corporate Center
Charlotte, North Carolina 28255-0065
RE: $300,000,000 REVOLVING CREDIT FACILITY AMONG NATIONSBANK, NATIONAL
ASSOCIATION, AS AGENT, THE LENDERS PARTY THERETO AND
[____________________________] ("THE INITIAL BORROWER") AND CERTAIN
AFFILIATES OF UNICAPITAL CORPORATION DESIGNATED AS BORROWERS FROM TIME
TO TIME THEREUNDER (THE INITIAL BORROWER AND SUCH AFFILIATES BEING
COLLECTIVELY REFERRED TO HEREINAFTER AS THE "BORROWERS")
Ladies and Gentlemen:
We have acted as counsel to the [Initial] Borrower and the Guarantors
in connection with the Revolving Loan in the amount of $300,000,000 (the
"Revolving Loan") being made available to the Borrowers by you on this date
pursuant to the Credit Agreement of even date herewith among you, the Lenders
and the Initial Borrower (the "Credit Agreement"), and the other transactions
contemplated under the Credit Agreement.
This opinion is being delivered in accordance with the conditions set
forth in Section [5.1][5.2]5.3] of the Credit Agreement. All capitalized terms
not otherwise defined herein shall have the meanings provided therefor in the
Credit Agreement.
As such counsel, we have reviewed the following documents:
1. the Credit Agreement;
2. the Notes;
3. the Guaranty Agreement;
4. the Security Agreement;
5. the Pledge Agreements;
G-1-1
<PAGE> 128
6. the Collateral Assignments;
7. the Financing Statements (as hereinafter defined);
[8. the Trust Agreement.]
The documents described in items 1 through 7 immediately above are
referred to herein as the "Loan Documents".
For purposes of the opinions expressed below, we have assumed that all
natural persons executing the Loan Documents have legal capacity to do so; that
all signatures (other than those of representatives of the [Initial] Borrower
and the Guarantors on the Loan Documents) on all documents submitted to us are
genuine; that all documents submitted to us as originals (other than the Loan
Documents) are authentic; and that all documents submitted to us as certified
copies or photocopies conform to the originals of such documents, which
themselves are authentic.
In addition, for purposes of giving this opinion, we have examined such
corporate records of the [Initial] Borrower and the Guarantors, certificates of
public officials, certificates of appropriate officials of the [Initial]
Borrower and the Guarantors, and such other documents, and have made such
inquiries as we have deemed appropriate.
Based upon and subject to the foregoing, it is our opinion that:
[ 1. The [Initial] Borrower is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation and is duly
qualified to transact business as a foreign corporation and is in good standing
in all jurisdictions in which the nature of its business requires such
qualification. The [Initial] Borrower has full power and authority to own its
assets and conduct the businesses in which it is now engaged and as are
expressly contemplated by the Loan Documents, and has full corporate power and
authority to enter into each of the Loan Documents to which it is a party and to
perform its obligations thereunder.]
[ 2. Each of the Loan Documents to which the [Initial] Borrower is a party has
been duly authorized by the Board of Directors of the [Initial] Borrower (and by
any required beneficiary action), has been duly executed and delivered by the [
Initial] Borrower, and constitutes the legal, valid and binding obligation,
agreement, instrument or conveyance, as the case may be, of the [Initial]
Borrower, enforceable against such the [Borrower] in accordance with its
respective terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization and other similar laws
relating to or affecting creditors' rights generally and by the application of
general equitable principles (whether considered in proceedings at law or in
equity).]
3. Each Credit Party (other than the [Initial] Borrower) is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation and is duly qualified to transact business as a
foreign corporation and is in good standing in all jurisdictions in which the
nature of its business requires such qualification. Each Credit Party (other
than the [Initial] Borrower) has full corporate power and authority to own its
assets and conduct the businesses in
G-1-2
<PAGE> 129
which it is now engaged and as expressly contemplated by the Loan Documents, and
has full corporate power and authority to enter into each of the Loan Documents
to which it is a party and to perform its obligations thereunder.
4. Each of the Loan Documents to which each Credit Party (other than
the [Initial] Borrower) is a party has been duly authorized by the Board of
Directors of such Credit Party (and by any required shareholder action), has
been duly executed and delivered by such Credit Party, and constitutes the
legal, valid and binding obligation, agreement or instrument, as the case may
be, of such Credit Party, enforceable against such Credit Party in accordance
with its respective terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization and other similar laws
relating to or affecting creditors' rights generally and by the application of
general equitable principles (whether considered in proceedings at law or in
equity).
5. Neither the execution or delivery of, nor performance by [the
[Initial] Borrower or] any Guarantor or any other Credit Party of its
obligations under, the Loan Documents (a) does or will conflict with, violate or
constitute a breach of (i) the Organizational Documents or Operating Documents
of such [[Initial] Borrower or] Guarantor or other Credit Party, (ii) any laws,
rules or regulations applicable to the [[Initial] Borrower or] Guarantor or
other Credit Party, or (iii) any contract, agreement, indenture, lease,
instrument, other document, judgment, writ, determination, order, decree or
arbitral award to which the [[Initial] Borrower or] Guarantor or other Credit
Party is a party or by which the [[Initial] Borrower or] Guarantor or Credit
Party or any of their properties is bound, (b) requires the prior consent of,
notice to, license from or filing with any Governmental Authority which has not
been duly obtained or made on or prior to the date hereof, or (c) does or will
result in the creation or imposition of any lien, pledge, charge or encumbrance
of any nature upon or with respect to any of the properties of the [[Initial]
Borrower] or Guarantor or other Credit Property, except for the Liens in your
favor expressly created pursuant to the Loan Documents.
6. There is no pending or, to the best of our knowledge, threatened,
action, suit, investigation or proceeding (including, without limitation, any
action, suit, investigation, or proceeding under any environmental or labor
law), nor is there any basis therefor, before or by any court, or governmental
department, commission, board, bureau, instrumentality, agency or arbitral
authority, (i) which calls into question the validity or enforceability of any
of the Loan Documents, or the titles to their respective offices or authority of
any officers of [any of the [Initial] Borrower or] any Guarantor or any other
Credit Party or (ii) an adverse result in which would reasonably be likely to
have a Material Adverse Effect.
7. No [[Initial] Borrower nor any] Guarantor is subject to any charter,
bylaw or other corporate restrictions nor, to the best of our knowledge, is any
[[Initial] Borrower or any] Guarantor or any other Credit Party party to or
bound by any contract or agreement which (i) materially and adversely affects
its business, properties or condition (financial or otherwise), or (ii)
restricts, limits, or prohibits performance of any of their respective
obligations pursuant to the terms of the Loan Documents.
8. To the best of our knowledge after due inquiry, no [[Initial]
Borrower nor any] Guarantor nor any other Credit Party (i) is in default (which
default has not been waived) under any agreement, document or instrument to
which it is a party or by which it or any of its assets is bound
G-1-3
<PAGE> 130
or (ii) is in violation of any law, rule, regulation, judgment, writ,
determination, order, decree or arbitral award to which such [[Initial] Borrower
or] Guarantor or other Credit Party is a party or by which such [[Initial]
Borrower or] Guarantor or other Credit Party or any of their properties is
bound, which default or violation, as the case may be, would constitute a
Default or Event of Default under the Credit Agreement or otherwise could
reasonably be likely to have a Material Adverse Effect.
9. None of the transactions contemplated by the Credit Agreement,
including, without limitation, the use of the proceeds of the Loans provided for
in the Loan Documents, will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, any regulations issued pursuant
thereto, or regulations T, U or X of the Board of Governors of the Federal
Reserve System.
10. Once value has been given to the [Initial] Borrower by the Lenders
and assuming the Agent, for the benefit of the Lenders, has, [in the case of
uncertificated Pledged Interests, as more fully described on Schedule A hereto,
entered into the control agreements executed by the issuer and delivered to the
Agent, or in the case of certificated Pledged Interests] taken possession of the
certificates representing all of such Pledged Interests[, as more fully
described on Schedule A hereto,] and the stock powers related thereto, for value
in good faith and without notice of an adverse claim, so long as the Agent, for
the benefit of the Lenders, maintains continuous and uninterrupted possession of
the certificates representing the Pledged Interests, the Pledge Agreements [and
control agreements] will create a valid and perfected security interest in favor
of the Agent, for the benefit of the Lenders, in the Pledged Interests, subject
to no other security interest, lien or encumbrance or adverse claim (other than
restrictions on transfer imposed by applicable securities laws) and no filings
or recordations are necessary to perfect the security interests created by the
Pledge Agreements in the Pledged Interests. Such security interest will have
priority over any other consensual security interests in the Pledged Interests.
11. All of the shares of Pledged Interests are duly authorized, validly
issued, fully paid and nonassessable, and free of any preemptive rights. The
Certificates listed on Schedule A hereto are the sole evidence of the shares of
certificated Pledged Interests and have been duly delivered to you with an
appropriate stock power and assignment sufficient to permit the sale or transfer
of the Pledged Interests by you in accordance with the terms of the Pledge
Agreements, subject to applicable federal and state securities laws.
12. The Security Agreement and the Collateral Assignments are effective
to create a valid security interest in favor of the Agent for the benefit of the
Lenders in the Collateral described therein (other than Engines and Aircraft).
The Uniform Commercial Code Financing Statements on Form UCC-1 described on
Schedule A attached hereto (collectively, the "Financing Statements") have been
duly executed and delivered to the Agent and are in form, number and content
sufficient (together with the tender of necessary filing fees) for filing with
the respective filing offices described on Schedule A with the effect that, upon
such filing, the Agent shall have a duly perfected security interest in the
Collateral described in the Security Agreement and the Collateral Assignments to
the extent that a security interest in such Collateral can be perfected by the
filing of financing statements under the Uniform Commercial Code as in effect in
the appropriate jurisdictions.
THE FOLLOWING OPINIONS ARE REQUIRED WHEN THE BORROWER IS A TRUST.
G-1-4
<PAGE> 131
RE: TRUST AGREEMENT DATED AS OF ______ ___, 19__
Ladies and Gentlemen:
We have acted as special counsel for [First Security Bank of Utah, N.A., a
national association,] in its individual capacity [("FSB")] and in its capacity
as trustee (the "Owner Trustee") under the Trust Agreement dated as of _______
__, 19___ (the "Trust Agreement") by and among it, [FSB] and
_____________________(the "Beneficial Owner"), in connection with the execution
and delivery by the Owner Trustee of the Loan Documents to which it is a party.
Except as otherwise defined herein, the terms used herein shall have the
meanings set forth in Credit Agreement dated as of June ___, 1998 (the "Credit
Agreement") by and among [First Security Bank of Utah, N.A.], in its individual
capacity as expressly set forth therein and otherwise as Owner Trustee,
NationsBank, N.A., as Agent, and the Lenders party thereto.
We have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records and other instruments as we
have deemed necessary or advisable for the purpose of rendering this opinion.
Based upon the foregoing, we are of the opinion that:
13. [FSB] is a national banking association duly organized validly
existing and in good standing under the laws of United States of America, and
each of [FSB] and the Owner Trustee has, under the laws of the State of [Utah]
and federal banking law, the power and authority to enter into and perform its
obligations under the Trust Agreement and each other Loan Document to which it
is a party.
14. The Owner Trustee is the duly-appointed trustee under the Trust
Agreement.
15. The Trust Agreement has been duly authorized, executed and
delivered by one of the officers of [FSB] and, assuming due authorization,
execution and delivery by the Beneficial Owner, is a legal, valid and binding
obligation of the Owner Trustee (and to the extent set forth therein, against
[FSB]), enforceable against the Owner Trustee (and to the extent set forth
therein, against [FSB]) in accordance with its terms, and the Trust Agreement
creates under the laws of the State of [Utah] for the Beneficial Owner the
beneficial interest in the Trust Estate it purports to create and is a valid
trust under the laws of the State of [Utah].
16. The Loan Documents to which it is party have been duly authorized,
executed and delivered by [FSB], and, assuming due authorization, execution and
delivery by the other parties thereto, are legal, valid and binding obligations
of [FSB], enforceable against [FSB] in accordance with their respective terms.
17. The Loan Documents to which it is party have been duly authorized,
executed and delivered by the Owner Trustee, and, assuming due authorization,
execution and delivery by the other parties thereto, are legal, valid and
binding obligations of the Owner Trustee, enforceable against the
G-1-5
<PAGE> 132
Owner Trustee in accordance with their respective terms. The Notes have been
duly issued, executed and delivered by the Owner Trustee, pursuant to
authorization contained in the Trust Agreement.
18. The execution and delivery by each of [FSB] and the Owner Trustee
of the Trust Agreement and the Loan Documents to which it is a party, and
compliance by [FSB] or Owner Trustee, as the case may be, with all of the
provisions thereof do not and will not contravene any Laws applicable to or
binding on [FSB], or as Owner Trustee, or contravene the provisions of, or
constitute a default under, its charter documents or by-laws or, to our
knowledge after due inquiry, any indenture, mortgage contract or other agreement
or instrument to which [FSB] or Owner Trustee is a party or by which it or any
of its property may be bound or affected.
19. The execution and delivery of the Loan Documents by each of [FSB]
and the Owner Trustee and the performance by each of[ FSB] and the Owner Trustee
of their respective obligations thereunder does not require on or prior to the
date hereof the consent or approval of, the giving of notices to, the
registration or filing with, or the taking of any action in respect of any
Governmental Authority or any court.
20. There is no fee, tax or other governmental charge under the laws of
the State of Utah or any political subdivision thereof in existence on the date
hereof on, based on or measured by any payments under the Notes or the
beneficial interests in the Trust Estate, by reason of the creation of the trust
under the Trust Agreement pursuant to the laws of the State of [Utah] or the
Owner Trustee's performance of its duties under the Trust Agreement within the
State of [Utah].
21. Upon the filing of the financing statement on form UCC-l in the
form attached hereto as Exhibit A with the Division of Corporations and
Commercial Code, the Administrative Agent's security interest in the Trust
Estate, for the benefit of the lenders, will be perfected, to the extent that
such perfection is governed by Article 9 of the Uniform Commercial Code as in
effect in the State of [Utah] (the "[Utah] UCC").
Our opinions contained herein are rendered solely in connection with
the transactions contemplated under the Loan Documents and may not be relied
upon in any manner by any Person other than the addressees hereof, any successor
or assignee of any addressee (including successive assignees) and any Person who
shall acquire a participation interest in the interest of any Lender
(collectively, the "Reliance Parties"), or by any Reliance Party for any other
purpose. Our opinions herein shall not be quoted or otherwise included,
summarized or referred to in any publication or document, in whole or in part,
for any purposes whatsoever, or furnished to any Person other than a Reliance
Party (or a Person considering whether to become a Reliance Party), except as
may be required of any Reliance Party by applicable law or regulation or in
accordance with any auditing or oversight function or request of regulatory
agencies to which a Reliance Party is subject.
Very truly yours,
G-1-6
<PAGE> 133
SCHEDULE A to Opinion
[Financing Statements]
G-1-7
<PAGE> 134
EXHIBIT G-2
Form of Opinion of FAA Counsel
____________________, 19__
To the Addressees on
Schedule I Attached Hereto.
Re: NationsBank, National Association;
UniCapital Corporation/Aircraft; Credit
Facility
Our File Number: 5091.0003
Ladies & Gentlemen:
This opinion is rendered in connection with Article V, Section 5.2 or
5.3 (Conditions Precedent) of the Credit Agreement, dated as of June __, 19__
(the "Credit Agreement"), among __________________ and certain affiliates
thereof, as borrowers (the "Borrowers"), NationsBank, National Association, as
agent and as lender (the "Secured Party") and the Lenders (as that term is
defined in the Credit Agreement); and as required under Sections 2(b) and 9(c)
of the Security Agreement, dated as of ___________, 19___ (the "Security
Agreement"), between ___________________, as grantor (the "Debtor"), and the
Secured Party, providing for the financing of the following described aircraft
and engines:
AIRCRAFT
Serial U.S. Registration
Manufacturer Model Number Number
- - ------------ ----- ------ ------
_____________________ _______________ _____________ ______________________
hereafter referred to as the "Aircraft";
ENGINES
Serial
Manufacturer Model Number
- - ------------ ----- ------
_________________________ __________________________ _____________________
_________________________ __________________________ _____________________
hereafter referred to as the "Engines"; this opinion is rendered with respect to
matters arising under that portion of Section 40102 and Section 44101 through
Section 44112 of Title 49, United States Code, "Transportation" (the "Act"),
relating to the recordation of instruments and the registration of the Aircraft
pursuant to the Act.
G-2-1
<PAGE> 135
Except as otherwise defined herein, terms are used in this opinion as
they are defined in the Act.
This letter confirms that the following described instruments (the
"Instruments") were filed with the Federal Aviation Administration (the "FAA")
on _______ __, ____, at the Central ________ Times noted:
(1) [Release], dated ________ ___, ____ (the "Release") ,
executed by ______________, filed at ___: ___ __.m.;
(2) Aircraft Bill of Sale (FAA Form 8050-2), dated ___________
___, ____ (the"Bill of Sale") , between ___________, as
seller, and the Debtor, as purchaser, filed at ___: ___
___.m.;
(3) Aircraft Registration Application (FAA Form 8050-1), dated as
of _________ ___, ___ (the "Application"), executed by the
Debtor, filed at ___: ___ ___.m.
(4) Security Agreement, filed at ___:___ ___ .m.; and
(5) [Aircraft Lease Agreement], dated _________ ___, ____, between
the Debtor, as lessor, and _________, as lessee (the "Lessee")
with [Lease Supplement No. 1], dated ___________ ___, ____,
attached (collectively, the "Lease Agreement"), and with the
Assignment of Lease, dated ___________ ____, (the "Lease
Assignment") between the Debtor, as assignor, and Secured
Party, as assignee, attached and filed as one instrument, at
___: ___ ___ .m.
Based upon examination of the Instruments and the records maintained by
the FAA under the Act (the "Records") as deemed necessary to render this opinion
and as were made available, the undersigned is of the opinion that as of the
time of filing noted above:
(a) The Bill of Sale, Security Agreement, and the Lease
Agreement with Lease Assignment attached are in due
form for recording pursuant to the Act and have been
duly filed for recordation with the FAA pursuant to
the Act;
(b) The Aircraft is presently eligible for registration
with the FAA under the Act in the name of the Debtor,
the Aircraft Registration Application is in due form
and has been duly filed with the FAA, and the FAA is
required to register the Aircraft in the name of the
Debtor pursuant to the Act;
(c) The Debtor has valid legal title to the Aircraft, and
the Aircraft and the Engines are free of all liens
and encumbrances except those created by the Security
Agreement and the Lease Agreement, with Lease
Assignment attached;
(d) The filing of the Security Agreement for recordation
will, upon recordation, accord validity to the
Security Agreement in accordance with its terms, from
G-2-2
<PAGE> 136
the time of filing thereof as to all persons with
respect to the Aircraft and the Engines, thus
resulting in duly perfected first priority security
interests in favor of the Secured Party in the
Aircraft and the Engines;
(e) The filing of the Lease Agreement, with Lease
Assignment attached, for recordation will, upon
recordation, accord validity to the Lease Agreement,
from the time of filing thereof, as to all persons
with respect to the Aircraft and the Engines, thus
resulting in (i) the perfection of the rights of the
Debtor and the Lessee under the terms of the Lease
Agreement; and (ii) duly perfected assignment of all
right, title and interest of the Debtor in, to and
under the Lease Agreement under the terms of the
Lease Assignment (insofar as the assignment of an
interest in the Lease Agreement is an interest
covered by the recording system established by the
FAA pursuant to Section 44107 of the Act);
(f) Except for the filing of the Instruments, the
recording of the Bill of Sale, the Security
Agreement, and the Lease Agreement, with Lease
Assignment attached, and the registration of the
Aircraft, no further filing or recording, including
any filing or recording of any other document in any
other place within the United States, is necessary in
order to (i) establish and perfect the ownership
interests of the Debtor in the Aircraft, (ii)
establish and perfect the rights of the Debtor and
the Lessee in the Aircraft and the Engines, under the
terms of the Lease Agreement, and (iii) establish and
perfect the first priority security interests of the
Secured Party in the Aircraft, the Engines and the
Lease Agreement, under the terms of the Security
Agreement and the Lease Assignment (insofar as the
assignment of an interest in the Lease Agreement is
an interest covered by the recording system
established by the FAA pursuant to Section 44107 of
the Act), as against any third parties under the
applicable laws of any jurisdiction within the United
States; and
(g) Neither the execution, delivery and performance of
the Instruments by the parties thereto, nor the
consummation of any of the transactions contemplated
thereby, require the consent or approval of, or the
giving of notice to, or the registration of, or the
taking of any other action in respect of the FAA
under the Act and the regulations adopted thereunder,
except the filings specified elsewhere in this
opinion.
The opinions expressed herein are as to federal laws of the United
States only. Pursuant to Section 44108 of the Act, the validity of any
instrument, the recording of which is provided for by Section 44107 of the Act,
is subject to the laws of the State, the District of Columbia, or the territory
or possession of the United States at which the conveyance, lease or instrument
is delivered (the "Governing Laws"). The undersigned expresses no opinions as to
such Governing Laws and assumes the Instruments and the documents in the Records
are legally sufficient under such Governing Laws to create valid and enforceable
interests of the type they purport to create and to release or terminate those
interests which they purport to release or terminate. No opinion is expressed as
to times when the Aircraft and the Engines are outside the United States.
G-2-3
<PAGE> 137
Since the examination was limited to the Records, the opinion does not
cover liens which are perfected without the filing of notice thereof with the
FAA, such as federal tax liens or artisans' liens. The opinion is subject to the
accuracy of FAA personnel and contractors in the filing, indexing and recording
of the Records and in searching for cross-reference index cards for the Engines.
The opinion does not cover documents, if any, which may have been filed for
recordation but not listed upon the indices of Records available for examination
immediately prior to our examination for the purpose of this opinion.
The opinions as to title to the Aircraft and liens upon the Aircraft
and the Engines relate only to the time beginning with United States
registration, and not to times when the Aircraft may have been upon a foreign
aircraft registry.
The opinion relating to registration of the Aircraft is only as to its
current eligibility for registration and not with respect to events which may
occur in the future which may affect continued eligibility for registration. As
to matters of citizenship, the undersigned has relied upon representations made
in the Application. It is assumed the Aircraft is not registered under the laws
of any other country.
The undersigned has assumed that all documents are authentic and all
signatures are genuine and properly authorized.
This opinion is supplied to and may be relied upon by the entities to
whom it is addressed, solely for the purposes described herein.
Very truly yours,
DEBEE & GILCHRIST
Jack P. Gilchrist
G-2-4
<PAGE> 138
SCHEDULE I
to Opinion of _________ ____, ________
Re: NationsBank, National Association; UniCapital Corporation/Aircraft
Credit Facility; One ______ ___ Aircraft, Serial Number _________,
U.S. Registration Number _________; and Two (2) _____ _____ Engines,
Serial Numbers ____________ and _________;
Our File Number: 5091.003
NationsBank, National Association, as agent for the Lenders
NationsBank, National Association
The Lenders, as defined in the Credit Agreement
[other parties as requested]
G-2-5
<PAGE> 139
EXHIBIT G-3
Form of Foreign Counsel Opinion
1. Due organization, valid registration and existence, good standing, no filings
seeking dissolution, and qualification to transact business in the jurisdiction
of organization and other applicable jurisdictions with respect to the
Applicable Intermediary and any other Subsidiary;
2. Power and authority of Applicable Intermediary and any other Subsidiary to
enter into and perform its obligations under the Loan Documents and to transact
business as contemplated by the Loan Documents.
3. Due authorization, execution and delivery of the Loan Documents by the
Applicable Intermediary and any other Subsidiary.
4. Legality, validity, binding effect and enforceability of Loan Documents
(including without limitation the Security Agreement, Collateral Assignments,
other Security Instruments and Guaranty Agreements) against Applicable
Intermediary and any other Subsidiary.
5. Legality, validity, binding effect and enforceability of the Security
Agreement, Collateral Assignments, and other Security Instruments against the
Applicable Borrower.
6. No conflict with (i) Organizational Documents or Operating Documents of the
Applicable Intermediary or Subsidiary, (ii) applicable laws, rules or
regulations, or (iii) order, decree, or judgment of any court in applicable
jurisdiction known to counsel.
7. No consents, approvals, authorizations, orders, filings, recordations, or
registrations by or with any governmental authority of the Applicable Foreign
Jurisdiction (which have not been received) are necessary as a condition to the
effectiveness of the Loan Documents or to enable the parties thereto to enforce
their respective rights and perform their respective obligations thereunder.
8. It is not necessary for the Agent or the Lenders to register or qualify to do
business in such Applicable Foreign Jurisdiction (i) as a result of the
execution, delivery, and performance of the Loan Documents, or the filing and/or
recordation of the Loan Documents therein, or (ii) to exercise any rights or
remedies with respect to the Aircraft or Engine. The Agent and the Lenders will
not be deemed to be resident, domiciled or carrying on business in the
Applicable Foreign Jurisdiction solely by reason of the execution, delivery,
performance and enforcement of the Loan Documents.
9. The Applicable Carrier, Applicable Intercreditor and other Subsidiaries are
subject to suit in the courts of the Applicable Foreign Jurisdiction. The
Applicable Foreign Jurisdiction will enforce a judicial order or judgment
obtained by the Agent or the Lenders in the United States without another
hearing on or retrying the merits of such action in such Applicable Foreign
Jurisdiction
G-3-1
<PAGE> 140
subject to procedural and public policy requirements therein. Suit may be filed
and judgment given in United States currency in the courts of the Applicable
Foreign Jurisdiction. [If Applicable] [A judgment in United States currency
would, upon enforcement by the court, be converted to [specify local currency].]
10. [If Applicable] The Applicable Borrower's interest in (and the Agent's Lien
over) the Aircraft are registered in the public register of aircraft in the
Applicable Foreign Jurisdiction and such registrations are in full force and
effect.
11. On termination of the Lease, or upon an event of default under the Lease or
Carrier Loan Documents, Applicable Borrower would be entitled to (i) repossess
the Aircraft or Engine, (ii) deregister the Aircraft or Engine from the register
of Aircraft in the Applicable Foreign Jurisdiction, and (iii) export the
Aircraft from the Applicable Foreign Jurisdiction.
12. The Security Agreement, Collateral Assignment and other Security Instruments
create a valid first priority Lien over the Aircraft, Engines and other
Collateral in favor of the Agent and the Lenders. Such Lien is enforceable by
the Agent and the Lenders in the Applicable Foreign Jurisdiction, and is not
subject to the claims of any third party (other than Permitted Liens). No
additional filing, registration or payment of any additional registration tax,
stamp duty or other similar tax, duty or import is required under the laws of
the Applicable Foreign Jurisdiction to maintain the priority or enforceability
of the Lien of the Agent and Lenders over the Aircraft, Engine and other
Collateral.
13. Opinion regarding protection of rights of creditors under laws of the
Applicable Foreign Jurisdiction, including opinion regarding rights of
foreclosure on collateral and opinion regarding effect of bankruptcy (including
presence or absence of rights or restrictions similar to U.S.
Bankruptcy Code Section 362, 363, and 1110).
14. The Pledge Agreements create a valid, first priority lien over the pledged
interests of the Applicable Intermediary or other Subsidiary in favor of the
Agent and the Lenders. Such Lien is enforceable by the Agent and the Lenders in
the Applicable Foreign Jurisdiction, and is not subject to the claims of any
third party. No additional filing or registration is required under the laws of
the Applicable Foreign Jurisdiction to maintain the priority or enforceability
of the Lien of the Agent and the Lenders over the pledged interests in the
Applicable Intermediary or other Subsidiary. All pledged interests in the
Applicable Intermediary or other Subsidiaries are duly authorized, validly
issued, fully paid and nonassessable and free of any preemptive rights.
15. Execution, delivery and enforcement of the Loan Documents does not subject
the Lenders or the Agent to any registration tax, stamp duty, or other similar
tax, duty or impost.
16. The Loan Documents do not need to be notarized, legalized, apostilled or
consularized (except to the extent such action have already been completed) as a
condition to the legality, validity, filing, enforceability or admissibility in
evidence thereof in the Applicable Foreign Jurisdiction.
17. There is no withholding tax or other tax to be deducted from or payable with
respect to the Loan Documents.
G-3-2
<PAGE> 141
18. There is no applicable usury or interest limitation in the Applicable
Foreign Jurisdiction which will restrict the recovery of payments in accordance
with the Loan Documents.
19. The choice of Florida law to govern the Loan Documents and the consent to
the jurisdiction of Florida by the Applicable Borrower, the Applicable
Intermediary or other Subsidiary will be upheld in the courts of the Applicable
Foreign Jurisdiction.
G-3-3
<PAGE> 142
EXHIBIT G-4
Form of Post-Funding FAA Counsel Opinion
Post Closing Opinion
To the Addressees on
Schedule I Attached Hereto.
Re: NationsBank, National Association;
UniCapital Corporation/Aircraft; Credit
Facility
Our File Number: 5091.0003
Ladies & Gentlemen:
This opinion is rendered in connection with Article V, Section 5.2 or
5.3 (Conditions Precedent) of the Credit Agreement, dated as of _________ __,
19__ (the "Credit Agreement"), among __________________ and certain affiliates
thereof, as borrowers (the "Borrowers"), NationsBank, National Association, as
agent and as lender (the "Secured Party") and the Lenders (as that term is
defined in the Credit Agreement); and as required under Sections 2(b) and 9(c)
of the Security Agreement, dated as of ___________, 19___ (the "Security
Agreement"), between ___________________, as grantor (the "Debtor"), and the
Secured Party, providing for the financing of the following described aircraft
and engines:
AIRCRAFT
Serial U.S. Registration
Manufacturer Model Number Number
- - ------------ ----- ------ ------
_____________________ _______________ _____________ ______________________
hereafter referred to as the "Aircraft";
ENGINES
Serial
Manufacturer Model Number
- - ------------ ----- ------
_________________________ __________________________ _____________________
_________________________ __________________________ _____________________
hereafter referred to as the "Engines"; this opinion is rendered with respect to
matters arising under that portion of Section 40102 and Section 44101 through
Section 44112 of Title 49, United States Code, "Transportation" (the "Act"),
relating to the recordation of instruments and the registration of the Aircraft
pursuant to the Act.
Except as otherwise defined herein, terms are used in this opinion as
they are defined in the Act.
G-4-1
<PAGE> 143
This letter confirms that the following described instruments (the
"Instruments") were recorded by the Federal Aviation Administration (the "FAA")
on ________ __, ____, and assigned the FAA conveyance numbers noted below:
(1) [Release], dated ________ __, ____, ______ (the "Release"),
executed by ____________________, assigned conveyance number
__________;
(2) Aircraft Bill of sale (FAA Form 8050-2), dated ________ __,
____ (the "Bill of Sale"), between ____________________, as
seller, and the Debtor, as purchaser, assigned conveyance
number __________;
(3) Security Agreement, assigned conveyance number __________; and
(4) [Aircraft Lease Agreement], dated ________ __, ____, between
the Debtor, as lessor, and ____________________, as lessee
(the "Lessee") with [Lease Supplement No. 1], dated ________
__, ____, attached (collectively, the "Lease Agreement"), and
with the Assignment of Lease, dated _________ __, ____ (the
"Lease Assignment"), between the Debtor, as assignor, and
Secured Party, as assignee, attached and recorded as one
instrument assigned conveyance number __________.
Based upon examination of the Instruments and the records maintained by
the FAA under the Act (the "Records") as deemed necessary to render this opinion
and as were made available, the undersigned is of the opinion that:
(a) The Bill of Sale, the Security Agreement, and the Lease
Agreement with Lease Assignment attached have been duly
recorded pursuant to the Act and are maintained in the Records
relating to the Aircraft, and the FAA computer, collateral
indices relating to the Engines duly note the Security
Agreement and the Lease Agreement;
(b) The Aircraft is presently registered with the FAA in the name
of the Debtor, pursuant to the Act;
(c) The Debtor has valid legal title to the Aircraft, and the
Aircraft and the Engines are free of all liens and
encumbrances except those created by the Security Agreement
and the Lease Agreement, with Lease Assignment attached;
(d) The recordation of the Security Agreement accords validity to
the Security Agreement in accordance with its terms, from the
time of filing thereof, as to all persons with respect to the
Aircraft and the Engines, thus resulting in duly perfected
first priority security interests in favor of the Secured
Party in the Aircraft and the Engines;
(e) The recording of the Lease Agreement, with Lease Assignment
attached, accords validity to the Lease Agreement, from the
time of filing thereof, as to all persons with respect to the
Aircraft and the Engines, thus resulting in (i) the perfection
of the rights of the Debtor and the Lessee under the terms of
the Lease Agreement; and (ii) duly
G-4-2
<PAGE> 144
perfected assignment of all right, title and interest of the
Debtor in, to and under the Lease Agreement under the terms of
the Lease Assignment (insofar as the assignment of an interest
in the Lease Agreement is an interest covered by the recording
system established by the FAA pursuant to Section 44107 of the
Act);
(f) Except for the filing of the Instruments, the recording of
the Bill of Sale, the Security Agreement, and the Lease
Agreement, with Lease Assignment attached, and the
registration of the Aircraft, as confirmed above, no further
filing or recording, including any filing or recording of any
other document in any other place within the United States, is
necessary in order to (i) establish and perfect the rights of
the Debtor in the Aircraft, (ii) establish and perfect the
rights of the Debtor and the Lessee in the Aircraft and the
Engines, under the terms of the Lease Agreement, and (iii)
establish and perfect the first priority security interests of
the Secured Party in the Aircraft, the Engines and the Lease
Agreement, under the terms of the Security Agreement and the
Lease Assignment (insofar as the assignment of an interest in
the Lease Agreement is an interest covered by the recording
system established by the FAA pursuant to Section 44107 of the
Act), as against any third parties under the applicable laws
of any jurisdiction within the Untied States; and
(g) Neither the execution, delivery and performance of the
Instruments by the parties thereto, nor the consummation of
any of the transactions contemplated thereby, require the
consent or approval of, or the giving of notice to, or the
registration of, or the taking of any other action in respect
of the FAA under the Act and the regulations adopted
thereunder, except the filings specified elsewhere in this
opinion.
The opinions expressed herein are as to federal laws of the United
States only. Pursuant to Section 44108 of the Act, the validity of any
instrument, the recording of which is provided for by Section 44107 of the Act,
is subject to the laws of the State, the District of Columbia, or the territory
or possession of the Untied States at which the conveyance, lease or instrument
is delivered (the "Governing Laws"). The undersigned expresses no opinions as to
such Governing Laws and assumes the Instruments and the documents in the Records
are legally sufficient under such Governing Laws to create valid and enforceable
interests of the type they purport to create and to release or terminate those
interests which they purport to release or terminate. No opinion is expressed as
to times when the Aircraft and the Engines are outside the United States.
Since the examination was limited to the Records, the opinion does not
cover liens which are perfected without the filing of notice thereof with the
FAA, such as federal tax liens or artisans' liens. The opinion is subject to the
accuracy of FAA personnel and contractors in the filing, indexing and recording
of the Records and in searching for cross-reference index cards for the Engines.
The opinion does not cover documents, if any, which may have been filed for
recordation but not listed upon the indices of Records available for examination
immediately prior to our examination for the purpose of this opinion.
The opinions as to title to the Aircraft and liens upon the Aircraft
and the Engines relate only to the time beginning with United States
registration, and not to times when the Aircraft may have been upon a foreign
aircraft registry.
G-4-3
<PAGE> 145
The opinion relating to registration of the Aircraft is only as to its
current eligibility for registration and not with respect to events which may
occur in the future which may affect continued eligibility for registration. As
to matters of citizenship, the undersigned has relied upon representations made
in the Aircraft Registration Application executed by the Debtor and maintained
in the Records relating to the Aircraft. It is assumed the Aircraft is not
registered under the laws of any other country.
The undersigned has assumed that all documents are authentic and all
signatures are genuine and properly authorized.
This opinion is supplied to and may be relied upon by the entities to
whom it si addressed, solely for the purposes described herein.
Very truly yours,
DEBEE & GILCHRIST
Jack P. Gilchrist
G-4-4
<PAGE> 146
SCHEDULE I
to Opinion of _________ ____, ________
Re: NationsBank, National Association;
UniCapital Corporation/Aircraft Credit
Facility; One ______ ___ Aircraft,
Serial Number _________, U.S.
Registration Number _________; and
Two (2) _____ _____ Engines, Serial
Numbers __________ and _________;
Our File Number: 5091.003
NationsBank, National Association, as agent for the Lenders
NationsBank, National Association
The Lenders, as defined in the Credit Agreement
[other parties as requested]
<PAGE> 147
EXHIBIT H
Compliance Certificate
NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
NationsBank, National Association,
as Agent
_____________________________
_____________________________
Attention: ____________________
Telefacsimile: (___) ___-____
Reference is hereby made to the Credit Agreement dated as of June 10,
1998 (as amended, modified or restated from time to time, the "Agreement") among
First Security Bank, National Association, as trustee (the "Initial Borrower"),
and certain Affiliates of the Initial Borrower designated as Borrowers
thereunder (the Initial Borrower and such Affiliates being referred to
collectively as the "Borrowers"), the Lenders (as defined in the Agreement) and
NationsBank, National Association, as Agent for the Lenders ("Agent").
Capitalized terms used but not otherwise defined herein shall have the
respective meanings therefor set forth in the Agreement. The undersigned, a duly
authorized and acting Authorized Representative of each of the Borrowers, hereby
certifies to you as of __________ (the "Determination Date") as follows:
1. Calculations:
Compliance with Section 8.1: EBITDA-to-Interest Ratio of __________
[INSERT NAMES OF ALL BORROWERS] and their respective Subsidiaries
A. Consolidated Net Income $__________
B. Consolidated Interest Expense $__________
C. Taxes on Income $__________
D. Amortization $__________
E. Depreciation $__________
H-1
<PAGE> 148
F. Consolidated EBITDA (A + B + C + D + E) $__________
G. Ratio of F to A __________ to 1.00
REQUIRED: G MUST NOT BE LESS THAN 1.75 TO 1.00 FOR THE
FOUR-QUARTER PERIOD ENDING ON THE DETERMINATION DATE.
2. No Default
A. Since __________ (the date of the last similar
certification), (a) no Borrower has defaulted in the keeping,
observance, performance or fulfillment of its obligations
pursuant to any of the Loan Documents; and (b) no Default or
Event of Default specified in Article IX of the Agreement has
occurred and is continuing.
B. If a Default or Event of Default has occurred
since __________ (the date of the last similar certification),
the Borrowers propose to take the following action with
respect to such Default or Event of Default:__________________
______________________________________________________________
_______________________________________.
(Note, if no Default or Event of Default has
occurred, insert "Not Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 7.1 of the
Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:_________________________________
Authorized Representative
Name:_______________________________
Title:______________________________
H-2
<PAGE> 149
EXHIBIT I
FORM OF GUARANTY AGREEMENT
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty Agreement" or this "Guaranty"),
dated as of ______ __, ____, is made by ______________ (the "Guarantor") to
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States, as Agent (the "Agent") for each of
the lenders (the "Lenders" and collectively with the Agent the "Secured
Parties") now or hereafter party to the Credit Agreement (as defined below). All
capitalized terms used but not otherwise defined herein shall have the meaning
ascribed to such terms in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Agent and the Lenders have agreed to provide a revolving
credit facility to First Security Bank, National Association (the "Initial
Borrower"), solely as Trustee on behalf of the trust created by that certain
Trust Agreement (11111) dated June __, 1998 between First Security Bank,
National Association and Aircraft 11111, Inc., certain UniCapital Subsidiary
Trusts and UniCapital Special Purpose Corporations designated as Borrowing
Affiliates under the Credit Agreement (the Initial Borrower and such Affiliates
are referred to hereinafter individually as a "Borrower" and collectively as the
"Borrowers") pursuant to that certain Credit Agreement dated as of June 10, 1998
among the Borrowers, the Agent and the Lenders (as from time to time amended,
revised, modified, supplemented or amended and restated, the "Credit
Agreement"); and
WHEREAS, each Borrower is a trust or corporation that holds title to
Aircraft and/or Engines (or loans financing Aircraft and/or Engines owned by
Applicable Carriers); and
[WHEREAS, the Guarantor is the owner of beneficial interests in a
Borrower; and]
[WHEREAS, the Guarantor is a wholly-owned Subsidiary of a Borrower;
and]
WHEREAS, the Guarantor will materially benefit from the loans and
advances to be made under the Credit Agreement and the Guarantor is willing to
enter into this Guaranty to provide an inducement for the Secured Parties to
make loans and advances under the Credit Agreement; and
WHEREAS, a material part of the consideration given in connection with
and as an inducement to the execution and delivery of the Credit Agreement by
the Agent and the Lenders was the obligation of the Borrowers to cause the
Guarantor to guarantee the Obligations of the Borrowers under the Credit
Agreement; and
WHEREAS, as a condition to making and continuing to make any loans or
advances under the Credit Agreement, the Guarantor is required to guarantee to
the Secured Parties payment of the Borrower's Obligations in accordance with the
terms of this Agreement; and
I-1
<PAGE> 150
WHEREAS, the Secured Parties are unwilling to enter into the Loan
Documents and to continue to make Loans and Advances unless the Guarantors enter
into this Agreement;
NOW, THEREFORE, in order to induce the Secured Parties to enter into
the Loan Documents and to make Loans, and in consideration of the premises and
mutual covenants contained herein, the Guarantor hereby agrees as follows:
1. GUARANTY. The Guarantor hereby jointly and severally,
unconditionally, absolutely, continually and irrevocably guarantees to the
Secured Parties the payment and performance in full of the Borrowers'
Liabilities (as defined below). For all purposes of this Guaranty Agreement,
"Borrowers' Liabilities" means: (a) the Borrowers' prompt payment in full, when
due or declared due and at all such times, of all Obligations and all other
amounts pursuant to the terms of the Credit Agreement, the Notes, and all other
Loan Documents executed in connection with the Credit Agreement and all Rate
Hedging Obligations heretofore, now or at any time or times hereafter owing,
arising, due or payable from any Borrower to the Lenders, including without
limitation principal, interest, premium or fee (including, but not limited to,
loan fees and attorneys' fees and expenses); and (b) the Borrowers' prompt, full
and faithful performance, observance and discharge of each and every agreement,
undertaking, covenant and provision to be performed, observed or discharged by
any Borrower under the Credit Agreement and all other Loan Documents executed in
connection therewith and all obligations of any Borrower to any Secured Party
under Swap Agreements. The Guarantor's obligations to the Secured Parties under
this Guaranty Agreement are hereinafter collectively referred to as the
"Guarantor's Obligations"; provided, however, that the liability of the
Guarantor individually with respect to the Guarantor's Obligations shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations hereunder subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any applicable state law.
The Guarantor agrees that it is jointly and severally, directly and
primarily liable for the Borrowers' Liabilities.
2. PAYMENT. If any Borrower shall default in payment or performance of
any Borrowers' Liabilities, whether principal, interest, premium, fee
(including, but not limited to, loan fees and attorneys' fees and expenses), or
otherwise, when and as the same shall become due, whether according to the terms
of the Credit Agreement, by acceleration, or otherwise, or upon the occurrence
of any Event of Default under the Credit Agreement that has not been cured or
waived, then the Guarantor will, upon demand thereof by the Agent or its
successors or assigns AS OF THE DATE OF SUCH DEMAND, fully pay to the Agent, for
the benefit of the Secured Parties, subject to any restriction set forth in
Section 1 hereof, an amount equal to all Guarantor's Obligations then due and
owing.
3. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and not of
collection. The Guarantor's Obligations under this Guaranty Agreement shall be
joint and several, absolute and unconditional irrespective of the validity,
legality or enforceability of the Credit Agreement, the Notes or any other Loan
Document or any other guaranty of the Borrowers' Liabilities, and shall not be
affected by any action taken under the Credit Agreement, the Notes or any other
Loan Document, any other guaranty of the Borrowers' Liabilities, or any other
agreement between the Secured Parties
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and any Borrower 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 Borrowers' Liabilities, or by the
release or other disposal of any security for any of the Borrowers' Liabilities,
or by the dissolution of any Borrower or the combination or consolidation of any
Borrower into or with another entity or any transfer or disposition of any
assets of any Borrower or by any extension or renewal of the Credit Agreement,
any of the Notes or any other Loan Document, in whole or in part, or by any
modification, alteration, amendment or addition of or to the Credit Agreement,
any of the Notes or any other Loan Document, any other guaranty of the
Borrowers' Liabilities, or any other agreement between the Secured Parties and
any Borrower or any other Person, 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 the Guarantor, or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor; it being
the purpose and intent of the parties hereto that this Guaranty Agreement and
the Guarantor's Obligations hereunder shall be absolute and unconditional under
any and all circumstances and shall not be discharged except by payment as
herein provided.
4. CURRENCY AND FUNDS OF PAYMENT. The 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
Borrowers' Liabilities, or the rights of the Secured Parties with respect
thereto as against any Borrower, or cause or permit to be invoked any alteration
in the time, amount or manner of payment by any Borrower of any or all of the
Borrowers' Liabilities.
5. SUITS. The Guarantor from time to time shall pay to the Agent for
the benefit of the Secured Parties, on demand, at the Agent's place of business
set forth in the Credit Agreement or such other address as the Agent shall give
notice of to the Guarantor, the Guarantor's Obligations as they become or are
declared due, and in the event such payment is not made forthwith, the Agent or
the Lenders or any of them may proceed to suit against any one or more or all of
the Guarantors. At the Agent's election, one or more and successive or
concurrent suits may be brought hereon by the Agent against the Guarantor,
whether or not suit has been commenced against any Borrower, any other guarantor
of the Borrowers' Liabilities, or any other Person and whether or not the
Secured Parties have taken or failed to take any other action to collect all or
any portion of the Borrowers' Liabilities or have taken or failed to take any
actions against any collateral securing payment or performance of all or any
portion of the Borrowers' Liabilities.
6. SET-OFF AND WAIVER. The Guarantor waives any right to assert against
the Secured Parties as a defense, counterclaim, set-off or cross claim, any
defense (legal or equitable) or other claim which the Guarantor may now or at
any time hereafter have against any Borrower or any Secured Party without
waiving any additional defenses, set-offs, counterclaims or other claims
otherwise available to the Guarantor. If at any time hereafter any Secured Party
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 reasonable 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 paid by the Guarantor to the Agent, for
the benefit of the Secured Parties, on demand.
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7. WAIVER; SUBROGATION.
(a) The Guarantor hereby waives notice of the following events
or occurrences: (i) the Agent's acceptance of this Guaranty Agreement;
(ii) the Lenders' heretofore, now or from time to time hereafter making
Loans and otherwise loaning monies or giving or extending credit to or
for the benefit of any Borrower, whether pursuant to the Credit
Agreement or the Notes or any other Loan Document or any amendments,
modifications, or supplements thereto, or replacements or extensions
thereof; (iii) the Secured Parties or any Borrower heretofore, now or
at any time hereafter, obtaining, amending, substituting for,
releasing, waiving or modifying the Credit Agreement, the Notes or any
other Loan Documents; (iv) presentment, demand, default, non-payment,
partial payment and protest; (v) any Secured Party heretofore, now or
at any time hereafter granting to any Borrower (or any other party
liable to the Lenders on account of the Borrowers' Liabilities) or to
any other Guarantor any indulgence or extensions of time of payment of
the Borrowers' Liabilities or Guarantor's Obligations, respectively;
and (vi) any Secured Party heretofore, now or at any time hereafter
accepting from any Borrower, any other Guarantor, any other guarantor
of the Borrowers' Liabilities or any other Person, any partial payment
or payments on account of the Borrowers' Liabilities or any collateral
securing the payment thereof or the Agent settling, subordinating,
compromising, discharging or releasing the same. The Guarantor agrees
that each Secured Party 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 each Secured Party, in its sole and absolute discretion, deems
advisable, without in any way or respect impairing, affecting, reducing
or releasing the Guarantor from the Guarantor's Obligations, and the
Guarantor hereby consents to each and all of the foregoing events or
occurrences.
(b) The Guarantor hereby agrees that payment or performance by
the Guarantor of the Guarantor's Obligations under this Guaranty
Agreement may be enforced by the Agent on behalf of the Lenders upon
demand by the Agent to the Guarantor without the Agent being required,
the 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 any Borrower or any other Guarantor or any other
guarantor of the Borrowers' Liabilities, or (ii) seek to enforce or
resort to any remedies with respect to any security interests, Liens or
encumbrances granted to the Agent by any Borrower, any other Guarantor
or any other Person on account of the Borrowers' Liabilities or any
guaranty thereof, IT BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND
AGREED TO BY THE 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 ANY EVENT OF DEFAULT OCCURS AND
IS CONTINUING UNDER THE CREDIT AGREEMENT. Neither the Agent nor any
Lender shall 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 any Secured Party's failure or delay to do or take any of
the acts, actions or things described in this Guaranty including,
without limiting the generality of the foregoing, those acts, actions
and things described in this Section 7.
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(c) The Guarantor further agrees with respect to this Guaranty
that the Guarantor shall have no right of subrogation, reimbursement or
indemnity, nor any right of recourse to security for the Borrowers'
Liabilities until the Facility Termination Date.
8. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the date hereof and shall (subject to Section 2.14 of the Credit
Agreement) continue in full force and effect until the Facility Termination
Date. This Guaranty Agreement shall be binding upon and inure to the benefit of
the Guarantor, the Agent and the Lenders and their respective successors and
assigns. Notwithstanding the foregoing, the Guarantor may not, without the prior
written consent of the Agent, assign any rights, powers, duties or obligations
hereunder. Any claim or claims that the Secured Parties may at any time
hereafter have against the Guarantor under this Guaranty Agreement may be
asserted by any Secured Party by written notice directed to the Guarantor.
9. REPRESENTATIONS AND WARRANTIES. The Guarantor warrants and
represents to the Agent for the benefit of the Lenders that it is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against the
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 the 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 the Guarantor is a party, or any applicable laws, orders, regulations,
decrees or awards of any applicable governmental authority or arbitral body.
10. EXPENSES. The Guarantor agrees to be liable for the payment of all
reasonable fees and expenses, including attorney's fees, incurred by the Agent
in connection with the enforcement of this Guaranty Agreement.
11. REINSTATEMENT. The 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 Agent under the Credit Agreement or this Guaranty
Agreement is rescinded or must be restored for any reason.
12. ATTORNEY-IN-FACT. The Guarantor hereby appoints the Agent as the
Guarantor's attorney-in-fact for the purposes of carrying out the provisions of
this Agreement and taking any action and executing any instrument which the
Agent may deem necessary or advisable to accomplish the purposes hereof, which
appointment is coupled with an interest and is irrevocable; provided, that the
Agent shall have and may exercise rights under this power of attorney only upon
the occurrence and during the continuance of an Event of Default.
13. ABSOLUTE RIGHTS AND OBLIGATIONS. All rights of the Secured Parties,
and all obligations of the Guarantor hereunder, shall be absolute and
unconditional irrespective of:
(1) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document or any other agreement or instrument
relating to any of the Guarantor's Obligations;
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(2) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guarantor's Obligations, or any
other amendment or waiver of or any consent to any departure from the
Credit Agreement, any other Loan Document or any other agreement or
instrument relating to any of the Guarantor's Obligations;
(3) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Guarantor's
Obligations; or
(4) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Guarantor in respect of
the Guarantor's Obligations or of this Agreement.
14. RELIANCE. The Guarantor represents and warrants to the Agent, for
the benefit of the Secured Parties, that: (a) the Guarantor has adequate means
to obtain from each Borrower, on a continuing basis, information concerning such
Borrower and such Borrower's financial condition and affairs and has full and
complete access to each Borrower's books and records; (b) the Guarantor is not
relying on any Secured Party, its or their employees, agents or other
representatives, to provide such information, now or in the future; (c) the
Guarantor is executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) the Guarantor has relied solely on the Guarantor's own independent
investigation, appraisal and analysis of each Borrower and each Borrower's
financial condition and affairs in deciding to provide this Guaranty and is
fully aware of the same; and (e) the Guarantor has not depended or relied on any
Secured Party, its or their employees, agents or representatives, for any
information whatsoever concerning any Borrower or any Borrower's financial
condition and affairs or other matters material to the Guarantor's decision to
provide this Guaranty or for any counseling, guidance, or special consideration
or any promise therefor with respect to such decision. The Guarantor agrees that
neither the Agent nor any Lender has any duty or responsibility whatsoever, now
or in the future, to provide to the Guarantor any information concerning any
Borrower or any Borrower's financial condition and affairs, other than as
expressly provided herein, and that, if the Guarantor receives any such
information from the Agent or any Lender, its or their employees, agents or
other representatives, the Guarantor will independently verify the information
and will not rely on the Agent or any Lender, its or their employees, agents or
other representatives, with respect to such information.
15. DEFINITIONS. All terms used herein shall be defined in accordance
with the appropriate definitions appearing in the Uniform Commercial Code as in
effect in Florida, and such definitions are hereby incorporated herein by
reference and made a part hereof.
16. ENTIRE AGREEMENT. This Guaranty Agreement, together with the Credit
Agreement and the other Loan Documents, constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, inducements,
commitments or conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms hereof.
Neither this Guaranty Agreement nor any portion or provision hereof may be
changed, altered, modified, supplemented, discharged,
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canceled, terminated, or amended orally or in any manner other than by an
agreement, in writing signed by the parties hereto.
17. BINDING AGREEMENT; ASSIGNMENT. This Guaranty Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and inure to the
benefit of the parties hereto, and to their respective successors and assigns,
except that the Guarantor shall not be permitted to assign this Agreement or any
interest herein. All references herein to the Agent shall include any successor
thereof, each Lender and any other obligees from time to time of the Guarantor's
Obligations.
18. SWAP AGREEMENTS. All obligations of any Borrower to any Lender or
any affiliate of a Lender under Swap Agreements shall be deemed to be Secured
Obligations secured hereby (in each case unless otherwise agreed in writing by
such Lender or affiliate of such Lender), and each Lender or affiliate of a
Lender party to any such Swap Agreement shall be deemed to be a Secured Party
hereunder.
19. SEVERABILITY. In case any Lien, security interest or other right of
any Secured Party or any provision hereof shall be held to be invalid, illegal
or unenforceable, such invalidity, illegality or unenforceability shall not
affect any other Lien, security interest or other right granted hereby or
provision hereof.
20. COUNTERPARTS. This Guaranty Agreement may be executed in any number
of counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
21. INDEMNIFICATION. Without limitation of Section 11.9 of the Credit
Agreement or any other indemnification provision in any Loan Document, the
Guarantor hereby covenants and agrees to pay, indemnify, and hold the Secured
Parties harmless from and against any and all other out-of-pocket liabilities,
costs, expenses or disbursements of any kind or nature whatsoever arising in
connection with any claim or litigation by any Person resulting from the
execution, delivery, enforcement, performance and administration of this
Guaranty Agreement or the Loan Documents, or the transactions contemplated
hereby or thereby, or in any respect relating to the Collateral or any
transaction pursuant to which the Guarantor has incurred any Guarantor's
Obligations (all the foregoing, collectively, the "indemnified liabilities");
provided, however, that the Guarantor shall have no obligation hereunder with
respect to indemnified liabilities directly or primarily arising from the
willful misconduct or gross negligence of the Agent or any Lender. The
agreements in this subsection shall survive repayment of all Secured
Obligations, termination or expiration of this Guaranty Agreement and occurrence
of the Facility Termination Date.
22. TERMINATION. Subject to Section 2.14 of the Credit Agreement, this
Guaranty Agreement and all Guarantor's Obligations hereunder shall terminate on
the Facility Termination Date.
23. REMEDIES CUMULATIVE. All remedies hereunder are cumulative and are
not exclusive of any other rights and remedies of the Agent provided by law or
under the Credit Agreement, the other Loan Documents, or other applicable
agreements or instruments. The making of the Loans to
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the Borrowers pursuant to the Credit Agreement and the extension of the
Revolving Credit Facility to the Borrowers pursuant to the Credit Agreement
shall be conclusively presumed to have been made or extended, respectively, in
reliance upon the Guarantor's guaranty of the Guarantor's Obligations pursuant
to the terms hereof.
24. NOTICES. Any notice required or permitted hereunder shall be given,
(a) with respect to the Guarantor, at the address of the Borrowers indicated in
Section 11.2 of the Credit Agreement and (b) with respect to the Agent or a
Lender, at the Agent's address indicated in Section 11.2 of the Credit
Agreement. All such notices shall be given and shall be effective as provided in
Section 11.2 of the Credit Agreement.
25. GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED,
IN SUCH STATE.
(b) THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF DADE,
STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY
HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE OR TO THE JURISDICTION
OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS
GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE
BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER
LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED
OR CERTIFIED MAIL (POSTAGE PREPAID) AND IN ACCORDANCE WITH SECTION 11.2
OF THE CREDIT AGREEMENT, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR
UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY GUARANTOR OR ANY OF
A GUARANTOR'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE
GUARANTOR
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HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR HEREAFTER,
BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE, MAY BE
AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION WITH THE FOREGOING, THE GUARANTOR HEREBY
AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND
THE GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
26. GUARANTOR BOUND BY REPRESENTATIONS, WARRANTIES AND COVENANTS IN
CREDIT AGREEMENT. The Guarantor hereby represents and warrants that each of the
representations and warranties relating to it in Article VI of the Credit
Agreement are true and correct in all material respects on and as of the date of
this Guaranty Agreement, with the same effect as though such representations and
warranties had been made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date and except
that from the date that financial statements are delivered to the Agent and the
Lenders pursuant to Section 7.1 of the Credit Agreement, the representation and
warranty in Section 6.6(a) shall be deemed to be a representation and warranty
that the financial statements of the Borrowers and their respective Subsidiaries
most recently delivered to the Agent and the Lenders pursuant to Section 7.1 of
the Credit Agreement present fairly the financial condition of such Borrowers
and Subsidiaries as of the period reported therein, all in conformity with GAAP
applied on a Consistent Basis. Without limiting the generality of the
Guarantor's obligations under this Guaranty Agreement or any other Loan
Document, the Guarantor further agrees to be bound by each of the covenants
relating to it in Article VII or Article VIII of the Credit Agreement.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have duly executed this Guaranty
Agreement on the day and year first written above.
GUARANTOR:
_______________________________
WITNESS:
By:____________________________
_____________________________ Name:
Title:_________________________
_____________________________
Signature Page 1 of 2
<PAGE> 159
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
WITNESS:
By:_________________________________
___________________________ Name:_______________________________
Title: _____________________________
___________________________
Signature Page 2 of 2
<PAGE> 160
EXHIBIT J
Form of Security Agreement
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================================================================================
MORTGAGE AND
SECURITY AGREEMENT
between
_______________________________________________,
not in its individual capacity except as expressly stated in the
Credit Agreement (as defined herein), but solely as Trustee on behalf
of the trust created under the Trust Agreement (______)
dated ________ __, _____ between _____________________________ and Aircraft
__________, Inc.
and
AIRCRAFT _______, INC.
as Grantors,
and
NATIONSBANK, NATIONAL ASSOCIATION ,
as Agent and as Lender
------------ ---, --------
================================================================================
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
1. Grant of Security Interest......................................................................2
2. Maintenance of Security Interest................................................................6
3. Receipt of Payment..............................................................................8
4. General Collateral Warranties, Representations and Covenants....................................8
(a) Inspection.............................................................................8
(b) Transfers and Other Liens..............................................................9
(c) Location of Collateral.................................................................9
(d) Use of Collateral......................................................................9
(e) Owner of Collateral....................................................................9
(f) Authority.............................................................................10
(g) Payment of Taxes......................................................................10
(h) Compliance with Laws..................................................................10
(i) Personal Property.....................................................................10
(j) Agent May Act.........................................................................10
(k) Grantor Responsible for Collateral....................................................11
(l) Instrument or Chattel Paper...........................................................11
(m) Notice of Liens and Other Events......................................................11
(n) New Agent.............................................................................11
(o) Release of Collateral.................................................................11
(p) No Consents...........................................................................12
(q) No Liens..............................................................................12
(r) Condemnation..........................................................................12
(s) Default by Applicable Carrier under Lease or Carrier Loan Documents...................12
5. Account Covenants, Warranties and Representations..............................................12
(a) Assignments, Records and Schedules of Accounts........................................12
(b) Notice Regarding Disputed Accounts....................................................13
(c) Verification of Accounts..............................................................13
(d) Location of Account Records...........................................................13
(e) Genuine Accounts......................................................................13
(f) Bona Fide Accounts....................................................................13
(g) No Setoffs Exist......................................................................13
(h) No Reduction in Value.................................................................14
(i) No Allowances.........................................................................14
(j) No Prior Liens........................................................................14
(k) No Pledges............................................................................14
6. Inventory Covenants, Warranties and Representations............................................14
(a) Change of Trade Styles................................................................14
(b) Safekeeping of Inventory..............................................................15
(c) Location, Records and Schedules of Inventory..........................................15
(d) Returns of Inventory..................................................................15
(e) Location of Inventory.................................................................15
(f) No Liens..............................................................................16
</TABLE>
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<TABLE>
<S> <C> <C>
(g) No Bailment of Inventory..............................................................16
(h) No Consignment........................................................................16
(i) Limitation on Inventory at Leased Locations...........................................16
7. Equipment Covenants, Representations and Warranties............................................16
(a) Evidence of Ownership of Equipment....................................................16
(b) Location, Records and Schedules of Equipment..........................................16
(c) Sale or Mortgage of Equipment.........................................................17
(d) Maintenance of Equipment..............................................................17
(e) Location of Equipment.................................................................17
(f) No Liens..............................................................................17
(g) Limitation on Equipment at Leased Locations...........................................17
8. Aircraft and Engine Covenants, Warranties and Representations..................................17
(a) Recordation of Ownership..............................................................17
(b) Engine Power..........................................................................18
(c) Recordation of Title or Lien in the United States.....................................18
(d) Recordation of Title or Lien in Foreign Jurisdictions.................................18
(e) Eligibility...........................................................................19
(f) Compliance with Laws..................................................................20
(g) Restricted Countries..................................................................20
(h) Possession............................................................................20
(i) Records and Reports...................................................................22
(j) Maintenance...........................................................................22
(k) Replacement of Parts..................................................................22
(l) Pooling of Parts......................................................................23
(m) Alterations, Modifications and Additions..............................................24
(n) Nameplate.............................................................................24
(o) Pooling of Engines....................................................................24
(p) Re-Registration.......................................................................25
9. Leases and Carrier Loan Documents..............................................................25
(a) Delivery of Leases....................................................................25
(b) Delivery of Carrier Loan Documents....................................................26
(c) Aircraft Registered in the United States; Engines the Liens on which are Recorded
in the United States .................................................................26
(d) Foreign Registered Aircraft and Engines...............................................27
10. Leases and Carrier Loan Documents Warranties, Representations and Covenants....................27
(a) Enforcement...........................................................................27
(b) No Waiver of Rights or Modifications..................................................27
(c) Rights of Inspection..................................................................27
(d) Grantor Remains Liable................................................................27
(e) No Consents...........................................................................28
11. Insurance Required.............................................................................29
(a) Type of Insurance Required............................................................29
(b) Policy Provisions Required............................................................30
(c) Self-Insurance........................................................................31
(d) Reinsurance...........................................................................32
(e) Insurance Certificates Required.......................................................32
</TABLE>
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<TABLE>
<S> <C> <C>
(f) Power of Attorney.....................................................................32
(g) Agent May Act.........................................................................32
(h) Payment for Uninsured Loss............................................................33
(i) Application of Insurance Proceeds.....................................................33
(j) Net Proceeds..........................................................................33
(k) Notice of Loss........................................................................33
(l) Lender Insurance......................................................................33
12. Events of Loss; Governmental Authorities.......................................................33
(a) Event of Loss with Respect to an Engine...............................................33
(b) Event of Loss with Respect to an Aircraft.............................................35
(c) Replacement of Engines................................................................36
(d) Use of Aircraft Not Constituting an Event of Loss.....................................36
(e) Default...............................................................................36
13. Remedies Upon Event of Default.................................................................36
14. Anti-Marshalling Provisions....................................................................39
15. Indemnity and Expenses.........................................................................39
16. Appointment of Agent as Grantor's Lawful Attorney..............................................40
17. Waivers........................................................................................40
18. Trade Names....................................................................................41
19. Absolute Rights and Obligations................................................................41
20. Definitions....................................................................................42
21. Entire Agreement...............................................................................42
22. Further Assurances.............................................................................42
23. Binding Agreement; Assignment..................................................................42
24. Swap Agreements................................................................................43
25. Severability...................................................................................43
26. Successors and Assigns.........................................................................43
27. Counterparts...................................................................................43
28. Remedies Cumulative............................................................................43
29. Termination....................................................................................43
30. Notices........................................................................................44
31. Governing Law; Venue; Waiver of Trial by Jury..................................................44
32. Disclaimer. ..................................................................................45
SCHEDULE A [Reserved]...........................................................................A-1
SCHEDULE B Jurisdictions for Filing UCC-1 Financing Statements..................................B-1
SCHEDULE C-1 Form of Assignment of Lease........................................................C-1-1
SCHEDULE C-2 Form of Assignment of Carrier Loan Documents.......................................C-2-1
SCHEDULE C-3 Form of Assignment of Lease to Applicable Borrower.................................C-3-1
SCHEDULE D Form of Security Agreement Supplement................................................D-1
SCHEDULE E Locations of Collateral..............................................................E-1
SCHEDULE F [Reserved]...........................................................................F-1
SCHEDULE G Patents, Trademarks, Copyrights and Licenses.........................................G-1
SCHEDULE H Definitions..........................................................................H-1
</TABLE>
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MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT dated as of ________ __, _____ (as
amended, revised, modified, supplemented or amended and restated from time to
time, the "Security Agreement"), is made by EACH OF THE UNDERSIGNED (each a
"Grantor" and collectively the "Grantors") to NATIONSBANK, NATIONAL ASSOCIATION,
a national banking association, as Agent (the "Agent") for each of the lenders
(the "Lenders" and collectively with the Agent, the "Secured Parties") now or
hereafter party to the Credit Agreement (as defined below). All capitalized
terms used but not otherwise defined herein shall have the respective meanings
assigned thereto in Schedule H hereto.
W I T N E S S E T H:
WHEREAS, the Secured Parties have agreed to provide a revolving credit
facility to First Security Bank, National Association (the "Initial Borrower"),
solely as Trustee on behalf of the trust created by that certain Trust Agreement
(11111) dated June 9, 1998 between First Security Bank, National Association and
Aircraft 11111, Inc., certain UniCapital Subsidiary Trusts and UniCapital
Special Purpose Corporations designated as Borrowing Affiliates under the Credit
Agreement (the Initial Borrower and such Borrowing Affiliates are referred to
hereinafter as a "Borrower" or collectively as the "Borrowers") pursuant to that
certain Credit Agreement dated as of June 10, 1998 among the Borrowers, the
Agent and the Lenders (as from time to time amended, revised, modified,
supplemented or amended and restated, the "Credit Agreement"); and
WHEREAS, each Borrower is a trust or a corporation that holds title to
Aircraft and/or Engines (or loans financing Aircraft and/or Engines owned by
Applicable Carriers); and
WHEREAS, each Grantor that is not a Borrower (each a "Guarantor" and
collectively the "Guarantors") is the owner of beneficial interests in a
Borrower or is a wholly-owned Subsidiary of a Borrower; and
WHEREAS, each Guarantor has entered into a Guaranty Agreement dated as
of the date hereof (collectively or individually, as the context may indicate,
the "Guaranty Agreement") pursuant to which it has guaranteed the Obligations of
the Borrowers under the Credit Agreement; and
WHEREAS, each Grantor will materially benefit from the loans and
advances to be made under the Credit Agreement and each Grantor is willing to
enter into this Security Agreement to provide an inducement for the Secured
Parties to make loans and advances under the Credit Agreement; and
WHEREAS, as a condition to making and continuing to make any loans or
advances under the Credit Agreement, each Grantor is required to grant to the
Agent for the benefit of the Secured Parties a security interest in all of its
personal property and assets; and
<PAGE> 166
WHEREAS, the Secured Parties are unwilling to enter into the Loan
Documents unless the Grantors enter into this Agreement; and
WHEREAS, the undersigned, ___________________________, as Trustee under
the Trust Agreement (_____), as a Grantor is hereinafter referred to as the
"Undersigned Borrower";
NOW, THEREFORE, in order to induce the Secured Parties to enter into
the Loan Documents and to make Loans and Advances, and in consideration of the
premises and mutual covenants contained herein, each Grantor hereby agrees as
follows:
27. GRANT OF SECURITY INTEREST. As collateral security for the payment,
performance, and satisfaction of the Guarantors' Obligations under the Guaranty
Agreement and all Obligations of each Borrower under the Credit Agreement
(collectively, the "Secured Obligations"), the Undersigned Borrower (as to
paragraph (c) of this Section 1) and each Grantor (as to all other paragraphs of
this Section 1) hereby affirms, grants, pledges and assigns to the Agent (for
the benefit of the Secured Parties) and grants to the Agent (for the benefit of
the Secured Parties) a continuing first priority security interest in and to,
all of the property of such Grantor whether now owned or existing or hereafter
acquired or arising and wheresoever located, including without limitation the
following:
(a) all accounts, accounts receivable, notes, loan agreements,
contract rights, general intangibles, notes, bills, acceptances, choses
in action, chattel paper, instruments, documents, and other forms of
obligations at any time owing to each Grantor arising out of goods sold
or leased or for services rendered by such Grantor, the proceeds
thereof and all of such Grantor's rights with respect to any goods
represented thereby, whether or not delivered, goods returned by
customers and all rights as an unpaid vendor or lienor, including
rights of stoppage in transit and of recovering possession by
proceedings including replevin and reclamation, together with all
customer lists, books and records, ledger and account cards, computer
tapes, software, disks, printouts and records, whether now in existence
or hereafter created, relating thereto (collectively referred to
hereinafter as the "Accounts");
(b) all inventory of each Grantor wherever located (other than
aircraft or engines), including without limitation all goods
manufactured or acquired for sale or lease, and any piece goods, raw
materials, work in process and finished merchandise, findings or
component materials, and all supplies, goods, incidentals, office
supplies, packaging materials and any and all items used or consumed in
the operation of the business of such Grantor or which may contribute
to the finished product or to the sale, promotion and shipment thereof,
in which such Grantor now or at any time hereafter may have an
interest, whether or not the same is in transit or in the constructive,
actual or exclusive occupancy or possession of such Grantor or is held
by such Grantor or by others for such Grantor's account (collectively
referred to hereinafter as the "Inventory");
(c) the fixed wing jet engine aircraft owned by the
Undersigned Borrower and described on any Security Agreement
Supplement, as such Security Agreement Supplement may be amended,
supplemented or replaced from time to time, including any and all
parts,
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<PAGE> 167
appliances, components, accessories, replacement parts, accessions,
attachments or equipment installed on, or appurtenant to, or delivered
with or in respect thereof and all other property owned by the
Undersigned Borrower hereafter physically affixed, installed or
incorporated in or attached thereto and all documents with respect to
the aircraft, whether any maintained in original form, electronic form
or on microfiche, including but not limited to: FAA approved Aircraft
Flight Manual, any other flight manual, manufacturer's maintenance and
inspection manuals, parts catalog, engine and airframe logs, pilot
check lists, and operator's manuals for installed equipment, all of
which shall be current and complete from the date of manufacture, all
wiring diagrams and supporting technical publications, and all other
documentation and technical information relating to the aircraft,
whether in the Undersigned Borrower's control or the control of a
lessee of the aircraft (collectively referred to hereinafter as the
"Aircraft");
(d) the aircraft engines owned by each Grantor and described
on any Security Agreement Supplement, as such Security Agreement
Supplement may be amended, supplemented or replaced from time to time,
including any replacement thereof and all parts, appliances,
components, accessories, replacement parts, accessions, attachments or
equipment installed on, or appurtenant to, or delivered with or in
respect thereof and all other property owned by such Grantor hereafter
physically affixed, installed or incorporated in or attached thereto,
including, without limitation, any avionics equipment and any quick
engine change ("QEC") equipment attached thereto (collectively referred
to hereinafter as the "Engines"), and to the extent they are applicable
to the Engines, all right, title and interest of each Grantor in, to
and under all warranties, service contracts and product agreements of
any manufacturer or of any maintenance or overhaul agency of the
Engines, or any subcontractor or supplier or vendor thereof, to the
extent assignable or enforceable, and any and all rights of such
Grantor to compel performance of the terms of such warranties, service
contracts or product agreements respecting any of the Engines and all
documents with respect to the Engines, whether maintained in original
form, electronic form or on microfiche, including but not limited to:
manufacturer's maintenance and inspection manuals, parts catalog,
engine and airframe logs, pilot check lists, and operator's manuals for
installed equipment, all of which shall be current and complete from
the date of manufacture, all wiring diagrams and supporting technical
publications, and all other documentation and technical information
relating to the Engines, whether in the Grantor's control or the
control of a lessee of the Engines;
(e) all lease agreements, rental agreements and comparable
arrangements pursuant to which each Grantor leases Aircraft, Engines,
aircraft parts, engine parts or other property of any character or
description for operation or use by third parties (collectively
referred to hereinafter as the "Leases");
(f) all loan agreements, promissory notes and comparable
arrangements pursuant to which each Grantor lends money for the
purchase of Aircraft, Engines, aircraft parts, engine parts or other
property of any character or description for operation or use by third
parties (collectively referred to hereinafter as the "Carrier Loan
Documents");
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<PAGE> 168
(g) all goods of each Grantor (other than aircraft or
engines), including without limitation, all machinery, equipment,
parts, supplies, apparatus, appliances, tools, patterns, molds, dies,
blueprints, fittings, furniture, furnishings, fixtures and articles of
tangible personal property of every description now or hereafter owned
by such Grantor or in which such Grantor may have or may hereafter
acquire any interest, at any location (collectively referred to
hereinafter as "Equipment");
(h) all general intangibles in which a Grantor now or
hereafter acquires any rights, including but not limited to, security
interests in Aircraft, Engines and all other property of such Grantor,
causes of action, corporate or business records, inventions, designs,
goodwill, trade names, trade secrets, trade processes, licenses,
permits, franchises, customer lists, computer programs, all claims
under guaranties, tax refund claims, rights and claims against carriers
and shippers, leases, claims under insurance policies, all rights to
indemnification, all property in which such Grantor has a lien or
security interest and all other intangible personal property and
intellectual property of every kind and nature (collectively referred
to hereinafter as "General Intangibles");
(i) all of each Grantor's right, title and interest, whether
now owned or hereafter acquired, in and to all patents and patent
applications (including without limitation the patents and patent
applications identified on Schedule G attached hereto and incorporated
herein by reference) and including the right to recover for all past,
present and future infringements thereof and all reissues, divisions,
continuations, continuations-in-part, substitutes, renewals, and
extensions thereof, all improvements thereon, and all other rights of
any kind whatsoever of such Grantor accruing thereunder or pertaining
thereto (collectively, the "Patents");
(j) all of each Grantor's right, title and interest, whether
now owned or hereafter acquired, in and to all trademarks, trade names,
trade dress, service marks, trademark and service mark registrations,
and applications for trademark or service mark registration and any
renewals thereof (including without limitation each trademark, trade
name, trade dress, registration and application identified in Schedule
G attached hereto and incorporated herein by reference) and including
all income, royalties, damages and payments now and hereafter due
and/or payable with respect thereto (including without limitation
damages for past or future infringements thereof), the right to sue or
otherwise recover for all past, present and future infringements
thereof, all rights corresponding thereto throughout the world (but
only such rights as now exist or may come to exist under applicable
local law) and all other rights of any kind whatsoever of each Grantor
accruing thereunder or pertaining thereto, together in each case with
the goodwill of the business connected with the use of, and symbolized
by, each such trademark and service mark (collectively, the
"Trademarks");
(k) all of each Grantor's right, title and interest, whether
now owned or hereafter acquired, in and to all copyrights and copyright
applications (including without limitation the copyrights and copyright
applications identified on Schedule G attached hereto and incorporated
herein by reference) and including the right to recover for all past,
present and future infringements thereof and all reissues, divisions,
continuations, continuations-in-part,
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<PAGE> 169
substitutes, renewals, and extensions thereof, all improvements
thereon, and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto (collectively, the
"Copyrights");
(l) all license agreements regarding Patents, Trademarks or
Copyrights with any other party, whether such Grantor is a licensor or
licensee under any such license agreement (including without limitation
the licenses listed on Schedule G attached hereto and incorporated
herein by reference) (collectively, the "Licenses"); and
(m) all rights now or hereafter accruing to each Grantor under
contracts (including without limitation the Management Agreement, any
Manufacturer's Warranty, any security documents and the Carrier Loan
Documents), lease agreements or other instruments to perform services,
to hold and use land and facilities, and to enforce all rights
thereunder (collectively referred to hereinafter as "Contract Rights");
(n) all other equipment, machinery, furniture, fixtures and
other goods and personal property of every character and description;
(o) all monies, securities, drafts, notes, items and other
property of each Grantor and the proceeds thereof, and any and all
deposits (general or special), balances, sums, proceeds, and credits of
such Grantor with, and any and all claims of such Grantor against, any
Secured Party or any other Person, at any time existing;
(p) all of such Grantor's rights in reserves on deposit with
a financial institution;
(q) all labels and other devices, names, or marks affixed or
to be affixed to Inventory for the purpose of selling or of identifying
the same or the seller or manufacturer thereof and all right, title and
interest of such Grantor therein and thereto;
(r) all books and records relating to any of the Collateral
(as hereinafter defined) (including without limitation, customer data,
credit files, computer programs, printouts, and other computer
materials and records of each Grantor pertaining to any of the
foregoing); and
(s) all accessions to, substitutions for and all replacements,
products and proceeds of the foregoing, including without limitation
proceeds of insurance policies insuring the Collateral (as hereinafter
defined).
All of the property and interests in property described in subsections
(a) through (s) and all other property and interests in personal property which
shall, from time to time, secure the Secured Obligations are herein collectively
referred to as the "Collateral". Notwithstanding the foregoing and subject to
Section 7.21 of the Credit Agreement, the Grantors shall be entitled to exercise
all of their rights under any agreements, documents and instruments (including
Leases and Carrier Loan Documents) prior to the occurrence of an Event of
Default.
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<PAGE> 170
28. MAINTENANCE OF SECURITY INTEREST. Each Grantor will perform, or
will cause to be performed, unless expressly waived in writing by the Agent,
each and all of the following:
(a) Record, register and file this Security Agreement and any
Security Agreement Supplements, as well as such notices, financing
statements, and/or other documents or instruments as may, from time to
time, be reasonably requested by the Agent to fully carry out the
intent of this Security Agreement, with:
(i) the FAA Recording Office, in the case of any
Aircraft registered in the United States or any Engine the
Lien on which is to be perfected under United States law,
concurrently with the delivery or acceptance of such Aircraft
or Engine pursuant to a Security Agreement Supplement;
(ii) Applicable Foreign Jurisdictions, in the case of
any Aircraft registered outside the United States or any
Engine the Lien on which is to be perfected in an Applicable
Foreign Jurisdiction, concurrently with the delivery or
acceptance of such Aircraft or Engine pursuant to a Security
Agreement Supplement;
(iii) the jurisdictions listed on Schedule B hereto
in the case of Collateral other than Aircraft and Engines; and
(iv) such other administrative or governmental
agencies, whether domestic or foreign, as may be reasonably
determined by the Agent to be necessary or advisable in order
to perfect, establish, confirm and/or maintain the security
interest and lien created hereunder as a legal, valid and
binding first priority security interest and lien upon the
Collateral except Permitted Liens;
provided, however, that the Agent, with the prior written consent of
the Required Lenders, may waive the requirement of registering the Lien
of the Agent on any Aircraft or Engine not registered in the United
States. The Lenders will consider in good faith any proposal by a
Borrower for alternative arrangements for improving or perfecting the
security held by the Agent in any such case.
(b) Furnish to the Agent an opinion or opinions from FAA
Counsel, or its counterpart under the Applicable Foreign Aviation Law,
as to the Grantor's fulfillment of the requirements of this Security
Agreement relating to the propriety of registration of the Aircraft,
the perfection of the security interests in the Aircraft, the Engines,
the Leases and the Carrier Loan Documents described herein, and the
absence of Liens and encumbrances against the Aircraft and Engines,
other than Permitted Liens;
(c) Furnish to the Agent copies of all documents or other
evidence of every such recording, registering and filing;
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<PAGE> 171
(d) Execute and deliver or perform, or cause to be executed
and delivered or performed, such further and other instruments and/or
acts as the Agent reasonably determines are necessary or advisable to
fully carry out the intent and purpose of this Security Agreement or to
subject the Collateral to any security interest and lien created
hereunder or under the Assignment of Leases or Assignment of Carrier
Loan Documents, including, without limitation:
(i) any and all acts and things which may be
reasonably requested by the Agent with respect to complying
with or remaining subject to the Mortgage Convention, the laws
and regulations of the FAA, any Applicable Foreign Aviation
Law, or the laws and regulations of any of the various states
or countries in which the Engines or Aircraft presently or may
fly over, or operate in, or in which the Engines or Aircraft
are located or may become located;
(ii) defending the right, title and interest of each
Grantor, the Agent and the Secured Parties in and to the
Collateral by means of negotiation and, if necessary,
appropriate legal proceedings, against each and every party
claiming an interest therein (other than Permitted Liens)
contrary or adverse to such Grantor's, the Agent's or the
Secured Parties' right, title and interest, as the case may
be, in and to same; and
(iii) prior to the inclusion of any Engine in
Eligible Engines or any Aircraft in Eligible Aircraft, (A) the
filing of a Security Agreement Supplement, and other financing
statements or other documents as may be necessary or desirable
to perfect the first priority security interest of the Agent
for the benefit of the Secured Parties therein, and (B) in
accordance with the requirements of Section 9 of this Security
Agreement, execute and deliver to the Agent (x) the original
chattel paper counterpart of any Lease and (y) the original
promissory note and an original of the other Carrier Loan
Documents entered into by any Grantor with respect to such
additional Engine or additional Aircraft, and (C) execute and
deliver an Assignment of Lease in the form of Schedule C-1
hereto or Assignment of Carrier Loan Documents in the form of
Schedule C-2 hereto and (if an Applicable Intermediary is
leasing the Aircraft or Engine to the Applicable Carrier in
accordance with Section 2.16 of the Credit Agreement) cause
the Applicable Intermediary to execute both an Assignment of
Lease in the form of Schedule C-1 hereto and an Assignment of
Lease in the form of Schedule C-3 hereto.
(e) Do and cause to be done all things necessary to perfect
and keep in full force the security interest granted in favor of the
Agent for the benefit of the Secured Parties, including, but not
limited to, one or more applications for certificate of title and any
other papers, documents or instruments requested by any one of the
Secured Parties in connection with this Security Agreement, the prompt
payment of all fees and expenses incurred in connection with any
filings to be made to perfect or continue a security interest in the
Collateral in favor of the Agent for the benefit of the Secured Parties
and the making of
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<PAGE> 172
appropriate entries on its financial statements and books and records
disclosing the security interest granted hereunder to the Agent for the
benefit of the Secured Parties. Each Grantor hereby consents to the
filing of extensions of such filings without such Grantor's signature.
29. RECEIPT OF PAYMENT. In the event an Event of Default shall occur
and be continuing and a Grantor (or any of its affiliates, subsidiaries,
stockholders, directors, officers, employees or agents) shall receive any
proceeds of Collateral, including without limitation monies, checks, notes,
drafts or any other items of payment, each Grantor shall hold all such items of
payment in trust for the Agent, for the benefit of the Secured Parties, and as
the property of the Agent, for the benefit of the Secured Parties, separate from
the funds of such Grantor, and no later than the first Business Day following
the receipt thereof, at the election of the Agent, such Grantor shall cause the
same to be forwarded to the Agent for its custody and possession on behalf of
the Lenders as additional Collateral.
30. GENERAL COLLATERAL WARRANTIES, REPRESENTATIONS AND COVENANTS. Each
Grantor warrants, represents and covenants with the Agent that the Secured
Parties may rely on all statements or representations made by such Grantor on or
with respect to Collateral and from and after the date of this Security
Agreement until termination hereof in accordance with Section 29 hereof:
(a) INSPECTION. The Agent (by any of its officers, employees
and agents), on behalf of the Secured Parties, shall have the right
upon prior notice to an executive officer of a Grantor, and at any
reasonable times during such Grantor's usual business hours, (i) to
inspect the Collateral, all records related thereto (and to make
extracts or copies from such records), and the premises upon which any
of the Collateral is located (subject to any restriction on inspection
contained in an Eligible Lease or Eligible Carrier Loan Document with
respect to an Aircraft or Engine or related Collateral; provided that
notwithstanding any such Lease or Carrier Loan Document, (A) any Person
designated by a Secured Party may inspect such Aircraft or Engine at
any reasonable time upon an event of default under such Lease or
Carrier Loan Document, and (B) upon any Event of Default, such Grantor
shall use its best efforts to cause the Applicable Carrier (and any
other Person) to permit any Person designated by a Secured Party to
inspect such Aircraft or Engine at any time), and (ii) to discuss such
Grantor's affairs and finances with any Person (other than Account
debtors) and to verify with any Person other than Account Debtors the
amount, quality, quantity, value and condition of, or any other matter
relating to, the Collateral and, (iii) if an Event of Default has
occurred and is continuing, to discuss such Grantor's affairs and
finances with such Grantor's Account debtors and to verify the amount,
quality, value and condition of, or any other matter relating to, the
Collateral and such Account debtors. Upon or after the occurrence and
during the continuation of an Event of Default, the Agent may at any
time and from time to time employ and maintain on such Grantor's
premises a custodian selected by the Agent who shall have full
authority to do all acts necessary to protect the Agent's (for the
benefit of the Secured Parties) interest. All expenses incurred by the
Agent, on behalf of the Secured Parties, by reason of the employment of
such custodian shall be paid by such Grantor, added to the Secured
Obligations and secured by the Collateral.
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<PAGE> 173
(b) TRANSFERS AND OTHER LIENS. No Grantor shall (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of any
of, or grant any option with respect to, the Collateral, except for
dispositions permitted under this Security Agreement or the Credit
Agreement, (ii) create or suffer to exist any Lien, security interest
or other charge or encumbrance upon or with respect to any of the
Collateral except for the security interests created by this Security
Agreement or other Permitted Liens; or (iii) take any other action in
connection with any of the Collateral that would materially impair the
value of the interest or rights of such Grantor in the Collateral taken
as a whole or that would materially impair the interest or rights of
the Agent for the benefit of the Lenders.
(c) LOCATION OF COLLATERAL. The chief and other places of
business of each Grantor, the books and records relating to the
Collateral and the Collateral (other than Engines and Aircraft as to
which such Grantor will issue to the Agent, upon request, written
reports indicating the location of such Engines and Aircraft, or if
such Engines and Aircraft are leased or were sold to third parties, to
whom such Engines and Aircraft are leased or were sold and the location
of the lessee or purchaser of such Engines and Aircraft) are located at
the addresses set forth on Schedule E hereto, and such Grantor will not
change any of the same without prior written notice to and consent of
the Agent.
(d) USE OF COLLATERAL. The Collateral is and will be used in
each Grantor's business and not for personal, family, household or
farming use.
(e) OWNER OF COLLATERAL. It is and, except as expressly
permitted by this Security Agreement or the Credit Agreement, will
continue to be the owner of the Collateral hereunder, now owned and
upon the acquisition of the same, free and clear of all Liens, claims,
encumbrances and security interests other than the security interest in
favor of the Agent for the benefit of the Secured Parties hereunder and
Permitted Liens, and that it will defend such Collateral and any
products and proceeds thereof against all material claims and demands
of all Persons (other than holders of Permitted Liens) at any time
claiming the same or any interest therein adverse to the Secured
Parties, except:
(i) for the leasing of Aircraft and Engines and
related parts in the ordinary course of such Grantor's
businesses pursuant to Leases, provided that (A) the Agent,
for the benefit of the Secured Parties, shall have a duly
perfected first priority Lien (subject to Permitted Liens) on
each of the Aircraft, Engines and Parts leased under such
Leases and on the Lessor's interest in such Leases pursuant to
an Assignment of Lease and (B) no such Lease gives rise to any
Default or Event of Default; and
(ii) for the secured financing and sale of Aircraft
and Engines and related parts in the ordinary course of such
Grantor's business pursuant to Carrier Loan Documents,
provided that (A) such Grantor shall have a duly perfected
first priority Lien (subject to Permitted Liens) on each of
the Aircraft, Engines and Parts financed and sold in
connection with such Carrier Loan Documents, which Lien has
been assigned to the Agent, and the Agent shall have a duly
perfected first priority Lien on
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<PAGE> 174
the Grantor's interest in such Carrier Loan Documents pursuant
to an Assignment of Carrier Loan Documents and (B) no such
Carrier Loan Document gives rise to any Default or Event of
Default; and
(iii) as otherwise provided in the Loan Documents.
The inclusion of "proceeds" of the Collateral under the
security interest granted herein shall not be deemed a consent
by the Lenders, individually or collectively, to any sale or
other disposition of any part or all of the Collateral except
as expressly permitted herein;
(f) AUTHORITY. It has the unqualified right to enter into this
Security Agreement and to perform its terms.
(g) PAYMENT OF TAXES. Each Grantor has made and will continue
to make payment or deposit or otherwise provide for the payment, when
due, of all taxes, assessments or contributions required by law which
have been or may be levied or assessed against the undersigned, whether
with respect to any of the Collateral or any wages or salaries paid by
such Grantor or in respect of such Grantor's income, or otherwise, and
will deliver to the Agent, on demand, certificates or other evidence
satisfactory to the Agent attesting thereto. Notwithstanding the
foregoing, each Grantor shall have the right to contest any tax,
assessment, or contribution required by law to the extent such contest
is provided for under any Lease or Carrier Loan Document so long as (i)
such contest is diligently conducted in good faith by appropriate
proceedings, (ii) no Lien (other than a Permitted Lien) results on any
Aircraft, Engine or other Collateral, (iii) there is no reasonable
likelihood of the sale, appropriation, or foreclosure on any Aircraft,
Engine or other Collateral, and (iv) adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP.
(h) COMPLIANCE WITH LAWS. Each Grantor will use or cause to be
used the Collateral for lawful purposes only, with all reasonable care
and caution and in conformity in all material respects with all
applicable laws, ordinances and regulations. Notwithstanding the
foregoing, each Grantor shall have the right to contest the compliance
with any applicable law, ordinance or regulation to the extent such
contest is provided for under any Lease or Carrier Loan Document so
long as (i) such contest is diligently conducted in good faith by
appropriate proceedings, (ii) no Lien (other than a Permitted Lien)
results on any Aircraft, Engine or other Collateral, (iii) there is no
reasonable likelihood of the sale, appropriation, or foreclosure on any
Aircraft, Engine or other Collateral, and (iv) adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP.
(i) PERSONAL PROPERTY. The Collateral is now and shall remain
personal property, and no Grantor will permit any of the Collateral to
become a part of or affixed to real property (unless such Grantor has
granted the Agent for the benefit of the Lenders a first priority
perfected Lien on such real property) or an accession to other personal
property.
(j) AGENT MAY ACT. The Agent may, in its discretion, for the
account and expense of the Grantors, pay any amount or do any act
required of the Grantors hereunder
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or reasonably requested by the Secured Parties to preserve, protect,
maintain or enforce the Obligations, the Collateral or the first
priority Lien granted herein (subject only to Permitted Liens), and
which the Grantors fail to do or pay within any applicable grace period
provided for in the Loan Documents (it being understood that no grace
period exists for the maintenance of insurance required by Section 11),
and any such payment shall be deemed an advance by the Lenders to the
Grantors and shall be payable on demand together with interest at the
Default Rate, and shall constitute part of the Obligations; provided,
however, that this provision shall not impair the Grantors' rights to
contest Liens as provided in Section 8.4 of the Credit Agreement.
(k) GRANTOR RESPONSIBLE FOR COLLATERAL. Each Grantor assumes
all responsibility and liability arising from the use of the Collateral
unless the claim giving rise to such responsibility or liability arises
out of the gross negligence or wilful misconduct of the Agent or the
Secured Parties, provided that this provision is given solely for the
benefit of the Secured Parties and no Grantor waives any right it may
have against third parties;
(l) INSTRUMENT OR CHATTEL PAPER. If any amount payable under,
in, or in connection with any of the Collateral shall be or become
evidenced by any instrument or chattel paper, such instrument or
chattel paper shall be immediately delivered to the Agent and duly
endorsed in a manner satisfactory to the Agent to be held as Collateral
pursuant to this Security Agreement;
(m) NOTICE OF LIENS AND OTHER EVENTS. Each Grantor will advise
the Agent promptly, in reasonable detail, at their respective addresses
set forth in the Credit Agreement, if it has knowledge (i) of any Lien
(other than Permitted Liens) on, or claim asserted against, any of the
Collateral and (ii) of the occurrence of any other event which could
reasonably be expected to have a Material Adverse Effect on the
Collateral or on the Liens created hereunder;
(n) NEW AGENT. At any time, the Agent may assign, transfer and
deliver any or all of the Collateral to any successor Agent in
accordance with the terms of Section 10.7 of the Credit Agreement,
whereupon the retiring Agent shall be fully discharged from all
responsibility and such successor shall be vested with all powers and
rights of the Agent hereunder with respect thereto, but the Agent shall
retain all rights and powers with respect to any Collateral not
assigned, transferred or delivered, provided that no such assignment
shall increase the liability of the Grantors hereunder;
(o) RELEASE OF COLLATERAL. So long as no Default or Event of
Default shall have occurred and be continuing, the Agent on behalf of
the Secured Parties is hereby authorized to release (and provide
written confirmation of such release) the first priority security
interest granted in or on any of the Collateral hereunder in accordance
with Section 2.14 of the Credit Agreement;
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(p) NO CONSENTS. No authorization, consent, approval or other
action by, and no notice to or filing with, any governmental authority
or regulatory body or any other Person is required either (i) for the
grant by such Grantor of the security interests granted hereby or for
the execution, delivery or performance of this Agreement by such
Grantor, or (ii) for the perfection of or the exercise by the Agent, on
behalf of the Secured Parties, of its rights and remedies hereunder,
except for the filings required by the Uniform Commercial Code of the
State in which such Grantor maintains its chief executive office and
the other jurisdictions on Schedule B attached hereto and the filing of
this Security Agreement and any corresponding Lease or Carrier Loan
Documents and the related Assignment of Lease or Assignment of Carrier
Loan Documents with the FAA Recording Office and with the appropriate
recording office in the Applicable Foreign Jurisdiction to the extent
required by any Applicable Foreign Aviation Law.
(q) NO LIENS. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral
purported to be granted by such Grantor hereunder is on file in any
recording office, except such as may have been filed in favor of the
Agent for the benefit of the Secured Parties and except for Permitted
Liens.
(r) CONDEMNATION. The Grantor shall, immediately upon
obtaining knowledge of the institution or threatened institution of any
condemnation or other eminent domain proceedings for the taking of any
portion of or interest in the Collateral, notify the Agent thereof in
writing. The Agent may participate in any such proceedings. The Grantor
shall deliver, or cause to be delivered, to the Agent all instruments
requested by the Agent to permit such participation. In any such
proceedings, the Agent may be represented by counsel satisfactory to
it.
(s) DEFAULT BY APPLICABLE CARRIER UNDER LEASE OR CARRIER LOAN
DOCUMENTS. Notwithstanding anything contained in this Security
Agreement, no Grantor will be deemed to be in breach of its obligations
herein with respect to any Aircraft or Engine subject to a Lease or
Carrier Loan Documents by virtue of a default by the Applicable Carrier
under such Lease or Carrier Loan Documents so long as the conditions of
Section 9.6 of the Credit Agreement have been satisfied.
31. ACCOUNT COVENANTS, WARRANTIES AND REPRESENTATIONS. With respect to
its Accounts, each Grantor warrants, represents and covenants with the Agent for
the benefit of the Secured Parties that the Agent and each Lender may rely on
all statements or representations made by such Grantor on or with respect to any
Schedule of Accounts prepared and delivered by it and that from and after the
date of this Security Agreement until the termination hereof in accordance with
Section 29 hereof:
(a) ASSIGNMENTS, RECORDS AND SCHEDULES OF ACCOUNTS. Each
Grantor shall keep accurate and complete records of its Accounts
("Account Records") and from time to time at intervals designated by
the Agent such Grantor shall provide the Agent with a schedule of
Accounts in form and substance acceptable to the Agent describing all
Accounts created or
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acquired by such Grantor ("Schedule of Accounts"); provided, however,
that such Grantor's failure to execute and deliver any such Schedule of
Accounts shall not affect or limit the Agent's security interest or
other rights in and to any Accounts for the benefit of the Secured
Parties. If requested by the Agent, each Grantor shall furnish the
Agent with copies of proof of delivery and other documents relating to
the Accounts so scheduled, including without limitation repayment
histories and present status reports (collectively, "Account
Documents") and such other matter and information relating to the
status of then existing Accounts as the Agent shall request. No Grantor
shall remove any Account Records or Account Documents or change its
chief executive offices from the locations set forth in Schedule E
hereto without 30 days prior written notice to the Agent as provided in
Section 30 hereof and delivery to the Agent by the applicable Grantor
prior to such removal of executed financing statements, amendments,
applications for title and other documents necessary in the
determination of the Agent to maintain the security interests granted
hereunder.
(b) NOTICE REGARDING DISPUTED ACCOUNTS. In the event any
amounts due and owing in excess of $10,000 in the aggregate amount, are
in dispute between any Account Debtor and a Grantor (which shall
include without limitation any dispute in which an offset claim or
counterclaim may result), such Grantor shall provide the Agent with
written notice thereof as soon as practicable, explaining in detail the
reason for the dispute, all claims related thereto and the amount in
controversy.
(c) VERIFICATION OF ACCOUNTS. If an Event of Default has
occurred and is continuing, any of the Agent's officers, employees or
agents shall have the right, at any reasonable time or times hereafter,
to verify with Account Debtors the validity, amount or any other matter
relating to any Accounts and, whether or not a Default or Event of
Default has occurred, any of the Agent's officers, employees or agents
shall have the right to verify the same with any Grantor.
(d) LOCATION OF ACCOUNT RECORDS. All Account Records and
Account Documents are located only at such Grantor's locations as set
forth on Schedule E attached hereto and incorporated herein by
reference or at such other locations as to which the Grantor has
notified the Agent in writing not less than 30 days prior to such
relocation;
(e) GENUINE ACCOUNTS. The Accounts are genuine, are in all
material respects what they purport to be, are not evidenced by an
instrument or document or, if evidenced by an instrument or document,
are only evidenced by one original instrument or document;
(f) BONA FIDE ACCOUNTS. The Accounts cover bona fide sales,
leases and deliveries of Inventory usually dealt in by such Grantor, or
the rendition by such Grantor of services, to an Account Debtor in the
ordinary course of business;
(g) NO SETOFFS EXIST. The amounts of the face value shown on
any Schedule of Accounts or invoice statement delivered to the Agent
with respect to any Account, are actually owing to such Grantor and are
not contingent for any reason; and there are no
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setoffs, discounts, allowances, claims, counterclaims or disputes of
any kind or description in an amount greater than $10,000 in the
aggregate, existing or asserted with respect thereto and such Grantor
has not made any agreement with any Account Debtor thereunder for any
deduction therefrom, except as may be stated in the Schedule of
Accounts and reflected in the calculation of the face value of each
respective invoice related thereto;
(h) NO REDUCTION IN VALUE. Except for conditions generally
applicable to such Grantor's industry and markets, there are no facts,
events, or occurrences known to such Grantor pertaining particularly to
any Accounts which are reasonably expected to materially impair in any
way the validity, collectibility or enforcement of Accounts that would
reasonably be likely, in the aggregate, to be of material economic
value, or in the aggregate materially reduce the amount payable
thereunder from the amount of the invoice face value shown on any
Schedule of Accounts, and on all contracts, invoices and statements
delivered to the Agent, with respect thereto;
(i) NO ALLOWANCES. Other than in the ordinary course of
business as generally conducted by each Grantor over a period of time,
such Grantor will not grant any extension of the time of payment of any
of the Accounts, compromise, compound or settle the same for less than
the full amount thereof or release, wholly or partially, any person
liable for the payment thereof, or allow any credit or discount
whatsoever thereon;
(j) NO PRIOR LIENS. The goods or services giving rise to
Accounts are not, and were not at the time of the sale or performance
thereof, subject to any Lien, claim, encumbrance or security interest,
except those of the Agent for the benefit of Secured Parties and except
for Permitted Liens;
(k) NO PLEDGES. The Accounts have not been pledged to any
Person other than to the Agent for the benefit of the Secured Parties
under this Agreement and will be owned by such Grantor free and clear
of any Liens, claims, encumbrances or security interests except
Permitted Liens;
32. INVENTORY COVENANTS, WARRANTIES AND REPRESENTATIONS. With respect
to its Inventory, each Grantor warrants, represents and covenants with the Agent
for the benefit of the Lenders that the Secured Parties may rely on all
statements or representations made by such Grantor on or with respect to any
Inventory and that from and after the date of this Security Agreement until the
termination hereof in accordance with Section 29 hereof:
(a) CHANGE OF TRADE STYLES. No Grantor shall change, amend,
alter, terminate, or cease using its material trade names or styles
under which it sells or leases Inventory as of the date of this
Agreement ("Trade Styles"), or use additional Trade Styles, without
giving the Agent at least 30 days' prior written notice and delivery to
the Agent by the applicable Grantor prior to such removal, change,
amendment, alteration, or use, of executed financing statements,
amendments, one or more applications for certificate of title, and
other documents
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necessary in the determination of the Agent to maintain the security
interests granted hereunder.
(b) SAFEKEEPING OF INVENTORY. Each Grantor shall be
responsible for the safekeeping of its Inventory, and, subject to
Section 14 hereof, in no event shall the Agent have any responsibility
for:
(i) Any loss or damage to Inventory or destruction
thereof occurring or arising in any manner or fashion from any
cause;
(ii) Any diminution in the value of Inventory; or
(iii) Any act or default of any carrier, lessee,
warehouseman, bailee or forwarding agency thereof or other
Person in any way dealing with or handling Inventory.
(c) LOCATION, RECORDS AND SCHEDULES OF INVENTORY. Each Grantor
shall keep correct and accurate records itemizing and describing the
kind, type, location and quantity of Inventory, its cost therefor and
the selling price of Inventory held for sale or lease, and the daily
withdrawals therefrom and additions thereto, and shall furnish to the
Agent from time to time at reasonable intervals designated by the
Agent, a current schedule of Inventory ("Schedule of Inventory") based
upon its most recent physical inventory and its daily inventory
records. Each Grantor shall conduct a physical inventory, no less than
annually, and shall furnish to the Agent such other documents and
reports thereof as the Agent shall reasonably request with respect to
the Inventory. Subject to compliance at all times with Sections 6(g),
(h) and (i), no Grantor shall, other than in the ordinary course of
business in connection with its sale, remove any material amount of
Inventory from the locations set forth on Schedule E hereto to a
location not also set forth on Schedule E hereto, each of such
locations being owned by a Grantor unless otherwise indicated, without
30 days prior written notice to the Agent as provided in Section 29
hereof and delivery to the Agent by the applicable Grantor prior to
such removal of executed financing statements, amendments, applications
for title and other documents necessary in the determination of the
Agent to maintain the security interests granted hereunder.
(d) RETURNS OF INVENTORY. If any Account Debtor returns any
Inventory to a Grantor after shipment thereof, and such or returns
return generate credits in excess of $10,000 in the aggregate on any
Accounts of such Account Debtor, such Grantor shall notify the Agent in
writing of the same as soon as practicable.
(e) LOCATION OF INVENTORY. All Inventory is located only at
such Grantor's locations as set forth on Schedule E attached hereto and
incorporated herein by reference;
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(f) NO LIENS. None of its Inventory is or will be subject to
any Lien, claim, encumbrance or security interest whatsoever, except
for the security interest of the Agent for the benefit of the Lenders
hereunder and except for Permitted Liens;
(g) NO BAILMENT OF INVENTORY. No Inventory of such Grantor is
or shall at any time or times hereafter be, stored with a bailee,
warehouseman, or similar party without the Agent's prior written
consent which consent shall not be unreasonably withheld and, if the
Agent gives such consent, such Grantor will concurrently therewith
cause any such bailee, warehouseman, or similar party to issue and
deliver to the Agent upon its request therefor, in form and substance
reasonably acceptable to the Agent, warehouse receipts therefor in the
Agent's name and take such other action and be party to such document
as deemed necessary or prudent by the Agent to maintain the security
interest of the Lenders in such Inventory;
(h) NO CONSIGNMENT. No Inventory is, or shall at any time or
times hereafter be, under consignment to any Person.
(i) LIMITATION ON INVENTORY AT LEASED LOCATIONS. No Inventory
is at or shall be kept at any location that is leased by such Grantor
from any other Person unless such location and lessee is set forth on
Schedule E hereto and the Grantor has caused the lessor to waive its
rights with respect to such Inventory in form and substance acceptable
to the Agent and delivered in writing to the Agent prior to such amount
of Inventory being at such one or more locations.
33. EQUIPMENT COVENANTS, REPRESENTATIONS AND WARRANTIES. With respect
to its Equipment, each Grantor warrants, represents and covenants with the Agent
for the benefit of the Lenders that the Secured Parties may rely on all
statements or representations made by such Grantor on or with respect to any
Equipment and that from and after the date of this Security Agreement until the
termination hereof in accordance with Section 29 hereof:
(a) EVIDENCE OF OWNERSHIP OF EQUIPMENT. The Grantors, as soon
as practicable following a request therefor by the Agent, shall deliver
to the Agent any and all evidence of ownership of any of the Equipment
(including without limitation certificates of title and applications
for title).
(b) LOCATION, RECORDS AND SCHEDULES OF EQUIPMENT. The Grantors
shall maintain accurate, itemized records itemizing and describing the
kind, type, quality, quantity and value of its Equipment and shall
furnish the Agent upon request with a current schedule containing the
foregoing information, but, other than during the continuance of an
Event of Default, not more often than once per fiscal quarter. No
Grantor shall remove any material portion of the Equipment from the
locations set forth in Schedule E hereto to a location not also set
forth on Schedule E hereto without at least 30 days' prior written
notice to the Agent as provided in Section 30 hereof and delivery to
the Agent by the applicable Grantor prior to such removal of executed
financing statements, amendments, applications for certificate of title
and other documents necessary to maintain the security interests
granted hereunder.
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(c) SALE OR MORTGAGE OF EQUIPMENT. Other than in the ordinary
course of business with respect to disposition of obsolescent Equipment
(other than Aircraft or Engines) or replacement of Equipment (other
then Aircraft or Engines) with other Equipment performing similar
functions and having similar or better utility and value, and except as
permitted by the Credit Agreement prior to the occurrence and
continuance of an Event of Default, no Grantor shall sell, exchange,
lease, mortgage, encumber, pledge or otherwise dispose of or transfer
any of the Equipment or any part thereof without the prior written
consent of the Agent.
(d) MAINTENANCE OF EQUIPMENT. Each Grantor shall keep and
maintain its Equipment in good operating condition and repair, ordinary
wear and tear excepted. No Grantor shall permit any such items to
become a fixture to real property (unless such Grantor has granted the
Agent for the benefit of the Lenders a Lien on such real property) or
accessions to other personal property.
(e) LOCATION OF EQUIPMENT. All Equipment (other than Aircraft
and Engines) is located only at such Grantor's locations set forth in
Schedule E hereto or at such other locations as to which such Grantor
has notified the Agent in writing not less than 30 days prior to such
relocation and has provided to the Agent executed financing statements
for such location satisfying the requirements of Section 2 hereof;
(f) NO LIENS. None of its Equipment is or will be subject to
any Lien, claim, encumbrance or security interest whatsoever, except
for the security interest of the Agent, for the benefit of the Lenders,
hereunder and Permitted Liens;
(g) LIMITATION ON EQUIPMENT AT LEASED LOCATIONS. No Equipment
of such Grantor is at or shall be kept at any location that is leased
by such Grantor from any other Person unless such location and lessee
is set forth on Schedule E hereto and the Grantor has caused the lessor
to waive its rights with respect to such Equipment in form and
substance acceptable to the Agent.
34. AIRCRAFT AND ENGINE COVENANTS, WARRANTIES AND REPRESENTATIONS. Each
Grantor warrants, represents and covenants with the Agent for the benefit of the
Lenders that the Secured Parties may rely on all statements or representations
made by such Grantor and that from and after the date of this Security Agreement
until the termination hereof in accordance with Section 29 hereof:
(a) RECORDATION OF OWNERSHIP. Each Grantor's ownership of or
first priority Lien on the Aircraft and Engines has been duly recorded
with the FAA Recording Office in accordance with the requirements of
the FAA Act or to the extent required by any Applicable Foreign
Aviation Law, has been duly recorded with the appropriate recording
office in the Applicable Foreign Jurisdiction;
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(b) ENGINE POWER. Each of the Engines has 750 or more rated
takeoff horsepower or the equivalent of such horsepower on takeoff;
(c) RECORDATION OF TITLE OR LIEN IN THE UNITED STATES.
Promptly upon the acquisition of an Aircraft registered in the United
States or an Engine the Lien on which is recorded under United States
law and in any event prior to the inclusion of such Aircraft in
Eligible Aircraft and such Engine in Eligible Engine, each Grantor
shall in accordance with the requirements of the FAA Act, duly record
with the FAA Recording Office, such conveyance of Aircraft in favor of
such Grantor and deliver to the Agent a Security Agreement Supplement
and all other documents and instruments required to be delivered under
Section 5.2 of the Credit Agreement;
(d) RECORDATION OF TITLE OR LIEN IN FOREIGN JURISDICTIONS.
Promptly upon the acquisition of an Aircraft or Engine registered
outside of the United States and in any event prior to the inclusion of
such Aircraft in Eligible Aircraft and such Engine in Eligible Engines,
each Grantor shall in accordance with the requirement of the Applicable
Foreign Aviation Law, duly record with the office required by (and to
the extent required by) such Applicable Foreign Aviation Law such
conveyance of Aircraft or Engine (as the case may be) in favor of such
Grantor, and deliver to the Agent a Security Agreement Supplement and
all other documents and instruments required to be delivered under
Section 5.2 of the Credit Agreement and evidence (including opinions of
counsel if requested by the Agent) that:
(i) the Agent's right and interest in and to such
Aircraft or Engine (as the case may be), the related Lease or
Carrier Loan Documents, and the other Collateral are
recognized and fully enforceable in the Applicable Foreign
Jurisdiction and that the Agent's rights in and to such
Aircraft or Engine, the related Assignment of Lease or
Assignment of Carrier Loan Documents, and the other Collateral
will not be impaired by reason of its registration in such
Applicable Foreign Jurisdiction;
(ii) it is not necessary for the Agent or the
Secured Parties to register or qualify to do business in such
Applicable Foreign Jurisdiction as a result of filing and/or
recordation therein of this Security Agreement, the related
Assignment of Lease or Assignment of Carrier Loan Documents,
or the exercise of any rights or remedies with respect to the
Aircraft or Engine pursuant to this Security Agreement;
(iii) insurance as required by Section 11 hereof has
been obtained;
(iv) such Applicable Foreign Jurisdiction (A) will
provide substantially equivalent protection for the rights of
creditors in similar transactions as provided under United
States law, including, without limitation, the remedies
provided for in this Security Agreement (except that, in the
absence of restrictions under the laws of such country on
rights and remedies of creditors and secured parties similar
to those imposed by Sections 362 and 363 of the Bankruptcy
Code, rights and remedies similar to those available under
Section 1110 of the Bankruptcy Code shall not be required),
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(B) will enforce a judicial order or judgment obtained by the
Agent or the Secured Parties in the United States without
another hearing on or retrying the merits of such action in
such Applicable Foreign Jurisdiction subject to procedural and
public policy requirements therein, and (C) will not impose
requirements which materially increase the administrative or
other burdens or obligations of the Agent and the Secured
Parties under this Security Agreement and the other Loan
Documents unless insurance (or an indemnity in the case of
Rated Carriers) reasonably satisfactory to the Agent and the
Required Lenders is provided, at the Grantor's expense, to
cover such burdens or obligations;
(v) import and export certificates and any exchange
permits necessary to allow all payments provided for under the
related Lease or Carrier Loan Documents, if required, shall
have been obtained;
(vi) such Grantor shall have effected or caused to
be effected all recordings and filings that are required to
perfect a first priority Lien (subject only to Permitted
Liens) of the Agent in the Aircraft or Engine, the related
Assignment of Lease or Assignment of Carrier Loan Documents,
and the other Collateral;
(vii) the Agent and the Secured Parties shall not be
subject to the imposition of, or increase in the amount of,
any tax, tariff, duty or similar governmental charge payable
due to the registration of such Aircraft or Engine in the
Applicable Foreign Jurisdiction unless an indemnity from a
Rated Carrier satisfactory to the Agent and the Required
Lenders in their sole discretion is in effect at all times at
such Grantor's expense to fully indemnify the Secured Parties
against such taxes, tariffs, duties or similar governmental
charges;
(viii) the terms of this Security Agreement,
including Section 31, are legal, valid, binding and
enforceable in such Applicable Foreign Jurisdiction (subject
to customary exclusions);
(ix) there is no tort liability of the beneficial
owner, record owner, lessor or mortgagee of an aircraft not in
possession thereof under the laws of such Applicable Foreign
Jurisdiction, other than tort liability which might have been
imposed on such owner, lessor or mortgagee under the laws of
the United States or any state thereof (it being understood
that, in the event such latter opinion cannot be given in a
form satisfactory to the Agent and the Required Lenders, such
opinion shall be waived, if insurance reasonably satisfactory
to the Agent and Required Lenders is provided, at the
Grantor's expense, to cover such risk);
(e) ELIGIBILITY. Each Aircraft is an Eligible Aircraft and
each Engine is an Eligible Engine;
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(f) COMPLIANCE WITH LAWS. Each Grantor agrees that it shall
not use or operate any Aircraft or Engine, or permit any Aircraft or
Engine to be used or operated, in violation of any law (including,
without limitation, laws concerning alcoholic beverages, prohibited
substances, or insurance) of any Governmental Authority or in violation
of any airworthiness certificate, license or registration relating to
any Aircraft or Engine issued by any such Governmental Authority. In
the event that any such law requires the alteration of an Aircraft or
Engine, each Grantor will conform thereto or obtain conformance
therewith and will maintain or cause to be maintained such Aircraft or
Engine in proper operating condition under such laws, rules,
regulations and orders (or if such Aircraft or Engine is in storage, in
compliance with all applicable laws and with all manufacturers
warranties and requirements for storage). Notwithstanding the
foregoing, each Grantor shall have the right to contest the compliance
with any applicable law, ordinance or regulation to the extent such
contest is provided for under any Lease or Carrier Loan Document so
long as (i) such contest is diligently conducted in good faith by
appropriate proceedings, (ii) no Lien (other than Permitted Liens)
results on any Aircraft, Engine or other Collateral, (iii) there is no
reasonable likelihood of the sale, appropriation, or foreclosure on any
Aircraft, Engine or other Collateral, and (iv) adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(g) RESTRICTED COUNTRIES. Each Grantor agrees that it will not
permit any Aircraft or Engine to be registered, operated, used or
located in any Restricted Country or leased (pursuant to a Lease) or
sold (pursuant to Carrier Loan Documents) to a Person who is domiciled
in or organized under the laws of any Restricted Country;
(h) POSSESSION. Except as otherwise set forth expressly herein
or in the Credit Agreement, no Grantor will permit or will, without the
prior written consent of the Agent and the Required Lenders, lease,
sublease or otherwise in any manner deliver, transfer or relinquish
possession of any Aircraft or Engine; provided however, that so long as
no event of default shall have occurred and be continuing under the
applicable Lease or Carrier Loan Documents, each Grantor may, without
such prior written consent:
(i) permit the Applicable Carrier to participate in
normal interchange or pooling agreements in compliance with
Sections 8(l) and 8(o);
(ii) deliver or permit the delivery or possession of
an Aircraft or Engine to the manufacturer thereof for testing
or for other similar purposes, or to any organization for
service, repair, maintenance or overhaul work on such Aircraft
or Engine or for alterations in or modifications or additions
to such Aircraft or Engine to the extent required or permitted
by the terms hereof and the other Loan Documents;
(iii) permit the Applicable Carrier to lease or
sublease an Aircraft or Engine so long as (A) the Applicable
Carrier remains fully liable for all of its obligations under
the Lease or Carrier Loan Documents with respect to such
Aircraft or Engine, (B) the
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lease or sublease by such Applicable Carrier is a "true lease"
(and not a lease intended as security) under applicable
commercial law or applicable law relating to creditors' rights
and bankruptcy, (c) the lease or sublease by such Applicable
Carrier is subordinate to the Lease or Carrier Loan Documents
relating to such Aircraft or Engine and has a lease term that
is no longer than the terms of such Lease, (D) either the
Agent has a first priority perfected lien (subject only to
Permitted Liens) on such Aircraft or Engine or the Grantor has
a first priority perfected Lien (subject only to Permitted
Liens) on such Aircraft or Engine which Lien has been assigned
to the Agent, and (E) the requirements of Section 8.17(b) of
the Credit Agreement have been satisfied;
(iv) install or permit the installation of an Engine
on an aircraft owned by such Grantor or in which such Grantor
has a Lien pursuant to Carrier Loan Documents, as the case may
be, free and clear of all Liens except Permitted Liens and the
rights of air carriers under normal interchange and pooling
agreements permitted by Section 8(m);
(v) install or permit the installation of an Engine
on an aircraft owned or leased by an Applicable Carrier and
subject to a third party's security interest, but only if (A)
such airframe is free and clear of all Liens except the third
party's security interest and Permitted Liens, and (B) such
Applicable Carrier and the Agent shall have received from such
third party a written agreement (which written agreement may
be within a lease or security agreement between the Applicable
Carrier and such third party so long as the Agent has
enforceable third party beneficiary rights) whereby such third
party expressly agrees that neither it nor its successors or
assigns shall acquire or claim any right, title, or interest
in such Engine being installed on such airframe at any time
while such Engine is subject to this Security Agreement or the
other Loan Documents;
(vi) lease or sell Aircraft or Engines to an
Applicable Carrier pursuant to a Lease or Carrier Loan
Documents; provided, that in connection with any such Lease or
Carrier Loan Documents, all necessary action shall be taken
which is required to create, preserve and protect the Agent's
first priority perfected security interest (subject to
Permitted Liens) in and to such Aircraft or Engine and the
related Lease or Carrier Loan Documents and the Agent shall
have received an opinion of counsel (in form and substance
satisfactory to the Agent) to such effect and to such further
effect as the Agent may reasonably request;
None of the permitted relinquishments of possession set forth
in Section 8(h)(i) through Section 8(h)(vi) above shall affect the
registration (except to the extent permitted by Section 8(p))of such
Aircraft or Engine or in any way discharge or diminish any of the
Grantor's obligations to the Secured Parties hereunder or under any
other Loan Document or constitute a waiver of the Secured Parties'
right or remedies hereunder or thereunder. In the event that a Grantor
or an Applicable Carrier shall have received from a third party
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referenced in Section 8(i)(v) a written agreement complying with clause
(B) of such section, the Agent hereby agrees for the benefit of such
third party that the Agent shall not acquire or claim, as against such
third party, title or interest in such airframe (other than an
Aircraft) as the result of such Engine being installed on such airframe
at any time while such airframe is subject to the third party's
security interest.
(i) RECORDS AND REPORTS. Each Grantor shall maintain or cause
to be maintained accurate and complete records, logs, manuals and all
other materials required by the FAA or any Applicable Foreign
Jurisdiction to be maintained in respect of each Aircraft and Engine.
Each Grantor shall promptly furnish or cause to be furnished to the
Agent such information as may be required to enable the Agent to file
any reports required to be filed by the Agent with the FAA or any
Applicable Foreign Jurisdiction because of the Agent's interest in any
Aircraft or Engine and upon the occurrence of an Event of Default (upon
the Agent's request) shall deliver to the Agent the originals of all
such documents in possession of such Grantor and copies of all such
documents relating to Aircraft and Engines leased or sold to third
parties.
(j) MAINTENANCE. Each Grantor will keep or will cause to be
kept each Aircraft and Engine in good repair and condition and
airworthy in all respects and will perform all checks and overhauls
required by the FAA or Applicable Foreign Aviation Law or the
applicable maintenance program, and without limiting the generality of
the foregoing, each Grantor shall or shall cause each Aircraft and
Engine:
(i) subject to the right to contest set forth in
Section 4(h) hereof, to be maintained, serviced, repaired,
overhauled, altered, modified, added to and tested in
accordance with the standard practices for similar equipment
(including, without limitation, to the extent required by law,
by the FAA, by the Applicable Foreign Aviation Law or by the
relevant insurance carriers), which practices shall at all
times be at or above the standard of the industry for
maintenance of similar equipment;
(ii) subject to clause (vi) in the definition of
Event of Loss, to be maintained, serviced, repaired,
overhauled and tested, so as to keep such Aircraft or Engine
in such condition as may be necessary to enable any
airworthiness certification, license or registration of such
Aircraft or Engine to be maintained in good standing at all
times under the FAA Act, or the Applicable Foreign Aviation
Law or any other requirement of law or as shall be required by
any and all applicable airworthiness directives, operators
letters, mandatory service bulletins and non-mandatory service
bulletins which relate to airworthiness;
(iii) to be maintained in compliance with all
warranties or manufacturer's mandatory requirements.
(k) REPLACEMENT OF PARTS. Each Grantor shall promptly replace
or cause to be replaced all Parts, which may from time to time become
worn out, lost, stolen, destroyed,
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seized, confiscated, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever. In addition, each Grantor may
remove or may cause to be removed in the ordinary course of
maintenance, service, repair, overhaul or testing of any Parts, whether
or not worn out, lost, stolen, destroyed, seized, confiscated, damaged
beyond repair or permanently rendered unfit for use; provided, however,
that the Grantor will replace or will cause to be replaced such Parts
as promptly as possible. All replacement Parts shall be free and clear
of all Liens (other than Permitted Liens) and shall be in as good
operating condition as, and shall have a value and utility at least
equal to, the Parts replaced, assuming such replaced Parts were in the
condition and repair required to be maintained by the terms hereof;
provided, however, that each Grantor shall have the right to install or
to cause to be installed temporary replacement Parts pending the
completion of permanent repairs or installation of permanent
replacement Parts, in which event the Grantor shall install or shall
cause to be installed permanent replacement Parts to meet such
requirements as soon as reasonably possible and in any event within
ninety (90) days from the date of installation of such temporary
replacement Parts. All Parts at any time removed from any Aircraft or
Engine shall remain subject to the Lien created under this Security
Agreement no matter where located, until such time as such Parts shall
be replaced by Parts which have been incorporated in such Aircraft or
Engine and which meet the requirements of subsections (i) and (ii)
below. Immediately upon any replacement Part becoming incorporated or
installed in or attached to any Aircraft or Engine as provided above,
without further act, (i) such replacement Part shall become subject to
the Lien created under this Security Agreement and be deemed part of
such Aircraft or Engine for all purposes hereof to the same extent as
the Parts originally incorporated in such Aircraft or Engine (and the
Grantor shall make all filings or registrations necessary to perfect
the Agent's Lien in such Part), and (ii) the replaced Part shall be
released from the Lien of this Security Agreement and the replaced Part
shall no longer be deemed a Part hereunder;
(l) POOLING OF PARTS. Any Part removed from an Aircraft or
Engine as provided in Section 8(k) may be subjected to a normal pooling
arrangement customarily entered into by the Applicable Carrier and
entered into in the ordinary course of business of the Applicable
Carrier, so long as a part replacing such removed Part shall be
incorporated in such item as promptly as possible after the removal of
such removed Part, provided that no such arrangement or permit requires
or results in any change in registration of or transfer of title to any
Aircraft or Engine. In addition, any replacement Part incorporated in
an Aircraft or Engine in accordance with Section 8(k) may be owned by
another Person subject to such a normal pooling arrangement, so long as
the Grantor promptly, either (i) causes title to or a first priority
Lien in such replacement Part to vest in such Grantor free and clear of
all Liens except Permitted Liens, which replacement Part shall then be
subject to the Lien created by this Security Agreement, or (ii)
replaces such replacement Part by incorporating or installing in or
attaching to the Aircraft or Engine from which it was removed a further
replacement Part meeting the requirements of this Security Agreement
and owned by such Grantor or in which such Grantor has first priority
Lien free and clear of all Liens (other than Permitted Liens) and by
causing such replacement Part to be subject to the Lien created by this
Security Agreement as set forth in Section 8(k);
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(m) ALTERATIONS, MODIFICATIONS AND ADDITIONS. Each Grantor
shall make or shall cause to be made such alterations and modifications
in and additions to the Aircraft and Engines as may be required from
time to time to meet the requirements of the FAA or the Applicable
Foreign Jurisdiction (subject to contest rights in the applicable Lease
or Carrier Loan Documents) and to maintain the certificate of
airworthiness therefor. In addition, each Grantor may make or may cause
to be made from time to time make such alterations and modifications in
and additions to any Aircraft or Engine as such Grantor may deem
desirable; provided that each such alteration, modification and
addition is readily removable from such Aircraft or Engine or that such
alteration, modification or addition shall not diminish the value,
utility or condition of such Aircraft or Engine below the value,
utility or condition thereof immediately prior to such alteration,
modification or addition, assuming the Aircraft or Engine was then of
the value or utility and in the condition required to be maintained by
the terms of this Security Agreement; and provided, further, that no
such alteration, modification or addition shall cause the airworthiness
certification or other license, registration or authorization of the
Aircraft or Engine to cease to be in good standing under the FAA Act or
the Applicable Foreign Aviation Law. All Parts added to any Aircraft or
Engine as the result of such alteration, modification or addition
shall, without further act, be subject to the Lien created under this
Security Agreement. Notwithstanding the foregoing sentence of this
Section 8(m), so long as no event of default shall have occurred and be
continuing under the applicable Lease or Carrier Loan Documents, the
Grantor may remove or may cause to be removed any Part if (A) such Part
is in addition to, and not in replacement of or substitution for, any
Part originally incorporated in such Aircraft or Engine at the time of
delivery thereof or any Part in replacement of or substitution for any
such Part or such Part is obsolete or no longer useful in the
Applicable Carrier's operation of the Aircraft or Engine, (B) such Part
is not required to be incorporated or installed in or attached or added
to such Aircraft or Engine pursuant to the terms of this Section 8, and
(C) such Part can be removed from such Aircraft or Engine without
causing any material damage thereto. Upon the removal of any Part as
provided above, such Part shall be released from the Lien created under
this Security Agreement.
(n) NAMEPLATE. Each Grantor shall place and maintain, or shall
cause to be placed and maintained, a fireproof plate in a reasonably
prominent position on the flightdeck or cockpit of each Aircraft and on
each Engine stating:
THIS [AIRCRAFT][ENGINE] IS OWNED BY [name of Borrower or
Applicable Carrier] AND IS SUBJECT TO A FIRST PRIORITY SECURITY
INTEREST IN FAVOR OF [NATIONSBANK, AS AGENT][Name of Borrower, WHICH
HAS BEEN ASSIGNED TO NATIONSBANK, AS AGENT].
(o) POOLING OF ENGINES. Any Engine may be subjected to normal
pooling arrangements customarily entered into by the Applicable Carrier
and entered into in the ordinary course of business of the Applicable
Carrier, so long as (i) no transfer of the registration of the Engine
shall be effected in connection therewith and (ii) no such agreement
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or arrangement shall result in the transfer of title to the Engine, it
being understood that a loss of title pursuant to such an arrangement
shall be deemed to be an Event of Loss;
(p) RE-REGISTRATION. In connection with any re-registration of
any Aircraft or Engine, (i) each Grantor shall have caused the Agent to
have a (or shall have assigned to the Agent its own) valid first
priority perfected security interest (subject only to Permitted Liens)
in such Aircraft or Engine under the laws of the country of
re-registration, (ii) the obligations of the Grantor under this
Security Agreement (or a replacement mortgage and security agreement
governed by the laws of the jurisdiction of re-registration) shall be
valid, binding and enforceable (in each case subject to customary
exceptions) in the country of re-registration, (iii) any import permits
necessary to take such Aircraft or Engine into the country of
re-registration shall be in full force and effect, (iv) all insurance
required by Section 11 shall be in full force and effect prior to, at
the time of and after such change in registration, (v) no Liens (other
than Permitted Liens) shall arise by reason of such re-registration,
(vi) it shall not be necessary for the Agent or the Lenders to qualify
to do business in the jurisdiction of re-registration, (vii) the Agent
shall have received an opinion of counsel, expert in the laws of the
jurisdiction of re-registration, to the effect set forth in clauses
(i), (ii), (v) and (vi) above, and (viii) each Grantor and such
Aircraft or Engine shall remain in compliance with all requirements set
forth in this Security Agreement and any other Loan Document, including
without limitation the requirements of Section 8(d). Each Grantor shall
pay all costs, expenses, fees and other charges incurred as a
consequence of any re-registration of any Aircraft or Engine. The Agent
and the Lenders shall cooperate with each Grantor and take all
reasonable lawful action requested by such Grantor, at such Grantor's
cost and expense, in connection with the re-registration of any
Aircraft or Engine pursuant hereto. Notwithstanding the foregoing,
Aircraft and Engines may only be re-registered in (i) the United
States, (ii) the country in which the Applicable Carrier is organized,
or (iii) subject to the limitations of subsection (f) of the definition
of Eligible Aircraft, the country of another Eligible Carrier.
35. LEASES AND CARRIER LOAN DOCUMENTS.
(a) DELIVERY OF LEASES. Each Grantor shall promptly deliver to
the Agent, for the benefit of the Secured Parties, the original chattel
paper counterpart of any Lease entered into by any Grantor subsequent
to the date hereof with respect to any Engine or Aircraft, executed by
such Grantor, as lessor, and the lessee thereunder with all pertinent
lease supplements, schedules and delivery receipts attached, together
with an executed assignment of such lease in the form of Schedule C-1
hereto. If more than one original lease counterpart of a Lease shall
have been executed, each counterpart of such Lease shall be
consecutively numbered and Counterpart Number 1 shall be delivered to
the Agent. Each counterpart of such Lease shall conspicuously bear a
legend substantially as follows:
"A first priority security interest has been granted
in the Chattel Paper of this document and the
[engine] [aircraft] described herein in favor of
NationsBank, National
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Association, as Agent for certain Lenders, pursuant
to a Security Agreement dated as of ____ ___, 19__.
No security interest may be created herein through a
filing in favor of any other party or through the
transfer of possession of any counterpart hereof
other than Counterpart Number l, which shall be
identified and the counterpart containing the receipt
therefor executed by the holder of such security
interest on the signature page thereof."
With respect to any Lease executed prior to the date hereof,
in lieu of the requirements specified in the preceding paragraph, each
Grantor shall deliver the original of such Lease and any supplements,
schedules and delivery receipts attached with a legend in the form
specified in the preceding paragraph conspicuously affixed to the first
page or cover page of each executed counterpart thereof in such
Grantor's possession, and an assignment of such Lease (consented to by
the lessee) in the form of Schedule C-1 hereto. In addition, each
Grantor shall cause all notations or endorsements of prior Liens on or
affixed to such Leases to be duly canceled.
(b) DELIVERY OF CARRIER LOAN DOCUMENTS. Each Grantor shall
promptly deliver to the Agent, for the benefit of the Secured Parties,
the original instruments constituting Carrier Loan Documents entered
into by any Grantor subsequent to the date hereof with respect to a
particular Engine or Aircraft, executed by such Grantor, as creditor
and the Applicable Carrier or debtor thereunder with all pertinent
supplements, schedules, exhibits, and delivery receipts attached,
together with an executed assignment of such Carrier Loan Documents in
the form of Schedule C-2 hereto. Only one original promissory note
shall be executed in connection with any Carrier Loan Documents and
such original promissory note shall be delivered to the Agent for the
benefit of the Secured Parties.
With respect to any Carrier Loan Documents executed prior to
the date hereof, in lieu of the requirements specified in the preceding
paragraph, each Grantor shall deliver the original of such Carrier Loan
Documents and any supplements, schedules and delivery receipts
attached, and an assignment of such Carrier Loan Documents (consented
to by the debtor) in the form of Schedule C-2 hereto. In addition, each
Grantor shall cause all notations or endorsements of prior Liens on or
relating to such Carrier Loan Documents to be duly canceled.
(c) AIRCRAFT REGISTERED IN THE UNITED STATES; ENGINES THE
LIENS ON WHICH ARE RECORDED IN THE UNITED STATES . With respect to
Aircraft which are registered in the United States under the FAA Act,
and Engines the Liens on which are recorded in the United States under
the FAA Act, the Leases, Carrier Loan Documents, Assignments of Lease
and Assignments of Carrier Loan Documents shall (to the extent required
under applicable law) be in a form recordable under the FAA Act, and
original counterparts thereof shall be delivered to FAA Counsel for
filing with the FAA in accordance with the FAA Act, and FAA Counsel
shall issue an opinion as required under Section 2 hereof.
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(d) FOREIGN REGISTERED AIRCRAFT AND ENGINES. With respect to
Aircraft and Engines which are registered in Applicable Foreign
Jurisdictions, the Leases, Carrier Loan Documents, Assignments of Lease
and Assignments of Carrier Loan Documents shall be in a form recordable
under Applicable Foreign Aviation Law, and original counterparts
thereof shall (to the extent required under applicable law) be
delivered to counsel approved by the Agent to be sufficiently skilled
under Applicable Foreign Aviation Law, for filing in the appropriate
locations and in accordance with Applicable Foreign Aviation Law, and
such local aviation counsel shall issue an opinion as required under
Section 2 hereof.
36. LEASES AND CARRIER LOAN DOCUMENTS WARRANTIES, REPRESENTATIONS AND
COVENANTS. Each Grantor warrants, represents and covenants with the Agent that
the Secured Parties may rely on all statements or representations made by such
Grantor on or with respect to any Lease or Carrier Loan Document and that from
and after the date of this Security Agreement until the termination hereof in
accordance with Section 29 hereof;
(a) ENFORCEMENT. Without limiting the generality of Section
4(k) hereof, each Grantor jointly and severally agrees to diligently
perform all obligations on its part to be performed under each Lease
and all Carrier Loan Documents and to take actions to enforce such
Lease or Carrier Loan Documents in accordance with Section 7.21(b) of
the Credit Agreement. Each Grantor shall promptly notify the Agent if
any lessee or party to a Carrier Loan Document shall fail or be
delinquent to any extent in the performance thereof or there shall
occur any default under any Lease or Carrier Loan Document.
(b) NO WAIVER OF RIGHTS OR MODIFICATIONS. Without the Agent's
prior written consent, no Grantor will (i) grant any consent to a
lessee under a Lease or to a party to any of the Carrier Loan
Documents, (ii) agree to any material modification or amendment of a
Lease or any Carrier Loan Document, (iii) fail to deliver to the Agent
a copy of each material demand, notice or document received by it
relating in any way to any Lease, or any Carrier Loan Document, or (iv)
waive or fail to exercise promptly and diligently any material right
under any Lease or Carrier Loan Document (other than any right of
termination), unless (x) such Grantor provides the Agent with written
notice prior to such waiver, consent, modification or amendment, (y)
immediately after giving effect to such waiver, failure to act,
consent, modification, or amendment such Lease or Carrier Loan Document
remains an Eligible Lease or Eligible Carrier Loan Document, and (z) no
Default or Event of Default occurs under any Loan Document as a result
of such waiver, failure to act, consent, modification or waiver.
(c) RIGHTS OF INSPECTION. Without limitation of Section 4(a),
the Secured Parties shall have the same rights of inspection that each
Grantor is granted under the Leases or Carrier Loan Documents.
(d) GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of the
Accounts, Leases and Carrier Loan
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Documents to which it is a party to observe and perform all the
conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving
rise to each such Account and in accordance with and pursuant to the
terms and provisions of each such Lease or Carrier Loan Document. No
Secured Party shall have an obligation or liability under any Account
(or any agreement giving rise thereto) or under any Lease or any
Carrier Loan Document by reason of or arising out of this Security
Agreement, any Assignment of Lease, or any Assignment of Carrier Loan
Documents or the receipt by the Agent or any Secured Party of any
payment relating to such Account, Lease, or Carrier Loan Document
pursuant hereto, nor shall any Secured Party be obligated in any manner
to perform any of the obligations of any Grantor under or pursuant to
any Account (or any agreement giving rise thereto) or under or pursuant
to any Lease or Carrier Loan Document, to make any payment or to make
any inquiry as to the nature or the sufficiency of any performance by
any such party under any Account (or any agreement giving rise thereto)
or under any Lease or Carrier Loan Document;
(e) NO CONSENTS. No consent of any party (other than the
Grantors) to any Lease or Carrier Loan Document is required, or
purports to be required, in connection with the execution, delivery and
performance of this Security Agreement (other than consent which has
been obtained). Each Lease and Carrier Loan Document is in full force
and effect and constitutes a valid and legally enforceable obligation
of the parties thereto, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor's rights generally. No consent or
authorization of, filing with or other act by or in respect of any
governmental authority is required in connection with the execution,
delivery, performance, validity or enforceability of any of the Leases
or Carrier Loan Documents by any party thereto other than those which
have been duly obtained, made or performed, are in full force and
effect and do not subject the scope of any such agreement to any
material adverse limitation, either specific or general in nature. On
the date of each Advance, no Grantor nor (to any of the Grantor's best
knowledge) any other party to any Lease or Carrier Loan Document is in
default or is reasonably likely to become in default in the performance
or observance of any of the material terms thereof. Each Grantor has
fully performed all of its material obligations under each Lease and
Carrier Loan Document to which it is a party. The right, title and
interest of each Grantor in, to and under each Lease and Carrier Loan
Document is not subject to any defense, offset, counterclaim or claim
which would materially adversely affect the value of such Lease or
Carrier Loan Document as collateral, nor have any of the foregoing been
asserted or alleged against any of the Grantors as to any Lease or any
Carrier Loan Document;
(f) MINIMUM STANDARDS. The Leases and Carrier Loan Documents
shall contain provisions at least as restrictive as those set forth in
this Security Agreement with respect to insurance, maintenance,
registration, possession and use, record and reporting, inspection,
alteration, replacement, pooling conditions, airworthiness
certification, registration and regulatory requirements.
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37. INSURANCE REQUIRED.
(a) TYPE OF INSURANCE REQUIRED. Each Grantor will keep the
Collateral continuously insured against such risks as are customarily
insured against by businesses of like size and type engaged in the same
or similar operations including, without limiting the generality of any
other covenant herein contained:
(i) public liability insurance with respect to
Aircraft and Engines (including, without limitation of the
foregoing, passenger legal liability insurance), property
damage and bodily injury insurance and cargo liability
insurance, including, without limiting the generality of the
foregoing, coverage for aircraft liability, aircraft passenger
liability, aircraft property damage liability, contractual
liability (and to the extent such risk and perils are required
to be insured pursuant to the Credit Agreement or Section
11(a)(ii), war risk and allied perils) and any other type of
insurance required under the applicable laws and regulations
of the United States or the Applicable Foreign Jurisdiction,
all in the types and amounts which are usually carried by
prudent Persons owning or operating similar aircraft and
engines in similar situations and which covers risks of the
kind customarily insured against by such Persons, but in any
event in an amount not less than (A) $200,000,000 combined
single limit in the case of a narrow-bodied Aircraft and (B)
$400,000,000 combined single limit in the case of a
wide-bodied Aircraft for any one occurrence (with deductibles
not greater than $750,000 per occurrence); provided, however,
that the amount of cargo insurance may be less than the
amounts set forth in Sections 11(a)(i)(A) and (B) above so
long as the amount of cargo liability insurance maintained
with respect to Aircraft is at least equal to the amount of
cargo liability insurance maintained by prudent air carriers
operating the same or similar type of aircraft and; provided,
further, that during any period that an Aircraft or Engine is
on the ground and not in operation, (x) the amount of
insurance may be less than the amounts set forth in Sections
11(a)(i)(A) and (B) above so long as the amount of insurance
maintained with respect to grounded Aircraft and Engines is at
least equal to the amount of insurance maintained by prudent
air carriers with respect to grounded aircraft and engines of
the same or similar type, and (y) the scope of risks covered
and types of insurance may be less than the requirements set
forth in Section 11(a)(i) so long as they are at least equal
to those maintained by prudent air carriers with respect to
grounded aircraft and engines of the same or similar type.
(ii) all-risk aircraft ground and flight hull
insurance covering all Aircraft and Engines, including
all-risk coverage with respect to any Engine or Part while not
installed on an Aircraft. All such insurance shall be of the
type usually carried by prudent Persons operating the same or
similar type of aircraft and engines. Each Grantor shall
additionally maintain in effect at all times, at its own
expense, war risk, allied perils and hijacking (air piracy)
insurance (A) (in the case of an Aircraft or Engine subject to
a Lease or Carrier Loan Documents with a Rated Carrier) to the
extent such Rated Carrier maintains such insurance on other
aircraft or engines in its
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fleet that are operated on the same or similar routes by such
Rated Carrier and (B) (in the case of an Aircraft or Engine
subject to a Lease or Carrier Loan Documents with an Eligible
Carrier that is not a Rated Carrier) to the extent the
Aircraft or Engine is operated (1) on routes where the custom
is for international air carriers flying comparable routes to
carry such insurance, or (2) in any area designated by an
insurance company providing the coverage described herein as a
war zone, recognized area of hostilities, or an area
threatened with war or hostilities. Each Grantor shall
additionally maintain in effect at all times, at its own
expense, governmental confiscation (except by the government
of registry), nationalization, expropriation and restraint
insurance (X) (in the case of an Aircraft or Engine subject to
a Lease or Carrier Loan Documents with a Rated Carrier) to the
extent such Rated Carrier maintains such insurance on other
aircraft or engines in its fleet that are operated on the same
or similar routes by such Rated Carrier and (Y) (in the case
of an Aircraft or Engine subject to a Lease or Carrier Loan
Documents with an Eligible Carrier that is not a Rated
Carrier) to the extent the Aircraft or Engine is operated (1)
on routes over or through Qualified Countries or routes where
the custom is for international air carriers flying comparable
routes to carry such insurance or (2) in any area designated
by an insurance company providing the coverage described
herein as a war zone, recognized area of hostilities, or an
area threatened with war or hostilities.
Any insurance required under Section 11(a)(ii) with respect to an
Aircraft or Engine shall at all times while any Obligation is
outstanding be for an "agreed upon value" of not less than one hundred
ten percent (110%) of the Loan Value (subject to a deductible of not
more than $750,000 per occurrence). With respect to war and allied
risks, peril and hijacking insurance, and with respect to any
governmental confiscation, nationalization, expropriation or restraint
insurance in place with respect to an Aircraft or Engine, the Agent may
demand that such coverage be increased from time to time to the extent
that the aggregate limit under any policy is reduced or exhausted by
virtue of claims made under such policies providing coverage.
(b) POLICY PROVISIONS REQUIRED. Each insurance policy obtained
in satisfaction of the requirements of Section 11 hereof:
(i) shall be issued by such insurer (or insurers) as
shall be financially responsible, of recognized standing and
reasonably acceptable to the Agent;
(ii) shall be in such form and have such provisions
(including without limitation the loss payable clause, the
waiver of subrogation clause, the deductible amount, if any,
and the standard mortgagee endorsement clause), as are
generally considered standard provisions for the type of
insurance involved and are reasonably acceptable in all
respects to the Agent;
(iii) shall prohibit cancellation or substantial
modification, termination or lapse in coverage by the insurer
without prior written notice to the Agent of at least
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30 days (or with respect to war risk and allied perils
coverage, 7 days or such other period as may be customary in
the industry);
(iv) without limiting the generality of the
foregoing, all insurance policies where applicable under (A)
Section 11(a)(ii) carried on the Collateral shall name the
Agent, for the benefit of itself and the Lenders, as loss
payee and (B) Section 11(a)(i) shall name the Agent, for the
benefit of the Secured Parties, as additional assureds
thereunder in respect of any claim for payment;
(v) shall contain such other customary provisions
and endorsements as the Agent may reasonably require
(including, without limitation, a standard 50/50 claims
funding agreement between the all-risk and war coverages in
the event of a dispute as to which coverage is applicable);
(vi) shall provide that in respect of the interests
of the Agent under such insurance policies, such insurance
shall not be invalidated by any action or inaction of the
Applicable Borrower or Applicable Carrier or any other Person
and shall insure such interests of the Agent regardless of any
breach or violation of any warranty, declaration or condition
contained in such policies by the Applicable Borrower or
Applicable Carrier or any other Person;
(vii) shall be primary without right of contribution
from any other insurance which is carried by the Agent or any
Lender with respect to its interest in any Aircraft or Engine;
(viii) shall provide the coverage required under
this Section 11 at all times and whether or not the Aircraft
and Engines are in the possession and control of the Grantor,
an Applicable Carrier or any third party;
(ix) shall provide that all of the provisions
thereof, except the limits of liability, shall operate in the
same manner as if there were a separate policy covering each
insured and shall waive any rights of subrogation of the
insurers against the Agent or any Lender; and
(x) shall waive any right of the insurers to setoff,
recoupment, counterclaim or any other deduction in respect of
any liability of the Agent or any Lender;
(c) SELF-INSURANCE. Notwithstanding any other provision of
this Section 11, each Grantor may permit a Rated Carrier to self-insure
the risks required to be insured by this Section 11 under a program
applicable to all aircraft or engines (whether or not an Aircraft or
Engine) in such Rated Carrier's fleet, but in no case shall the
aggregate amount of self-insurance in regard to Section 11(a) exceed
for any calendar year, with respect to all of the aircraft or engines
(whether or not an Aircraft or Engine) in such Rated Carrier's fleet,
the
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lesser of (i) 50% of the highest replacement value of any single
aircraft in such Rated Carrier's fleet or (ii) 1.5% of the average
aggregate insurable value (during the preceding calendar year) of all
aircraft and engines (including the Aircraft and Engines) on which such
Rated Carrier carries insurance. In no case shall such Grantor permit
the Rated Carrier to discriminate as between insurance coverage on the
Aircraft and Engines and insurance which such Rated Carrier maintains
with respect to similar aircraft and engines owned or operated by such
Rated Carrier operating on similar routes in similar locations if such
discrimination would result in less insurance coverage on the Aircraft
and Engines than such Rated Carrier maintains with respect to similar
aircraft and engines owned or operated by such Rated Carrier operating
on similar routes in similar locations.
(d) REINSURANCE. To the extent that any Applicable Foreign
Jurisdiction requires that coverage be placed with a carrier in such
Applicable Foreign Jurisdiction that does not satisfy the requirements
of Section 11(b)(i), each Grantor shall maintain or cause to be
maintained with respect to the coverages required herein reinsurance
with insurers of internationally recognized financial responsibility
that do satisfy the requirements of Section 11(b)(i) in the full
coverage amounts required herein less the minimum coverage required by
law to be maintained in such Applicable Foreign Jurisdiction.
(e) INSURANCE CERTIFICATES REQUIRED. Each Grantor agrees to
furnish the Agent on or before the date of any Advance, an insurance
certificate signed by an independent insurance broker reasonably
acceptable to the Agent describing in reasonable detail the insurance
carried on the related Aircraft and Engine and certifying that such
insurance complies with the terms hereof and that such insurance
adequately protects the interests of the Agent. Prior to expiration of
any such policy, such Grantor shall furnish the Agent with the same
evidence required to be delivered on or prior to the date of any
Advance and otherwise satisfactory to the Agent that the policy or
certificate has been renewed or replaced or is no longer required by
this Agreement.
(f) POWER OF ATTORNEY. Each Grantor hereby irrevocably makes,
constitutes and appoints the Agent (and all officers, employees or
agents designated by the Agent), for the benefit of the Lenders,
effective upon the occurrence and during the continuance of an Event of
Default, as such Grantor's true and lawful attorney (and agent-in-fact)
for the purpose of making, settling and adjusting claims under such
policies of insurance, endorsing the name of such Grantor on any check,
draft, instrument or other item or payment for the proceeds of such
policies of insurance and for making all determinations and decisions
with respect to such policies of insurance.
(g) AGENT MAY ACT. In the event such Grantor (i) shall fail to
maintain, or fail to cause to be maintained, the full insurance
coverage required hereunder or (ii) shall fail to keep any of its
Collateral in good repair and good operating condition subject to
ordinary wear and tear (and in the case of an Aircraft or Engine
subject to a Lease or Carrier Loan Document, such failure to maintain
in good repair amounts to a default under such Lease or Carrier Loan
Document), then the Agent may (but shall be under no obligation to),
without waiving or
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releasing any Secured Obligation or Event of Default by such Grantor
hereunder, contract for the required policies of insurance and pay the
premiums on the same or make any required repairs, renewals and
replacements; and all sums so disbursed by Agent, including reasonable
attorneys' fees, court costs, expenses and other charges related
thereto, shall be payable on demand by such Grantor to the Agent and
shall be additional Secured Obligations secured by the Collateral.
(h) PAYMENT FOR UNINSURED LOSS. Each Grantor agrees that to
the extent that it shall not carry insurance required by Section 11(a)
hereof, it shall in the event of any loss or casualty pay promptly to
the Agent, for the benefit of the Secured Parties, for application in
accordance with the provisions of Section 11(h) hereof, such amount as
would have been received as Net Proceeds (as hereinafter defined) by
the Agent, for the benefit of the Secured Parties, under the provisions
of Section 11(h) hereof had such insurance been carried to the extent
required.
(i) APPLICATION OF INSURANCE PROCEEDS. The Net Proceeds of the
insurance carried pursuant to the provisions of Sections 11(a)(i) and
11(a)(ii) hereof shall be applied by such Grantor toward extinguishment
of the defect or claim or satisfaction of the liability with respect to
which such insurance proceeds may be paid.
(j) NET PROCEEDS. "Net Proceeds" when used with respect to any
insurance proceeds shall mean the gross proceeds from such proceeds,
award or other amount, less all taxes, fees and expenses (including
attorneys' fees) incurred in the realization thereof.
(k) NOTICE OF LOSS. In case of any material damage to or
destruction of all or any part of the Collateral pledged hereunder by a
Grantor, such Grantor shall give prompt notice thereof to the Agent.
Each such notice shall describe generally the nature and extent of such
damage, destruction, taking, loss, proceeding or negotiations. Each
Grantor is hereby authorized and empowered to adjust or compromise any
loss under any such insurance.
(l) LENDER INSURANCE. Nothing herein shall prevent any Secured
Party from maintaining additional insurance at its own expense;
provided that the maintenance of such insurance shall not prejudice the
Grantor's or any Applicable Carrier's ability to obtain, or recover
under, the insurance required under this Section 11 or materially
increase the costs thereof.
38. EVENTS OF LOSS; GOVERNMENTAL AUTHORITIES. Upon the occurrence of an
Event of Loss, the provisions of this Section 12 shall apply, govern and
control.
(a) EVENT OF LOSS WITH RESPECT TO AN ENGINE. Upon the
occurrence of an Event of Loss with respect to one or more Engines (but
not an Aircraft), the Grantor shall within three Business Days of the
Grantor's actual knowledge of such occurrence) give the Agent written
notice of such Event of Loss and shall comply with the terms of Section
12(a)(i).
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(i) REPLACEMENT OF ENGINES. As promptly as
practicable, and in any event on or before the Business Day
next preceding the 60th day following the date of occurrence
of such Event of Loss, the Grantor shall either (i) repay all
Obligations related to such Engine, or (ii) subject or cause
to be subjected to this Security Agreement in replacement
thereof, a replacement Engine which shall qualify as an
Eligible Engine and be free and clear of all Liens (other than
Permitted Liens) and which shall be of like kind and
equivalent value to, and which shall be in as good operating
condition as, the Engine so replaced (for such purpose, it
shall be assumed that such Engine was in the condition and
repair required by the terms hereof) and, following such
replacement, the replaced Engine shall be released from the
Lien created by this Security Agreement. If the Grantor shall
not perform its obligation to effect such replacement
hereunder during the period of time provided herein, such
failure shall be an Event of Default (subject to Section 9.6
of the Credit Agreement).
(ii) PAYMENT OF PRINCIPAL AND INTEREST AFTER EVENT
OF LOSS. No Event of Loss shall limit the obligation of the
Grantor to pay and perform the Secured Obligations.
(iii) CONDITIONS TO REPLACEMENT OF AN ENGINE. In
addition to the requirements contained in Section 12(a)(i),
the Grantor's obligation to replace an Engine as set forth in
Section 12(a)(i) shall include the obligation of the Grantor
to promptly, (all writings referred to below to be reasonably
satisfactory in form and substance to the Agent):
(A) furnish the Agent with such evidence of
title as the Agent may reasonably request (including,
without limitation, appropriate bills of sale);
(B) cause a Security Agreement Supplement
subjecting the replacement Engine to this Security
Agreement to be duly executed by an Authorized
Representative, and, upon such execution, to be filed
for recordation with the FAA pursuant to the FAA Act
or with the Applicable Foreign Jurisdiction under the
Applicable Foreign Aviation Law;
(C) furnish the Agent with such evidence of
compliance with the insurance provisions of Section
11 with respect to the replacement Engine, as may be
reasonably requested, including, without limitation,
insurance certificates confirming such compliance;
(D) furnish the Agent with appropriate UCC
financing statements in favor of the Agent with
respect to such replacement Engine, and cause such
financing statements to be filed in all appropriate
filing offices;
(E) furnish the Agent with an opinion of
counsel reasonably satisfactory to the Agent, to the
effect that good and marketable title to the
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replacement Engine has been duly vested in the
Grantor or that a first priority Lien has been
perfected in the Grantor's name free and clear of all
Liens (other than Permitted Liens) and with respect
to the effectiveness and priority of the interests
which this Security Agreement purports to create and
to such further effect as the Agent may reasonably
request;
(F) furnish the Agent with (i) in the case
of an Engine that is separately financed, an
appraisal from a Qualified Appraiser and (ii) in the
case of an Engine which is part of an Aircraft, a
certificate from a qualified aircraft engineer (which
may be an employee of the Applicable Carrier), in
either case, certifying that the replacement Engine
is of like kind and equivalent value to the Engine so
replaced (assuming the Engine was in the condition
and repair required by the terms hereof immediately
prior to the occurrence of such Event of Loss);
(G) furnish the Agent with an Officer's
Certificate stating (I) the model numbers of the
replacement Engine, and the name of the manufacturer
thereof, (II) that the replacement Engine is in good
operating condition and repair, is of a type
substantially similar to the Engine subject to such
Event of Loss (which engine shall in any event be
compatible with the other Engines or engines
installed on the airframe) and meets the requirements
of this Section 12(a)(iii), (III) that all conditions
precedent provided for in Section 12(a)(i) and this
Section 12(a)(iii) relating to such substitution have
been complied with, (IV) that immediately prior to
the subjection of such replacement Engine to the Lien
created by this Security Agreement it was free and
clear of all Liens other than Permitted Liens and
that the Lien created by this Security Agreement
thereon will constitute a valid and perfected first
priority Lien, free and clear of all other Liens,
other than Permitted Liens and (V) that all necessary
approvals, authorizations, consents, licenses,
certificates and orders of the United States or any
agency or instrumentality thereof and of any
Applicable Foreign Jurisdiction or any other
Governmental Authority or instrumentality having
jurisdiction have been duly obtained, and such
approvals, authorizations, consents, licenses,
certificates or orders are in full force and effect
and constitute sufficient authorization therefor; and
(H) furnish such other certificates or
documents related to Engines required under Section
5.1 of the Credit Agreement.
(b) EVENT OF LOSS WITH RESPECT TO AN AIRCRAFT. Upon the
occurrence of an Event of Loss with respect to an Aircraft, the Grantor
shall give the Agent prompt written notice (and in any event within 3
Business Days of the Grantor's actual knowledge of such occurrence)
thereof and shall, on or before the Business Day which is the earliest
of (i) the sixtieth (60th) day following the date of the occurrence of
such Event of Loss, or (ii) the next Business Day following the receipt
of insurance proceeds with respect to such occurrence or
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(iii) the maturity of any Note, pay to the Agent the Loss Value of such
Aircraft. In the event of payment in full by the Grantor of the Loss
Value and all other amounts then due and payable hereunder, the
Aircraft or Engine having suffered the Event of Loss shall be released
from this Agreement and the Agent shall execute and deliver such
instruments as may be reasonably required to evidence such release.
(c) REPLACEMENT OF ENGINES. If insurance proceeds are received
with respect to the Engine that has been or is being replaced (and
which by the terms of this Section 12 may be replaced) by the Grantor
pursuant to Section 12(a), such insurance proceeds shall be paid over
to, or retained by, the Agent, and at the time of such replacement in
accordance with Section 12.5(a) so much of such insurance proceeds
remaining after reimbursement of the Agent for costs and expenses (and
the Agent is hereby authorized to so apply such insurance proceeds to
such reimbursement) shall be paid over to the Grantor and as provided
for in Section 11.
(d) USE OF AIRCRAFT NOT CONSTITUTING AN EVENT OF LOSS. If
payments are received with respect to a requisition for use by any
Governmental Authority which does not constitute an Event of Loss under
clause (vii) of the definition thereof, such payments may be retained
by the Grantor.
(e) DEFAULT. Notwithstanding the foregoing provisions of this
Section 12, any payments received at any time by the Agent from any
Governmental Authority or other Person, whether or not with respect to
an Event of Loss, which are payable to the Grantor, shall not be paid
to the Grantor if at the time of such payment an Event of Default shall
have occurred and be continuing, in which event all such amounts shall
be paid to and held by the Agent as security for the Secured
Obligations of the Grantor hereunder and under the other Loan Documents
and applied by the Agent toward the payment of such Secured Obligations
as provided for in Section 9.5 of the Credit Agreement.
39. REMEDIES UPON EVENT OF DEFAULT. Upon and after an Event of Default,
the Agent shall have the following rights and remedies on behalf of the Secured
Parties in addition to any rights and remedies set forth elsewhere in this
Security Agreement or in any of the other Loan Documents or now or hereafter
existing at law or in equity or by statute, or otherwise, all of which may be
exercised with or, if allowed by law, without notice to a Grantor:
(a) All of the rights and remedies of a secured party under
the Uniform Commercial Code of the state where such rights and remedies
are asserted, or under other applicable law, all of which rights and
remedies shall be cumulative, and none of which shall be exclusive;
(b) The right to foreclose the Liens and security interests
created under this Security Agreement by any available judicial
procedure or without judicial process;
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(c) The right to (i) enter upon the premises of a Grantor
through self-help and without judicial process, without first obtaining
a final judgment or giving such Grantor notice and opportunity for a
hearing on the validity of the Agent's claim and without any obligation
to pay rent to such Grantor, or any other place or places where any
Collateral is located and kept, and remove the Collateral therefrom to
the premises of the Agent or any agent of the Agent, for such time as
the Agent may desire, in order effectively to collect or liquidate the
Collateral, and (ii) require such Grantor to assemble the Collateral
and make it available to the Agent at a place to be designated by the
Agent that is reasonably convenient to both parties;
(d) The right to (i) demand payment of the Accounts; (ii)
enforce payment of the Accounts, by legal proceedings or otherwise;
(iii) exercise all of a Grantor's rights and remedies with respect to
the collection of the Accounts, General Intangibles, Leases and
Contract Rights; (iv) settle, adjust, compromise, extend or renew the
Accounts, General Intangibles, Leases, and Contract Rights; (v) settle,
adjust or compromise any legal proceedings brought to collect the
Accounts; (vi) if permitted by applicable law, sell or assign the
Accounts, General Intangibles, Leases and Contract Rights upon such
terms, for such amounts and at such time or times as the Agent deems
advisable; (vii) discharge and release the Accounts; (viii) take
control, in any manner, of any item of payment or proceeds referred to
in Section 3 above; (ix) prepare, file and sign a Grantor's name on a
Proof of Claim in bankruptcy or similar document against any Account
Debtor; (x) prepare, file and sign a Grantor's name on any notice of
Lien, assignment or satisfaction of Lien or similar document in
connection with the Accounts; (xi) endorse the name of a Grantor upon
any chattel paper, document, instrument, invoice, freight bill, bill of
lading or similar document or agreement relating to the Collateral;
(xii) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to any
Collateral to which a Grantor has access; (xiii) to open such Grantor's
mail and collect any and all amounts due to such Grantor from Persons
obligated on any Accounts ("Account Debtors"); (xiv) to take over such
Grantor's post office boxes or make other arrangements as the Agent, on
behalf of the Lenders, deems necessary to receive such Grantor's mail,
including notifying the post office authorities to change the address
for delivery of such Grantor's mail to such address as the Agent, on
behalf of the Secured Parties, may designate; and (xv) to notify any or
all Account Debtors that the Accounts have been assigned to the Agent
for the benefit of the Secured Parties and that the Agent has a
security interest therein for the benefit of the Secured Parties
(provided that the Agent may at any time give such notice to an Account
Debtor that is a department, agency or authority of the United States
government); each Grantor hereby agrees that any such notice, in the
Agent's sole discretion, may be sent on such Grantor's stationery, in
which event such Grantor shall co-sign such notice with the Agent; and
(xvi) do all acts and things and execute all documents necessary, in
Agent's sole discretion, to collect the Accounts, Leases, Contract
Rights and General Intangibles; and
(e) The right to sell, assign, lease or to otherwise dispose
of all or any Collateral in its then existing condition, or after any
further manufacturing or processing thereof, at public or private sale
or sales, with such notice as may be required by law, in lots or in
bulk,
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for cash or on credit, with or without representations and warranties,
all as the Agent, in its sole discretion, may deem advisable. The Agent
shall have the right to conduct such sales on a Grantor's premises or
elsewhere and shall have the right to use a Grantor's premises without
charge for such sales for such time or times as the Agent may see fit.
The Agent may, if it deems it reasonable, postpone or adjourn any sale
of the Collateral from time to time by an announcement at the time and
place of such postponed or adjourned sale, and such sale may, without
further notice, be made at the time and place to which it was so
adjourned. Each Grantor agrees that the Agent has no obligation to
preserve rights to the Collateral against prior parties or to marshall
any Collateral for the benefit of any Person. The Agent is hereby
granted a license or other right to use, without charge, each Grantor's
labels, patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any Collateral and a
Grantor's rights under any license and any franchise agreement shall
inure to the Agent's benefit. If any of the Collateral shall require
repairs, maintenance, preparation or the like, or is in process or
other unfinished state, the Agent shall have the right, but shall not
be obligated, to perform such repairs, maintenance, preparation,
processing or completion of manufacturing for the purpose of putting
the same in such saleable form as the Agent shall deem appropriate, but
the Agent shall have the right to sell or dispose of the Collateral
without such repairs, maintenance, preparation or processing and no
Grantor shall have any claim against the Agent for the value that may
have been added to such Collateral with such repair, maintenance,
preparation or processing. In addition, each Grantor agrees that in the
event notice is necessary under applicable law, written notice mailed
to such Grantor in the manner specified herein ten (10) days prior to
the date of public sale of any of the Collateral or prior to the date
after which any private sale or other disposition of the Collateral
will be made shall constitute commercially reasonable notice to such
Grantor. All notice is hereby waived with respect to any of the
Collateral which threatens to decline speedily in value or is of a type
customarily sold on a recognized market. The Agent may purchase all or
any part of the Collateral at public or, if permitted by law, private
sale, free from any right of redemption which is hereby expressly
waived by such Grantor and, in lieu of actual payment of such purchase
price, may set off the amount of such price against the Secured
Obligations. The net cash proceeds resulting from the collection,
liquidation, sale, lease or other disposition of the Collateral shall
be applied first to the expenses (including all attorneys' fees) of
retaking, holding, storing, processing and preparing for sale, selling,
collecting, liquidating and the like, and then to the satisfaction of
all Secured Obligations in accordance with the terms of Section 9.5 of
the Credit Agreement. Any sale or other disposition of the Collateral
and the possession thereof by the Agent shall be in compliance with all
provisions of applicable law (including applicable provisions of the
Uniform Commercial Code). Each Grantor shall be liable to the Agent,
for the benefit of the Secured Parties, and shall pay to the Agent, for
the benefit of the Secured Parties, on demand any deficiency which may
remain after such sale, disposition, collection or liquidation of the
Collateral.
(f) Each Grantor recognizes that the Agent may be unable to
effect a public sale of all or a part of the Collateral consisting of
securities by reason of certain prohibitions
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contained in the Securities Act of 1933, but may be compelled to resort
to one or more private sales to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire such
securities for their own account, for investment and not with a view to
the distribution or resale thereof. Each Grantor agrees that any such
private sales may be at prices and other terms less favorable to the
seller than if sold at public sales and that such private sales shall
be deemed to have been made in a commercially reasonable manner. The
Agent has no obligation to delay sale of any such securities for the
period of time necessary to permit the issuer of such securities, even
if such issuer would agree, to register such securities for public sale
under the Securities Act of 1933.
40. ANTI-MARSHALLING PROVISIONS. The right is hereby given by each
Grantor to the Agent, for the benefit of the Secured Parties, to make releases
(whether in whole or in part) of all or any part of the Collateral agreeable to
the Agent without notice to, or the consent, approval or agreement of other
parties and interests, including junior lienors, which releases shall not impair
in any manner the validity of or priority of the Liens and security interests in
the remaining Collateral conferred under such documents, nor release such
Grantor from personal liability for the Secured Obligations hereby secured.
Notwithstanding the existence of any other security interest in the Collateral
held by the Agent, for the benefit of the Secured Parties, the Agent shall have
the right to determine the order in which any or all of the Collateral shall be
subjected to the remedies provided in this Agreement. The proceeds realized upon
the exercise of the remedies provided herein shall be applied by the Agent, for
the benefit of the Secured Parties, in the manner provided in Section 9.5 of the
Credit Agreement. Each Grantor hereby waives any and all right to require the
marshalling of assets in connection with the exercise of any of the remedies
permitted by applicable law or provided herein.
41. INDEMNITY AND EXPENSES.
(a) Without limiting the generality of Section 11.9 of the
Credit Agreement, each Grantor agrees to indemnify the Agent and each
Secured Party, from and against any and all claims, losses and
liabilities growing out of or resulting from this Security Agreement
that are incurred by the Agent or any Secured Party (including without
limitation enforcement of this Security Agreement), except claims,
losses or liabilities directly resulting from the gross negligence or
willful misconduct of such Person seeking indemnification hereunder.
(b) Each Grantor will upon demand pay to the Agent, for the
benefit of the Secured Parties, the amount of any and all reasonable
expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, that the Agent, for the benefit
of the Lenders, may incur in connection with (i) the administration of
this Security Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from or other realization
upon, any of the Collateral, (iii) the exercise or enforcement of any
of the rights of the Secured Parties, or (iv) the failure by such
Grantor to perform or observe any of the provisions hereof.
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42. APPOINTMENT OF AGENT AS GRANTOR'S LAWFUL ATTORNEY. Without
limitation of any other provision of this Security Agreement, each Grantor
irrevocably designates, makes, constitutes and appoints the Agent (and all
Persons designated by the Agent), for the benefit of the Secured Parties, as the
Grantor's true and lawful attorney (and agent-in-fact) at all times on and after
the occurrence and during the continuation of an Event of Default, to take all
actions and to do all things required to be taken or done by the Grantor under
this Security Agreement, including without limitation:
(a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (a)
above;
(c) to endorse such Grantor's name on any checks, notes,
drafts or any other payment relating to or constituting proceeds of the
Collateral which comes into the Agent's possession or Agent's control,
and deposit the same to the account of the Agent, for the benefit of
the Secured Parties, on account and for payment of the Secured
Obligations.
(d) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of the Agent, for the benefit of the Secured Parties, with respect to
any of the Collateral; and
(e) to execute, in connection with the sale provided for in
Section 12, any endorsement, assignments, or other instruments of
conveyance or transfer with respect to the Collateral.
All acts of the Agent or its designee taken pursuant to this Section 16 are
hereby ratified and confirmed by each Grantor and the Agent or its designee
shall not be liable for any acts of omission or commission nor for any error of
judgment or mistake of fact or law, other than as a result of its gross
negligence or willful misconduct. This power, being coupled with an interest, is
irrevocable by such Grantor until this Agreement has been terminated in
accordance with Section 29 hereof.
43. WAIVERS. In addition to the other waivers contained herein, each
Grantor hereby expressly waives, to the extent permitted by law: presentment for
payment, demand, protest, notice of demand, notice of protest, notice of default
or dishonor, notice of payments and nonpayments and all other notices and
consents to any action taken by the Agent unless expressly required by this
Agreement or any other Loan Document.
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44. TRADE NAMES. Each Grantor represents that the only trade name(s) or
style(s) used by such Grantor are as set forth on Schedule E, next to the name
of such Grantor.
45. ABSOLUTE RIGHTS AND OBLIGATIONS. All rights of the Secured Parties
in the Collateral granted hereunder, and each of the Secured Obligations, shall
be absolute and unconditional irrespective of:
(a) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to departure from, the
Credit Agreement or any other Loan Document, including, but not limited
to, (i) an increase or decrease in the Secured Obligations and (ii) an
amendment of any Loan Document to permit the Agent or the Lenders or
any one or more of them to extend further or additional credit to any
Borrower in any form including credit by way of loan, purchase of
assets, guarantee or otherwise, which credit shall thereupon be and
become subject to the Credit Agreement and the other Loan Documents as
a Secured Obligation;
(b) any taking and holding of collateral or guarantees
(including without limitation any collateral pledged as security for
the Secured Obligations under the other Security Instruments) for all
or any of the Secured Obligations; or any amendment, alteration,
exchange, substitution, transfer, enforcement, waiver, subordination,
termination or release of any such collateral or guarantees, or any
non-perfection of any such collateral, or any consent to departure from
any such guaranty;
(c) any manner of application of collateral, or proceeds
thereof, securing payment or enforcement of all or any of the Secured
Obligations, or the manner of sale of any such collateral;
(d) any consent by the Secured Parties to the change,
restructure or termination of the corporate structure or existence of
any Borrower or any Grantor and any corresponding restructure of the
Secured Obligations, or any other restructure or refinancing of the
Secured Obligations or any portion thereof;
(e) any modification, compromise, settlement or release by the
Secured Parties, by operation of law or otherwise, collection or other
liquidation of the Secured Obligations or the liability of any
Borrower, any Grantor or any guarantor, or of any collateral for the
Secured Obligations (including without limitation any collateral
pledged as security for the Secured Obligations under the other
Security Instruments), in whole or in part, and any refusal of payment
by the Agent or any Lender in whole or in part, from any obligor or
guarantor in connection with any of the Secured Obligations, whether or
not with notice to, or further assent by, or any reservation of rights
against, any Grantor; or
(f) any other circumstance (including without limitation any
statute of limitations) that might otherwise constitute a defense
available to, or a discharge of, any Borrower, any Grantor or any
guarantor.
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The granting of a Security Interest in the Collateral shall continue to
be effective or be reinstated, as the case may be, if at any time any payment of
any of the Secured Obligations is rescinded or must otherwise be returned by any
Secured Party, upon the insolvency, bankruptcy or reorganization of any Borrower
or any Grantor or otherwise, all as though such payment had not been made.
46. DEFINITIONS. All terms used herein shall be defined in accordance
with the appropriate definitions appearing in the Uniform Commercial Code as in
effect in Florida, and such definitions are hereby incorporated herein by
reference and made a part hereof.
47. ENTIRE AGREEMENT. This Security Agreement, together with the Credit
Agreement and other Loan Documents, constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, inducements,
commitments or conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms hereof.
Neither this Security Agreement nor any portion or provision hereof may be
changed, altered, modified, supplemented, discharged, canceled, terminated, or
amended orally or in any manner other than by an agreement, in writing signed by
the parties hereto.
48. FURTHER ASSURANCES. Each Grantor agrees at its own expense to do
such further acts and things, and to execute and deliver such additional
conveyances, assignments, financing statements, agreements and instruments, as
the Agent may at any time reasonably request in connection with the
administration or enforcement of this Security Agreement or related to the
Collateral or any part thereof or in order better to assure and confirm unto the
Agent its rights, powers and remedies for the benefit of the Secured Parties
hereunder. Each Grantor hereby consents and agrees that the issuers of or
obligors in respect of the Collateral shall be entitled to accept the provisions
hereof as conclusive evidence of the right of the Agent, on behalf of the
Secured Parties, to exercise its rights hereunder with respect to the
Collateral, notwithstanding any other notice or direction to the contrary
heretofore or hereafter given by any Grantor or any other Person to any of such
issuers or obligors.
49. BINDING AGREEMENT; ASSIGNMENT. This Security Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and inure to the
benefit of the parties hereto, and to their respective successors and assigns,
except that no Grantor shall be permitted to assign this Security Agreement or
any interest herein or in the Collateral, or any part thereof, or otherwise
pledge, encumber or grant any option with respect to the Collateral, or any part
thereof, or any cash or property held by the Agent as Collateral under this
Security Agreement. All references herein to the Agent shall include any
successor thereof, each Lender and any other obligees from time to time of the
Obligations.
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50. SWAP AGREEMENTS. All obligations of any Borrower to any Lender or
affiliate of a Lender under Swap Agreements shall be deemed to be Secured
Obligations secured hereby (in each case unless otherwise agreed in writing by
such Lender or affiliate of a Lender), and each Lender or affiliate of a Lender
party to any such Swap Agreement shall be deemed to be a Secured Party
hereunder.
51. SEVERABILITY. The provisions of this Security Agreement are
independent of and separable from each other. If any provision hereof shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision hereof,
but this Security Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
52. SUCCESSORS AND ASSIGNS. This Security Agreement shall be binding
upon the successors and assigns of each Grantor, and the right, remedies,
powers, and privileges of the Agent hereunder shall inure to the benefit of the
successors and assigns of the Agent; provided, however, that no Grantor shall
make any assignment hereof without the prior written consent of the Agent.
53. COUNTERPARTS. This Security Agreement may be executed in any number
of counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
54. REMEDIES CUMULATIVE. All remedies hereunder are cumulative and are
not exclusive of any other rights and remedies of the Agent provided by law or
under the Credit Agreement, the other Loan Documents, or other applicable
agreements or instruments. The making of the Loans to the Borrowers pursuant to
the Credit Agreement and the extension of the Revolving Credit Facility to the
Borrowers pursuant to the Credit Agreement shall be conclusively presumed to
have been made or extended, respectively, in reliance upon each Grantor's
assignment of the Collateral pursuant to the terms hereof. No delay or omission
of the Agent to exercise any of its rights, remedies or powers hereunder or
under the Loan Documents shall impair any such right, remedy or power or shall
be construed to be a waiver thereof; and every right, power and remedy given by
this Security Agreement or any Loan Document to the Agent, may be exercised from
time to time and as often as may be deemed expedient.
55. TERMINATION. This Security Agreement and all obligations of each
Grantor hereunder shall terminate on the Facility Termination Date, at which
time the Liens and rights granted to the Agent for the benefit of the Secured
Parties hereunder shall automatically terminate and no longer be in effect, and
the Collateral shall automatically be released from the Liens created hereby;
provided that the obligation of any particular Grantor hereunder shall
terminate, and the Liens and rights granted to the Agent with respect to
Collateral owned by such Grantor shall be released, in accordance with Section
2.14 of the Credit Agreement. Upon such termination of this Agreement, the Agent
shall, at the sole expense of the Grantors, reassign and redeliver to each
applicable Grantor such Collateral then held by or for the Agent and execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
and take such further actions as may be necessary to effect the same and as
shall be reasonably acceptable to the Agent.
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<PAGE> 208
56. NOTICES. Any notice required or permitted hereunder shall be given,
(a) with respect to any Grantor, at such Grantor's address indicated in Section
11.2 of the Credit Agreement and (b) with respect to the Agent or a Lender, at
the Agent's address indicated in Section 11.2 of the Credit Agreement. All such
notices shall be given and shall be effective as provided in Section 11.2 of the
Credit Agreement.
57. GOVERNING LAW; VENUE; WAIVER OF TRIAL BY JURY.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED,
IN SUCH STATE.
(b) EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF DADE,
STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH GRANTOR EXPRESSLY WAIVES ANY OBJECTION
THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE OR TO THE
JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND IRREVOCABLY
SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) EACH GRANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH GRANTOR
PROVIDED BY SECTION 11.2 OF THE CREDIT AGREEMENT, OR BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF FLORIDA.
(e) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS IN THE COURTS OF ANY PLACE WHERE EACH GRANTOR OR ANY OF
SUCH GRANTOR'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE
EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH
GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
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<PAGE> 209
COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH GRANTOR AND THE
AGENT ON BEHALF OF THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY AND EACH PARTY HEREBY WAIVES, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE
THAT EACH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
58. DISCLAIMER. EACH OF THE GRANTORS UNCONDITIONALLY AGREES THAT NO
CONDITION, WARRANTY OR REPRESENTATION OF ANY KIND HAS BEEN MADE OR IS GIVEN BY
ANY SECURED PARTY OR ITS DIRECTORS, EMPLOYEES, SERVANTS OR AGENTS IN RESPECT OF
THE AIRWORTHINESS, CONDITION, DESIGN, MERCHANTABILITY OR FITNESS FOR USE OR
OPERATION OF ANY AIRCRAFT OR ENGINE, AND ALL CONDITIONS, WARRANTIES AND
REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION
TO ANY OF THOSE MATTERS, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, ARE
EXPRESSLY DISCLAIMED.
[SIGNATURE PAGES FOLLOW]
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<PAGE> 210
IN WITNESS WHEREOF, the undersigned have executed or caused this
Security Agreement to be executed on the day and year first written above.
______________, not in its
individual capacity except
as expressly stated in the
Credit Agreement, but
solely as Trustee under
Trust Agreement (_______)
WITNESS:
By:________________________________________
_____________________ Name:______________________________________
Title:_____________________________________
_____________________
AIRCRAFT _______, INC., as Beneficial Owner
WITNESS:
By:________________________________________
_____________________ Name:______________________________________
Title:_____________________________________
_____________________
Signature Page 1 of 2
<PAGE> 211
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
WITNESS:
By:________________________________
_____________________ Name:______________________________
Title: ____________________________
_____________________
Signature Page 2 of 2
<PAGE> 212
SCHEDULE A
[Reserved]
A-1
<PAGE> 213
SCHEDULE B
Jurisdictions for Filing UCC-1 Financing Statements
B-1
<PAGE> 214
SCHEDULE C-1
Form of Assignment of Lease
ASSIGNMENT OF LEASE
THIS ASSIGNMENT OF LEASE (this "Assignment"), dated as of ___________,
____, 19__ is made by and between _______________________ (the "Assignor") and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States, as Agent (the "Agent") for each of
the financial institutions (the "Lenders" and collectively with the Agent, the
"Secured Parties") now or hereafter party to the Credit Agreement (as defined
below). All capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have agreed to provide a revolving credit
facility to First Security Bank, National Association (the "Initial Borrower"),
solely as Trustee on behalf of the trust created by that certain Trust Agreement
(11111) dated June ___, 1998 between First Security Bank, National Association
and Aircraft 11111, Inc., and certain UniCapital Subsidiary Trusts and
UniCapital Special Purpose Corporations designated as Borrowing Affiliates under
the Credit Agreement (the Initial Borrower and such Borrowing Affiliates are
hereinafter referred to as a "Borrower" or collectively as the "Borrowers"), the
Agent and the Lenders party thereto (as from time to time amended, revised,
modified, supplemented or amended and restated, the "Credit Agreement"); and
WHEREAS, the Assignor is either a Borrower or a direct, wholly-owned
Subsidiary of a Borrower; and
WHEREAS, the Assignor is a party to that certain Mortgage and Security
Agreement dated as of _____ __, 19__ (as from time to time amended, revised,
modified, supplemented or amended and restated, the "Security Agreement")
between the Assignor and the Agent[, which Security Agreement was recorded with
the Federal Aviation Administration (the "FAA") on ____ ___, 19__ and assigned
FAA conveyance number ]; and
WHEREAS, the Assignor is required under the terms of the Security
Agreement and the Credit Agreement to assign to the Agent for the benefit of the
Secured Parties (a) the [Engine][Aircraft] Lease Agreement which is attached to
this Assignment as Exhibit A and all amendments, supplements, schedules,
receipts and acceptance certificates executed or delivered pursuant thereto (the
"Assigned Lease") and (b) the Assignment of Lease executed by ____________ (the
"Sublease Assignment") in the Assignor's favor (a copy of the Sublease
Assignment is attached to this Assignment as Exhibit B) and any other assignment
of lease executed in the Assignor's favor
C-1-1
<PAGE> 215
with respect to any further lease or sublease of the [Engine][Aircraft] or any
other property which is the subject of the Assigned Lease; and
WHEREAS, a material part of the consideration given in connection with
and as an inducement to the execution and delivery of the Credit Agreement by
the Agent and the Lenders was the obligation of the Borrowers to cause the
Assignor to grant to the Agent for the benefit of the Secured Parties a security
interest in the Assigned Lease;
NOW, THEREFORE, the Assignor hereby agrees as follows with the Agent
for the benefit of the Secured Parties:
1. The Assignor hereby bargains, sells, transfers and conveys to the
Agent, for the benefit of the Secured Parties, and grants to the Agent for the
benefit of the Secured Parties, (a) a first priority security interest in and to
the Assigned Lease, and all amendments, supplements, schedules, receipts and
acceptance certificates executed or delivered pursuant thereto, together with
all of the Assignor's rights as lessor thereunder including without limitation:
(i) all rights, if any, under Section 1110 of the Bankruptcy Code of the United
States or any statute of similar import (whether of the United States or any
other jurisdiction and whether now in effect or hereinafter enacted); (ii) all
rights to receive payment of insurance proceeds and payments with respect to any
Manufacturer's Warranty, in each case payable with respect to the [Engine]
[Aircraft] or other property which is the subject of the Assigned Lease; and
(iii) upon the occurrence of an Event of Default to demand, collect, receive and
retain all rent and other sums which may from time to time become payable under
or in connection with the Assigned Lease, and (b) the Sublease Assignment and
any other assignment of lease executed in the Assignor's favor with respect to
any further lease or sublease of the [Engine][Aircraft] or any other property
which is the subject of the Assigned Lease.
2. The Assigned Lease is attached hereto and is being filed for
recordation with the Federal Aviation Administration of the United States or any
Applicable Foreign Jurisdiction simultaneously herewith.
3. The Assignor represents and warrants that:
(a) The Assigned Lease is an Eligible Lease;
(b) The Assigned Lease is in full force and effect;
(c) On the date of each Advance related to the [Aircraft]
[Engine] subject to the Assigned Lease, there has occurred no event
under the Assigned Lease which constitutes an event of default or, to
the best knowledge of the Assignor a default, thereunder or which with
the giving of notice or lapse of time or both would constitute an event
of default thereunder;
(d) No rent or other sum payable under the Assigned Lease has
been prepaid;
C-1-2
<PAGE> 216
(e) The Assigned Lease is the entire agreement of lease with
respect to the [Engine] [Aircraft] and other property which are the
subject thereof and the Assigned Lease has not been amended,
supplemented, or modified nor has any provision thereof been waived by
either party thereto (except as attached hereto);
(f) By this assignment, the Agent assumes none of the
obligations of the lessor under the Assigned Lease and the lessor shall
remain solely responsible for the performance of each and every term
and provision of the Assigned Lease on its part to be performed; and
(g) The [Engine] [Aircraft] leased pursuant to the Assigned
Lease is listed on a Security Agreement Supplement and the Agent has a
duly perfected first priority security interest therein (subject to no
other Liens except Permitted Liens); and
(h) Upon the occurrence and continuation of an Event of
Default and in addition to any other rights and remedies provided in
any of the Loan Documents or arising by operation of law, the Agent may
send notice to the lessee under the Assigned Lease demanding that such
lessee perform all obligations required to be performed thereunder
including, but not limited to, the obligation to pay all rent and other
sums which may thereafter become payable under the Assigned Lease,
solely to and for the benefit of the Agent to the exclusion of the
Assignor and any other party who may claim entitlement to the payment
thereof.
IN WITNESS WHEREOF, the undersigned have executed or caused this
Assignment to be executed on the day and year first written above.
ASSIGNOR:
WITNESS:
By:_______________________________
______________________ Name:_____________________________
Title:____________________________
______________________
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
WITNESS:
By:_______________________________
______________________ Name:_____________________________
Title:____________________________
______________________
C-1-3
<PAGE> 217
THE LESSEE ACKNOWLEDGES AND CONSENTS to the foregoing terms and provisions this
___ day of _____, 19___.
[NAME OF LESSEE]
WITNESS:
By:_______________________________
______________________ Name:_____________________________
Title:____________________________
______________________
C-1-4
<PAGE> 218
EXHIBIT A
Assigned Lease
C-1-5
<PAGE> 219
EXHIBIT B
Sublease Assignment
C-1-6
<PAGE> 220
SCHEDULE C-2
Form of Assignment of Carrier Loan Documents
ASSIGNMENT OF CARRIER LOAN DOCUMENTS
THIS ASSIGNMENT OF CARRIER LOAN DOCUMENTS (this "Assignment"), dated as
of ___________, ____, 19__ is made by and between _______________ (the
"Assignor") and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States, as Agent
(the "Agent") for each of the financial institutions (the "Lenders" and
collectively with the Agent, the "Secured Parties") now or hereafter party to
the Credit Agreement (as defined below). All capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed thereto in
the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have agreed to provide a revolving credit
facility to First Security Bank, National Association (the "Initial Borrower"),
solely as Trustee on behalf of the trust created by that certain Trust Agreement
(11111) dated June ___, 1998 between First Security Bank, National Association
and Aircraft 11111, Inc., and certain UniCapital Subsidiary Trusts and
UniCapital Special Purpose Corporations designated as Borrowing Affiliates under
the Credit Agreement (the Initial Borrower and such Borrowing Affiliates are
hereinafter referred to as a "Borrower" or collectively as the "Borrowers"), the
Agent and the Lenders party thereto (as from time to time amended, revised,
modified, supplemented or amended and restated, the "Credit Agreement"); and
WHEREAS, the Assignor is either a Borrower or a direct, wholly-owned
Subsidiary of a Borrower; and
WHEREAS, the Assignor is a party to that certain Mortgage and Security
Agreement dated as of____ ___, 19__ (as from time to time amended, revised,
modified, supplemented or amended and restated, the "Security Agreement")
between the Assignor and the Agent[, which Security Agreement was recorded with
the Federal Aviation Administration (the "FAA") on ___ ___, ____ and assigned
FAA conveyance number ]; and
WHEREAS, the Assignor is required under the terms of the Security
Agreement and the Credit Agreement to assign to the Agent for the benefit of the
Secured Parties the Carrier Loan Documents which are attached to this Assignment
as Exhibit A and all amendments, supplements, schedules, receipts and acceptance
certificates executed or delivered pursuant thereto (the "Assigned Carrier Loan
Documents"); and
WHEREAS, a material part of the consideration given in connection with
and as an inducement to the execution and delivery of the Credit Agreement by
the Agent and the Lenders was
C-2-1
<PAGE> 221
the obligation of the Borrowers to cause the Assignor to grant to the Agent for
the benefit of the Secured Parties a security interest in the Assigned Carrier
Loan Documents;
NOW, THEREFORE, the Assignor hereby agrees as follows with the Agent
for the benefit of the Secured Parties:
1. The Assignor hereby bargains, sells, transfers and conveys to the
Agent, for the benefit of the Secured Parties, and grants to the Agent for the
benefit of the Secured Parties, a first priority security interest in and to the
Assigned Carrier Loan Documents, and all amendments, supplements, schedules,
receipts and acceptance certificates executed or delivered pursuant thereto,
together with all of the Assignor's rights as lessor thereunder including
without limitation: (i) all rights, if any, under Section 1110 of the Bankruptcy
Code of the United States or any statute of similar import (whether of the
United States or any other jurisdiction and whether now in effect or hereinafter
enacted); (ii) all rights to receive payment of insurance proceeds and payments
with respect to any Manufacturer's Warranty, in each case payable with respect
to the [Engine] [Aircraft] or other property which is the subject of the
Assigned Carrier Loan Documents; and (iii) upon the occurrence of an Event of
Default to demand, collect, receive and retain all rent and other sums which may
from time to time become payable under or in connection with the Assigned
Carrier Loan Documents.
2. The Assigned Carrier Loan Documents are attached hereto and are
being filed for recordation with the Federal Aviation Administration of the
United States and any Applicable Foreign Jurisdiction simultaneously herewith.
3. The Assignor represents and warrants that:
(a) The Assigned Carrier Loan Documents are Eligible Carrier
Loan Documents;
(b) The Assigned Carrier Loan Documents are in full force
and effect;
(c) On the date of each Advance related to the [Aircraft]
[Engine] subject to the Assigned Carrier Loan Documents, there has
occurred no event under the Assigned Carrier Loan Documents which
constitutes an event of default, or to the best knowledge of the
Assignor a default, thereunder or which with the giving of notice or
lapse of time or both would constitute an event of default thereunder;
(d) No principal, interest or other sum payable under the
Assigned Carrier Loan Documents has been prepaid unless (i) such
acceleration or prepayment occurred prior to the date of any Loan
relating to the [Aircraft][Engine] and (ii) after giving effect to such
acceleration or prepayment, the remaining outstanding principal amount
under the Assigned Carrier Loan Documents is greater than the amount of
the Loans under the Credit Agreement with respect to the
[Aircraft][Engine];
(e) The Assigned Carrier Loan Documents are the entire
agreement with respect to the financing of the [Engine] [Aircraft] and
other property which are the subject thereof
C-2-2
<PAGE> 222
and no Assigned Carrier Loan Document has been amended, supplemented,
or modified nor has any provision thereof been waived by either party
thereto (except as attached hereto);
(f) By this assignment, the Agent assumes none of the
obligations of the Assignor under any Assigned Carrier Loan Document
and the Assignor shall remain solely responsible for the performance of
each and every term and provision of each Assigned Carrier Loan
Document on its part to be performed; and
(g) The [Engine] [Aircraft] financed pursuant to the Assigned
Carrier Loan Documents is listed on a Security Agreement Supplement and
the Assignor has a duly perfected first priority security interest
therein (subject to no other Liens except Permitted Liens) which
security interest has been duly assigned to the Agent for the benefit
of the Secured Parties; and
(h) Upon the occurrence and continuation of an Event of
Default and in addition to any other rights and remedies provided in
any of the Loan Documents or arising by operation of law, the Agent may
send notice to the debtor under the Assigned Carrier Loan Documents
demanding that such debtor perform all obligations required to be
performed thereunder including, but not limited to, the obligation to
pay all principal, interest, fees and other sums which may thereafter
become payable under the Assigned Carrier Loan Documents, solely to and
for the benefit of the Agent to the exclusion of the Assignor and any
other party who may claim entitlement to the payment thereof.
IN WITNESS WHEREOF, the undersigned have executed or caused this
Assignment to be executed on the day and year first written above.
ASSIGNOR:
WITNESS:
By:_______________________________
______________________ Name:_____________________________
Title:____________________________
______________________
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
WITNESS:
By:_______________________________
______________________ Name:_____________________________
Title:____________________________
______________________
C-2-3
<PAGE> 223
THE DEBTOR ACKNOWLEDGES AND CONSENTS to the foregoing terms and provisions this
___ day of _____, 19___.
[NAME OF DEBTOR]
WITNESS:
By:_______________________________
______________________ Name:_____________________________
Title:____________________________
______________________
C-2-4
<PAGE> 224
EXHIBIT A
Assigned Carrier Loan Documents
C-2-5
<PAGE> 225
SCHEDULE C-3
Form of Assignment of Lease to Applicable Borrower
ASSIGNMENT OF LEASE
THIS ASSIGNMENT OF LEASE (this "Assignment"), dated as of ___________,
____, 19__ is made by and between _______________________ (the "Assignor") and
__________________________, [a ____________ corporation] [not in its individual
capacity but solely as Trustee on behalf of the trust created by that certain
Trust Agreement ______ dated _______ ___, _____ between First Security Bank,
National Association and ___________] (the "Applicable Borrower"). All
capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Applicable Borrower is a party to that certain Credit
Agreement dated June 10, 1998 by and among NationsBank, National Association, a
national banking association organized and existing under the laws of the United
States, as agent (the "Agent"), each of the financial institutions party thereto
(the "Lenders"), and First Security Bank, National Association (the "Initial
Borrower"), solely as Trustee on behalf of the trust created by that certain
Trust Agreement (11111) dated June 9, 1998 between First Security Bank, National
Association and Aircraft 11111, Inc., certain UniCapital Subsidiary Trusts and
certain UniCapital Special Purpose Corporations designated as Borrowing
Affiliates thereunder (the Initial Borrower and such Borrowing Affiliates are
hereinafter referred to as a "Borrower" or collectively as the "Borrowers"), (as
from time to time amended, revised, modified, supplemented or amended and
restated, the "Credit Agreement"); and
WHEREAS, the Assignor is an Applicable Intermediary (as defined in the
Credit Agreement); and
WHEREAS, the Assignor is a party to that certain Guaranty Agreement
dated as of ___________ ___, 19___ (as from time to time amended, revised,
modified, supplemented or amended and restated, the "Guaranty Agreement")
between the Assignor and the Agent, pursuant to which the Assignor has
guaranteed the Borrowers' Obligations under the Credit Agreement; and
WHEREAS, the Assignor is a party to that certain Mortgage and Security
Agreement dated as of ________ ____, 19___ (as from time to time amended,
revised, modified, supplemented or amended and restated, the "Security
Agreement") between the Assignor and the Agent, pursuant to which the Assignor
has granted to the Agent for the benefit of the Lenders a security interest in
all of its personal property and assets; and
C-3-1
<PAGE> 226
WHEREAS, the Assignor is required under the terms of the Security
Agreement and the Credit Agreement to assign to the Applicable Borrower the
[Engine][Aircraft] Lease Agreement which is attached to this Assignment as
Exhibit A and all amendments, supplements, schedules, receipts and acceptance
certificates executed or delivered pursuant thereto (the "Assigned Lease"); and
WHEREAS, a material part of the consideration given in connection with
and as an inducement to the execution and delivery of the Credit Agreement by
the Agent and the Lenders was the obligation of the Borrowers to cause the
Assignor to grant to the Applicable Borrower a security interest in the Assigned
Lease;
NOW, THEREFORE, the Assignor hereby agrees as follows with the
Applicable Borrower:
1. The Assignor hereby bargains, sells, transfers and conveys to the
Applicable Borrower, and grants to the Applicable Borrower, a first priority
security interest in and to the Assigned Lease, and all amendments, supplements,
schedules, receipts and acceptance certificates executed or delivered pursuant
thereto, together with all of the Assignor's rights as lessee thereunder
including without limitation: (i) all rights, if any, under Section 1110 of the
Bankruptcy Code of the United States or any statute of similar import (whether
of the United States or any other jurisdiction and whether now in effect or
hereinafter enacted); (ii) all rights to receive payment of insurance proceeds
and payments with respect to any Manufacturer's Warranty, in each case payable
with respect to the [Engine] [Aircraft] or other property which is the subject
of the Assigned Lease; and (iii) upon the occurrence of an Event of Default to
demand, collect, receive and retain all rent and other sums which may from time
to time become payable under or in connection with the Assigned Lease.
2. The Assigned Lease is attached hereto and is being filed for
recordation with the Federal Aviation Administration of the United States or any
Applicable Foreign Jurisdiction simultaneously herewith.
3. The Assignor represents and warrants that:
(a) The Assigned Lease is an Eligible Lease;
(b) The Assigned Lease is in full force and effect;
(c) On the date of each Advance related to the [Aircraft]
[Engine] subject to the Assigned Lease, there has occurred no event
under the Assigned Lease which constitutes an event of default or, to
the best knowledge of the Assignor a default, thereunder or which with
the giving of notice or lapse of time or both would constitute an event
of default thereunder;
(d) No rent or other sum payable under the Assigned Lease has
been prepaid;
(e) The Assigned Lease is the entire agreement of lease with
respect to the [Engine] [Aircraft] and other property which are the
subject thereof and the Assigned Lease
C-3-2
<PAGE> 227
has not been amended, supplemented, or modified nor has any provision
thereof been waived by either party thereto (except as attached
hereto);
(f) By this assignment, the Applicable Borrower assumes none
of the obligations of the Assignor under the Assigned Lease and the
Assignor shall remain solely responsible for the performance of each
and every term and provision of the Assigned Lease on its part to be
performed; and
(g) Upon the occurrence and continuation of an Event of
Default and in addition to any other rights and remedies provided in
any of the Loan Documents or arising by operation of law, the
Applicable Borrower may send notice to the lessee under the Assigned
Lease demanding that such lessee perform all obligations required to be
performed thereunder including, but not limited to, the obligation to
pay all rent and other sums which may thereafter become payable under
the Assigned Lease, solely to and for the benefit of the Applicable
Borrower to the exclusion of the Assignor and any other party who may
claim entitlement to the payment thereof.
IN WITNESS WHEREOF, the undersigned have executed or caused this
Assignment to be executed on the day and year first written above.
ASSIGNOR:
WITNESS:
By:__________________________
______________________ Name:________________________
Title:_______________________
______________________
[NAME OF APPLICABLE BORROWER]
WITNESS:
By:__________________________
______________________ Name:________________________
Title:_______________________
______________________
C-3-3
<PAGE> 228
THE LESSEE ACKNOWLEDGES AND CONSENTS to the foregoing terms and provisions this
___ day of _____, 19___.
[NAME OF LESSEE]
WITNESS:
By:__________________________
______________________ Name:________________________
Title:_______________________
______________________
C-3-4
<PAGE> 229
EXHIBIT A
Assigned Lease
C-3-5
<PAGE> 230
SCHEDULE D
Form of Security Agreement Supplement
MORTGAGE AND SECURITY AGREEMENT SUPPLEMENT NO. ____
THIS MORTGAGE AND SECURITY AGREEMENT SUPPLEMENT NO. _________ (the
"Supplement") dated ____________________ between ____________________ (the
"Grantor"), and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association, as Agent (the "Agent") for each of the lenders (the "Lenders" and
collectively with the Agent, the "Secured Parties") now or hereafter party to
the Credit Agreement (as defined below). All capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed thereto in
the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have agreed to provide a revolving credit
facility to First Security Bank, National Association (the "Initial Borrower"),
solely as Trustee on behalf of the trust created by that certain Trust Agreement
(11111) dated June ___, 1998 between First Security Bank, National Association
and Aircraft 11111, Inc., and certain UniCapital Subsidiary Trusts and
UniCapital Special Purpose Corporations designated as Borrowing Affiliates under
the Credit Agreement (the Initial Borrower and such Borrowing Affiliates are
hereinafter referred to as a "Borrower" or collectively as the "Borrowers"), the
Agent and the Lenders party thereto (as from time to time amended, revised,
modified, supplemented or amended and restated, the "Credit Agreement"); and
WHEREAS, the Grantor is either a Borrower or a Guarantor; and
WHEREAS, the Grantor and the Agent on behalf of the Secured Parties
have heretofore entered into that certain Mortgage and Security Agreement dated
as of ___ __, 19__, (as from time to time amended, revised, modified,
supplemented or amended and restated, "Security Agreement")[, which Security
Agreement was recorded with the Federal Aviation Administration (the "FAA") on
___ __, 1998 and assigned FAA conveyance number ______];
WHEREAS, the Security Agreement provides for the execution and delivery
of supplements thereto substantially in the form hereof for the purpose of
subjecting the Collateral, including the hereinafter described
[Engines][Aircraft], to the Lien of the Security Agreement;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
D-1
<PAGE> 231
1. As collateral security for the payment, performance, and
satisfaction of all of the Obligations of each Borrower under the Credit
Agreement (the "Secured Obligations"), the Grantor hereby affirms, grants,
pledges and assigns to the Agent for the benefit of the Secured Parties and
grants to the Agent for the benefit of the Secured Parties a continuing first
priority security interest in and to all of the property of the Grantor whether
now owned or existing or hereafter acquired or arising and wheresoever located,
including without limitation the following:
(a) _______________ ( ) aircraft engines, such engines having
750 or more rated takeoff horsepower or the equivalent thereof,
identified as follows:
=======================================================================
MANUFACTURER'S
MAKE MODEL SERIAL NUMBER
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
=======================================================================
together with any and all parts, appliances, components, accessories,
replacement parts, accessions, attachments or equipment installed on,
or appurtenant to, or delivered with or in respect thereof and all
other property owned by the Grantor hereafter physically affixed,
installed or incorporated in or attached thereto, including, without
limitation, any avionics equipment and any quick engine change
equipment attached thereto (collectively referred to hereinafter as the
"Engines"), and to the extent they are applicable to the Engines, all
right, title and interest of the Grantor in, to and under all
warranties, service contracts and product agreements of any
manufacturer or of any maintenance or overhaul agency of the Engines,
or any subcontractor or supplier or vendor thereof, to the extent
assignable or enforceable, and any and all rights of the Grantor to
compel performance of the terms of such warranties, service contracts
or product agreements respecting any of the Engines and all documents
with respect to the Engines, whether maintained in original form,
electronic form or on microfiche, including but not limited to:
manufacturer's maintenance and inspection manuals, parts catalog,
engine and airframe logs, pilot check lists, and operator's manuals for
installed equipment, all of which shall be current and complete from
the date of manufacture, all wiring diagrams and supporting technical
publications, and all other documentation and technical information
relating to the Engines, whether in the Grantor's control or the
control of a lessee of the Engines.
(b) _______________ ( ) fixed wing jet engine aircraft,
identified as follows:
D-2
<PAGE> 232
=======================================================================
SERIAL
MAKE MODEL NUMBER
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
=======================================================================
together with any and all parts, appliances, components, accessories,
replacement parts, accessions, attachments or equipment installed on,
or appurtenant to, or delivered with or in respect thereof and now or
hereafter owned by the Grantor hereafter physically affixed, installed
or incorporated in or attached thereto and all documents with respect
to the aircraft, whether any maintained in original form, electronic
form or on microfiche, including but not limited to: FAA approved
Aircraft Flight Manual, any other flight manual, manufacturer's
maintenance and inspection manuals, parts catalog, engine and airframe
logs, pilot check lists, and operator's manuals for installed
equipment, all of which shall be current and complete from the date of
manufacture, all wiring diagrams and supporting technical publications,
and all other documentation and technical information relating to the
aircraft, whether in the Grantor's control or the control of a lessee
of the aircraft (collectively referred to hereinafter as the
"Aircraft").
(c) That certain [Engine][Aircraft] Lease Agreement between as
lessor and as lessee dated , 199 with respect to the [Engine][Aircraft]
listed in Section 1(a) or (b) hereof, and all amendments, supplements,
schedules, receipts and acceptance certificates executed or delivered
pursuant thereto (the "Assigned Lease") together with all of the
lessor's rights thereunder, and all proceeds thereof.
(d) Those certain Carrier Loan Documents listed in Exhibit A
hereto with respect to the [Engine][Aircraft] listed in Section 1(a) or
(b) hereof, and all amendments, supplements, schedules, receipts and
acceptance certificates executed or delivered pursuant thereto (the
"Assigned Carrier Loan Documents") together with all of the Grantor's
rights thereunder, and all proceeds thereof.
2. This Supplement shall be construed as supplemental to the Security
Agreement and shall form a part thereof and the Security Agreement is hereby
incorporated by reference herein to the same extent as if fully set forth herein
and is hereby ratified, approved and confirmed in all respects.
3. This Supplement is shall be governed by the laws of the State of
Florida.
D-3
<PAGE> 233
4. This Supplement 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.
D-4
<PAGE> 234
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed as of the day and year first above written.
GRANTOR:
__________________________________
WITNESS:
By:_______________________________
______________________ Name:_____________________________
Title:____________________________
______________________
NATIONSBANK, NATIONAL ASSOCIATION,
AS AGENT
WITNESS:
By:_______________________________
______________________ Name:_____________________________
Title:____________________________
______________________
D-5
<PAGE> 235
EXHIBIT A
TO MORTGAGE AND SECURITY AGREEMENT SUPPLEMENT
D-6
<PAGE> 236
SCHEDULE E
Locations of Collateral
Grantors Chief Executive Offices:
Other Places of Business:
Locations of Accounts:
Locations of Inventory:
Locations of Equipment:
Trade Styles:
E-1
<PAGE> 237
SCHEDULE F
[Reserved]
F-1
<PAGE> 238
SCHEDULE G
Patents, Trademarks, Copyrights and Licenses
G-1
<PAGE> 239
SCHEDULE H
Definitions
For the purposes of this Security Agreement, in addition to the definitions set
forth in the recitals and the body of the Security Agreement, the following
terms shall have the respective meanings set forth below:
"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan.
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with any Guarantor or any Borrower; or (ii) which
beneficially owns or holds 10% or more of any class of the outstanding
voting stock (or in the case of a Person which is not a corporation,
10% or more of the equity interest or beneficial interest) of any
Guarantor or any Borrower; or 10% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest or beneficial interest)
of which is beneficially owned or held by any Guarantor or any
Borrower; provided, however, at the time any Guarantor registers any
security issued by it pursuant to the Securities Act of 1933, as
amended, the figure "10%" used in this definition shall automatically
change to "5%" without further action. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
ownership of voting stock, by contract or otherwise.
"Aircraft" shall have the meaning ascribed thereto in Section
1(c).
"Applicable Borrower" means, with respect to any Aircraft or
Engine, the Borrower that has requested or received a Loan to enable
such Borrower to purchase or refinance (or to use the proceeds of such
Loan to finance an Eligible Carrier's purchase or refinancing of) such
Aircraft or Engine.
"Applicable Carrier" means, with respect to any Aircraft or
Engine, the Eligible Carrier that (i) owns such Aircraft or Engine, or
(ii) has leased such Aircraft or Engine from the Applicable Borrower,
or from the Applicable Intermediary in accordance with Section 2.16 of
the Credit Agreement.
"Applicable Foreign Aviation Law" means, with respect to any
Aircraft or Engine, any applicable law (other than the FAA Act) of any
country or subdivision thereof, governing the registration, ownership,
operation, or leasing of all or any part of such Aircraft or Engine, or
the creation, recordation, maintenance, perfection or priority of Liens
on all or any part of such Aircraft or Engine.
H-1
<PAGE> 240
"Applicable Foreign Jurisdiction" means, with respect to any
Aircraft or Engine, any jurisdiction that administers an Applicable
Foreign Aviation Law.
"Applicable Intermediary" means, with respect to any Aircraft
or Engine, the Eligible Intermediary that has leased such Aircraft or
Engine from the Applicable Borrower, and has leased such Aircraft or
Engine to the Applicable Carrier, in each case in accordance with
Section 2.16 of the Credit Agreement.
"Applicable Lease Cure Period" has the meaning assigned
thereto in Section 9.6 of the Credit Agreement.
"Appraisal Procedure" has the meaning assigned thereto in
Section 5.4 of the Credit Agreement.
"Authorized Representative" means any of the President,
Executive Vice President, Senior Vice President or Vice President of
UniCapital, any Beneficial Owner or any UniCapital Special Purpose
Subsidiary, in each case as authorized representative for each of the
Borrowers, or any other Person expressly designated by the Board of
Directors of each of the Borrowers (or the appropriate committee
thereof) as an Authorized Representative of each of the Borrowers.
"Beneficial Owner" means, with respect to any UniCapital
Subsidiary Trust, any Person holding a beneficial interest in such
UniCapital Subsidiary Trust.
"Borrowing Affiliate" means any UniCapital Subsidiary Trust or
UniCapital Special Purpose Corporation that is designated as a
Borrowing Affiliate pursuant to Section 2.14 of the Credit Agreement.
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
States of New York and North Carolina are authorized or obligated by
law, executive order or governmental decree to be closed and, (ii) with
respect to any Eurodollar Rate Loan, any day which is a Business Day,
as described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, New York, New York and Charlotte, North
Carolina.
"Carrier Loan Documents" shall have the meaning ascribed
thereto in Section 1(f).
"Cauff Lippman" means Cauff, Lippman Aviation, Inc., a Florida
corporation that is a direct or indirect, wholly-owned Subsidiary of
UniCapital.
"CLA" means CLA Holdings, Inc., a Delaware corporation that is
a direct, wholly-owned subsidiary of UniCapital.
H-2
<PAGE> 241
"Closing Date" means the date as of which this Agreement is
executed by the Borrowers, the Lenders and the Agent and on which the
conditions set forth in Section 5.1 of the Credit Agreement have been
satisfied.
"Collateral" means, collectively, all property of any
Borrower, any Subsidiary or any other Person in which the Agent or any
Lender is granted a Lien as security for all or any portion of the
Obligations under any Security Instrument.
"Collateral Assignment" means, collectively (or individually
as the context may indicate), any Assignment of Lease substantially in
the form of Exhibit C-1 or C-3 hereto (as applicable) or Assignment of
Carrier Loan Documents substantially in the Form of Exhibit C-2 hereto
delivered to the Agent pursuant to Section 5.2 or 5.3 of the Credit
Agreement or the terms of this Security Agreement, as any of the
foregoing may be amended, revised, modified, supplemented or amended
and restated from time to time.
"Concentration Restriction" means any of the following
restrictions on the Eligible Aircraft or Eligible Engines included in
the Borrowing Base:
(a) the Applicable Carrier Borrowing Base for any
Eligible Carrier shall not at any time exceed the greater of
$50,000,000 or the Applicable Aircraft Borrowing Base for any
one Eligible Aircraft owned or leased by such Eligible
Carrier;
(b) the aggregate of the Applicable Carrier Borrowing
Bases for any four (4) Eligible Carriers shall not at any time
exceed $150,000,000;
(c) the aggregate of the Applicable Carrier Borrowing
Bases for all Asia Pacific Carriers shall not at any time
exceed $90,000,000;
(d) the aggregate of the Applicable Carrier Borrowing
Bases for all U.S. Carriers shall not at any time exceed
$225,000,000;
(e) the aggregate of the Applicable Carrier Borrowing
Bases for all European Carriers shall not at any time exceed
$150,000,000;
(f) the aggregate of the Applicable Carrier Borrowing
Bases for all Latin American Carriers shall not at any time
exceed $120,000,000;
(g) the aggregate of the Applicable Carrier Borrowing
Bases for all Canadian Carriers shall not at any time exceed
$75,000,000;
(h) the aggregate of the Applicable Carrier Borrowing
Bases for all Mideastern Carriers shall not at any time exceed
$60,000,000;
H-3
<PAGE> 242
(i) the aggregate of the Applicable Aircraft
Borrowing Bases for all Aircraft falling within a single model
type (other than Boeing 737 Models) shall not at any time
exceed $120,000,000, provided that for the purposes of this
paragraph, Boeing 757-200 models and Boeing 757-200ER models
shall together be considered one model type;
(j) the aggregate of the Applicable Aircraft
Borrowing Bases for all Boeing 737 Models shall not at any
time exceed $225,000,000;
(k) the aggregate of the Applicable Engine Borrowing
Bases for all Engines shall not at any time exceed
$40,000,000;
(l) the aggregate of the Applicable Aircraft
Borrowing Bases for all Aircraft as to which any related
leases or Carrier Loan Documents expire within any specified
12-month period shall not at any time exceed $150,000,000; and
(m) the aggregate of the Applicable Aircraft
Borrowing Bases and Applicable Engine Borrowing Bases for all
Aircraft and Engines as to which a default has occurred and is
continuing under any related lease or Carrier Loan Document
shall not at any time exceed $30,000,000;
(n) the aggregate of the Applicable Aircraft
Borrowing Bases and Applicable Engine Borrowing Bases for all
Aircraft and Engines that are leased to, or owned, possessed
or operated by Schedule B Carriers shall not at any time
exceed $60,000,000; and
(o) the Borrowing Base shall not include any Aircraft
or Engine that is not, or has ceased to be, an Eligible
Aircraft or Eligible Engine (as the case may be) or that is
not subject to either an Eligible Lease or Eligible Carrier
Loan Documents;
provided that, with respect to any Eligible Aircraft or Eligible Engine
that a Borrower wishes to finance or refinance through the proceeds of
a Loan hereunder, if the inclusion of the Applicable Aircraft Borrowing
Base or Applicable Engine Borrowing Base (as the case may be) of such
Aircraft or Engine would cause one or more of the Concentration
Restrictions to be exceeded or violated, then such Borrower may deem
such Applicable Aircraft Borrowing Base or Applicable Engine Borrowing
Base to be reduced to the highest amount that would not exceed or
violate any Concentration Restriction, provided further that the
aggregate Advances hereunder with respect to such Aircraft or Engine
shall not exceed such reduced Applicable Aircraft Borrowing Base or
reduced Applicable Engine Borrowing Base and all other conditions to
such Advances are satisfied.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder, provided that if, pursuant to Section 9.6
of the Credit Agreement, such event or condition is not deemed
H-4
<PAGE> 243
to be a breach of the Credit Parties' obligations under the Credit
Agreement and the other Loan Documents and each of the conditions set
forth in Section 9.6 of the Credit Agreement is satisfied, then during
the Applicable Lease Cure Period referred to in Section 9.6(d) of the
Credit Agreement, such event or condition shall not be deemed to be a
"Default" except for the purposes of Section 7.1(c), Section 7.11, the
first two sentences of Section 10.4, Section 2 of the Compliance
Certificate in the form of Exhibit H, and Section 4 of the Borrowing
Base Certificate in the form of Exhibit S of the Credit Agreement; and
provided further that if the requirements of Section 9.6(d) of the
Credit Agreement are not satisfied within such Applicable Lease Cure
Period, then an "Event of Default" shall be deemed to have occurred on
the day after the last day of such period.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan and Eurodollar Rate Segment, until the end of the Interest Period
applicable thereto, a rate of two percent (2%) above the Eurodollar
Rate applicable to such Loan, and thereafter at a rate of interest per
annum which shall be two percent (2%) above the Base Rate, (ii) with
respect to Base Rate Loans and Base Rate Segments, at a rate of
interest per annum which shall be two percent (2%) above the Base Rate
and (iii) in any case, the maximum rate permitted by applicable law, if
lower.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Eligible Aircraft" means any Aircraft which satisfies each of
the following requirements:
(a) such Aircraft is a Stage III aircraft and is
one of the models listed on Exhibit L attached to the Credit
Agreement;
(b) such Aircraft is or was manufactured in 1980 or
later, except that if such Aircraft is a McDonnell Douglas
DC10-30, it is or was manufactured in 1973 or later;
(c) such Aircraft is (i) owned by the Applicable
Borrower and is subject to an Eligible Lease between such
Applicable Borrower (as lessor) and an Eligible Carrier (as
lessee), or (ii) is owned by the Applicable Borrower, is
subject to an Eligible Lease between such Applicable Borrower
(as lessor) and the Applicable Intermediary (as lessee), and
is subject to an Eligible Lease between such Applicable
Intermediary (as lessor) and an Eligible Carrier (as lessee),
or (iii) is owned by an Eligible Carrier and is subject to
Eligible Carrier Loan Documents between such Eligible Carrier
(as debtor) and the Applicable Borrower (as lender and secured
party);
H-5
<PAGE> 244
(d) such Aircraft is covered by all of the insurance
described on Exhibit M attached to the Credit Agreement, and
the Agent (for itself and on behalf of the Lenders) is named
as loss payee and additional insured on such insurance;
(e) neither the Applicable Carrier nor the Applicable
Intermediary (if any) is organized under the laws of, or
domiciled in, any Restricted Country; and such Aircraft is not
at any time flown into or located in any Restricted Country;
(f) such Aircraft is either registered in (i) the
United States, (ii) the country of organization of the
Applicable Carrier for such Aircraft, or (iii) the country of
organization of any other Eligible Carrier provided that, at
any given time, no more than four (4) Aircraft may be
registered as described in this clause (iii) and the
Applicable Aircraft Borrowing Base of such Aircraft may not
exceed $100,000,000 in the aggregate;
(g) if such Aircraft is owned by the Applicable
Borrower, the Agent (for itself and on behalf of the Lenders)
has a duly perfected, first priority Lien and security
interest (subject only to Permitted Liens) on such Aircraft
under (i) the FAA Act (in the case of an Aircraft registered
in the United States) or (ii) all Applicable Foreign Aviation
Laws (in the case of an Aircraft registered outside the United
States);
(h) if such Aircraft is not owned by the Applicable
Borrower, then the Applicable Borrower has a duly perfected,
first priority Lien and security interest on such Aircraft
(subject only to Permitted Liens), which Lien has been
assigned to the Agent;
(i) the Agent has received opinions of FAA Counsel
(if such Aircraft is registered in the United States) or
counsel in the Applicable Foreign Jurisdiction (if such
Aircraft is registered outside the United States), which
counsel is reasonably acceptable to the Agent, and which
opinions are addressed to the Agent (on behalf of itself and
the Lenders), opining as to the creation, perfection and
priority of the Agent's Lien and security interest on such
Aircraft, substantially in the form of Exhibit G-2 or G-3 of
the Credit Agreement (as applicable) or otherwise are in form
and substance reasonably acceptable to the Agent; and (in the
case of Aircraft registered in the United States) within a
reasonable period after the registration of the Agent's Lien,
the Agent has received an opinion of FAA counsel substantially
in the form of Exhibit G-4 of the Credit Agreement; and
(j) the Agent has received two (2) Qualified
Appraisals of the Fair Market Value of such Aircraft, each
such appraisal prepared by a separate Qualified Appraiser and
dated as of a date reasonably close to the date of the initial
Loan with respect to such Aircraft; and based on the Appraisal
Procedure, the Agent has determined the initial Fair Market
Value of such Aircraft.
H-6
<PAGE> 245
"Eligible Carrier" means any Schedule A Carrier or Schedule B
Carrier.
"Eligible Carrier Loan Documents" means fully-executed Carrier
Loan Documents between a Borrower (as creditor and secured party) and
an Eligible Carrier (as debtor), which documents satisfy each of the
following requirements:
(a) such Carrier Loan Documents provide for principal
and interest payments to such Borrower in Dollars, and such
interest payments are in amounts and with scheduled payment
dates sufficient to provide such Borrower with funds adequate
to pay all interest on all Loans hereunder relating to the
respective Aircraft or Engine;
(b) the outstanding principal amount of the loan owed
to such Borrower under such Carrier Loan Documents is not less
than the aggregate outstanding principal amount of all Loans
relating to the respective Aircraft or Engine (excluding the
portion (not to exceed 1%) of such Loans used solely to fund
expenses incurred in connection with the acquisition and
financing of such Aircraft or Engine);
(c) such Carrier Loan Documents require such Eligible
Carrier to maintain the insurance described in Exhibit M
attached to the Credit Agreement with respect to such Aircraft
or Engine, and to bear all risk of loss, damage or liability
with respect to such Aircraft or Engine;
(d) at least two (2) years of the loan term is
remaining under such Carrier Loan Documents at the time of any
Loan hereunder relating to such Aircraft or Engine, and such
remaining term is not cancelable for any reason for default
for at least two (2) years after the date of any such Loan,
other than cancellation of such term (i) by such Borrower (as
creditor thereunder) for default by the Applicable Carrier or
(ii) by the Applicable Carrier if the Applicable Carrier is
required to pay (and does in fact simultaneously pay) to such
Borrower, and such Borrower simultaneously pays to the Agent
(on behalf of the Lenders), an amount at least equal to all
outstanding principal and accrued interest on all Loans
relating to such Aircraft or Engine;
(e) such Borrower (as creditor under the Carrier Loan
Documents) is protected under Section 1110 of the U.S.
Bankruptcy Code (or other applicable bankruptcy or insolvency
law reasonably acceptable to the Agent in its sole discretion)
with respect to the creditor's rights against the debtor,
including without limitation its right to require repayment
under the Carrier Loan Documents and, upon the debtor's
default, to foreclose on and take possession of such Aircraft
or Engine, during the debtor's bankruptcy or insolvency;
(f) such Carrier Loan Documents require the debtor to
comply with covenants and restrictions regarding the
maintenance, return, alteration, replacement,
H-7
<PAGE> 246
pooling and lease of such Aircraft or Engine, which covenants
and restrictions satisfy the requirements of Section 7.21(a)
of the Credit Agreement and Schedule 7.21(a) of the Credit
Agreement;
(g) such Carrier Loan Documents prohibit the debtor
from flying or locating such Aircraft or Engine in any
Restricted Country, or allowing such Aircraft or Engine to be
flown or located in any Restricted Country;
(h) such Carrier Loan Documents contain customary
covenants and restrictions relating to re-registration of such
Aircraft or Engine, which covenants and restrictions satisfy
the requirements of Section 7.22 of the Credit Agreement and
Schedule 7.22 of the Credit Agreement;
(i) at the time of any Loan hereunder relating to
such Aircraft or Engine, no prepayment shall have been made
under such Carrier Loan Documents, and no loan payment
obligation shall have been accelerated (unless (i) such
acceleration or prepayment occurred prior to the date of any
Loan relating to such Aircraft or Engine and (ii) after giving
effect to such acceleration or prepayment, the remaining
outstanding principal amount under such Carrier Loan Documents
is greater than or equal to the amount of the Loans hereunder
with respect to such Aircraft or Engine);
(j) at the time of any Loan hereunder relating to
such Aircraft or Engine, the Agent shall have received
evidence reasonably satisfactory to the Agent that such
Carrier Loan Documents are valid and binding; and
(k) such Carrier Loan Documents grant to such
Borrower, and such Borrower has at all times under the FAA Act
(in the case of Aircraft registered in the United States or in
the case of any Engine the Lien on which is recorded under
United States law) or Applicable Foreign Aviation Laws (in the
case of all other Aircraft and Engines), a perfected first
priority Lien on such Aircraft or Engine (subject only to
Permitted Liens), which Lien has been assigned to the Agent.
"Eligible Engine" means an Engine which satisfies each of the
following requirements:
(a) such Engine is a Stage III Engine and is one of
the models listed on Exhibit L of the Credit Agreement;
(b) such Engine is either (i) owned by the Applicable
Borrower and is subject to an Eligible Lease between such
Applicable Borrower (as lessor) and an Eligible Carrier (as
lessee), (ii) is owned by the Applicable Borrower, is subject
to an Eligible Lease between such Applicable Borrower (as
lessor) and the Applicable Intermediary (as lessee), and is
subject to an Eligible Lease between such Applicable
Intermediary (as lessor) and an Eligible Carrier (as lessee),
or (iii) is owned by an
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Eligible Carrier and is subject to Eligible Carrier Loan
Documents between such Eligible Carrier (as debtor) and the
Applicable Borrower (as lender and secured party);
(c) such Engine is covered by all of the insurance
described on Exhibit M of the Credit Agreement, and the Agent
(for itself and on behalf of the Lenders) is named as loss
payee and additional insured on such insurance;
(d) neither the Applicable Carrier nor the Applicable
Intermediary (if any) is organized under the laws of, or
domiciled in, any Restricted Country; and such Engine is not
at any time flown into or located in any Restricted Country;
(e) if such Engine is owned by the Applicable
Borrower, the Agent (for itself and on behalf of the Lenders)
has a duly perfected, first priority Lien and security
interest (subject only to Permitted Liens) on such Engine
under (i) the FAA Act (in the case of an Engine the Lien on
which is recorded under United States law) or (ii) Applicable
Foreign Aviation Laws (in the case of any other Engine);
(f) if such Engine is not owned by the Applicable
Borrower, then the Applicable Borrower has a duly perfected,
first priority Lien and security interest on such Engine
(subject only to Permitted Liens), which Lien has been
assigned to the Agent;
(g) the Agent has received opinions of FAA Counsel
(if the Lien on such Engine is recorded under United States
law) or counsel in the Applicable Foreign Jurisdiction (for
any other Engine), which counsel is reasonably acceptable to
the Agent, and which opinions are addressed to the Agent (on
behalf of itself and the Lenders), opining as to the creation,
perfection and priority of the Agent's Lien and security
interest on such Engine, substantially in the form of Exhibit
G-2 or G-3 of the Credit Agreement (as applicable) or
otherwise are in form and substance reasonably acceptable to
the Agent;
(h) the Agent has received two (2) Qualified
Appraisals of such Engine, each such appraisal prepared by a
separate Qualified Appraiser and dated as of a date reasonably
close to the date of the initial Loan hereunder with respect
to such Engine; and based on the Appraisal Procedure, the
Agent has determined the initial Fair Market Value of such
Engine;
(j) such Engine is or was manufactured in 1983 or
later.
"Eligible Intermediary" means, with respect to any Aircraft or
Engine, a corporation that is a direct, wholly-owned subsidiary of the
Applicable Borrower.
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"Eligible Lease" means a fully-executed lease by a Borrower
(as lessor) to an Eligible Carrier (as lessee) of an Eligible Aircraft
or Eligible Engine, which lease satisfies each of the following
requirements:
(a) such lease provides for rent payments to such
Borrower in Dollars in amounts and with scheduled payment
dates sufficient to provide such Borrower with funds adequate
to pay all interest on all Loans relating to the respective
Aircraft or Engine;
(b) such lease is a "triple net lease" (subject to
any arrangement whereby the Borrower and the Eligible Carrier
agree to share certain expenses relating to aircraft or engine
directives, service bulletins or similar items) and requires
the lessee to maintain the insurance described in Exhibit M of
the Credit Agreement with respect to such Aircraft or Engine,
and to bear all risk of loss, damage of liability with respect
to such Aircraft or Engine;
(c) at least two (2) years of the lease term is
remaining under such lease at the time of any Loan hereunder
relating to such Aircraft or Engine, and such remaining term
is not cancelable for any reason for two (2) years after the
date of any such Loan, other than cancellation of such term
(i) by the lessor for default by the Applicable Carrier, or
(ii) by the Applicable Carrier if the Applicable Carrier is
required to pay (and does in fact simultaneously pay) to such
Borrower, and such Borrower simultaneously pays to the Agent
(on behalf of the Lenders), an amount at least equal to all
outstanding principal and accrued interest on all Loans
relating to such Aircraft or Engine, or (iii) by the
Applicable Carrier if such Borrower continues to own such
Aircraft or Engine and (simultaneously with the cancellation
of such existing Eligible Lease) the Borrower leases such
Aircraft or Engine to an Eligible Carrier pursuant to a new
Eligible Lease (or to an Eligible Intermediary that
simultaneously leases such Aircraft or Engine to an Eligible
Carrier, in each case pursuant to new Eligible Leases) (it
being understood that compliance with this clause (iii) shall
be determined at the time of such termination);
(d) the lessor is protected under Section 1110 of the
U.S. Bankruptcy Code (or other applicable bankruptcy or
insolvency law reasonably acceptable to the Agent) with
respect to the lessor's rights against the lessee, including
without limitation the rights to require performance of the
lessee's obligations under the lease or return of such
Aircraft or Engine during the lessee's bankruptcy or
insolvency;
(e) such lease requires the lessee to comply with
covenants and restrictions regarding the maintenance, return,
alteration, replacement, pooling and sublease of such Aircraft
or Engine, which covenants and restrictions satisfy the
requirements of Section 7.21(a) of the Credit Agreement and
Schedule 7.21(a) of the Credit Agreement;
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(f) if such lease contains a purchase option, the
expected exercise price is equal to or greater than the
expected principal and accrued interest on all Loans relating
to such Aircraft or Engine as of the date of exercise of such
option;
(g) such lease prohibits the lessee from flying or
locating such Aircraft or Engine in any Restricted Country,
and from allowing such Aircraft or Engine to be flown or
located in any Restricted Country;
(h) such lease contains customary covenants and
restrictions relating to re-registration of such Aircraft or
Engine; which covenants and restrictions satisfy the
requirements of Section 7.22 of the Credit Agreement and
Schedule 7.22 of the Credit Agreement;
(i) at the time of any Loan relating to such Aircraft
or Engine, no prepayment shall have been made under such
lease, and no lease payment obligation shall have been
accelerated, provided that it is understood that a scheduled
rental payment to be paid in advance for a rental period in
accordance with the lease terms is not deemed to be a
prepayment;
(j) at the time of any Loan relating to such Aircraft
or Engine, the Agent shall have received a Lessee Estoppel
Certificate executed by such lessee with respect to such
lease, or other evidence reasonably satisfactory to the Agent
that such lease is valid and binding; and
(k) either (i) such lease is a "true lease" (and not
a lease intended as security) under applicable commercial law
and other applicable law (relating to creditors' rights and
bankruptcy); or (ii) such lease grants to such Borrower, and
such Borrower has at all times under the FAA Act (in the case
of Aircraft registered in the United States, or in the case of
any Engine the Lien on which is recorded under United States
law) or Applicable Foreign Aviation Laws (in the case of all
other Aircraft and Engines), a perfected first priority Lien
on such Aircraft or Engine, which Lien has been assigned to
the Agent;
provided, however, that in the circumstances described in Section 2.16
of the Credit Agreement, "Eligible Lease" means, individually and
collectively, (X) a fully-executed lease by a Borrower (as lessor) to
the Applicable Intermediary (as lessee) of an Eligible Aircraft or
Eligible Engine, which lease satisfies each of the requirements for an
"Eligible Lease" set forth in clauses (a) through (k) above except that
the lessee is not an Eligible Carrier, and (Y) a fully executed lease
by such Applicable Intermediary (as lessor) to an Eligible Carrier (as
lessee) of such Aircraft or Engine, which lease is identical in all
respects (other than the Persons that are lessor and lessee) to the
lease described in clause (X) above, and which lease satisfies all of
the requirements for an "Eligible Lease" set forth in clauses (a)
through (k) above, except that the lessor is not a Borrower.
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"Engine" shall have the meaning ascribed thereto in Section
1(d).
"Event of Default" means any of the occurrences set forth as
such in Section 9.1 of the Credit Agreement.
"Event of Loss" means, with respect to an Aircraft or Engine,
any of the following events: (i) loss of such Aircraft or Engine or of
the use thereof due to the destruction of or damage to such Aircraft or
Engine to such extent as shall render repair thereof uneconomical,
provided that such repair shall not be deemed uneconomical if the
proceeds of insurance with respect to such damage or destruction (plus
any applicable amounts of deductibles) shall be in an amount at least
equal to the cost of such repair; (ii) any damage to such Aircraft or
Engine which results in an insurance settlement with respect to such
Aircraft or Engine on the basis of a total loss or a constructive or
compromised total loss; (iii) the disappearance of such Aircraft or
Engine which shall have resulted in the loss of possession of such
Aircraft or Engine by the Grantor or an Applicable Carrier for a period
of five (5) consecutive days; (iv) the theft of such Aircraft or Engine
which shall have resulted in the loss of Aircraft or Engine by the
Grantor or an Applicable Carrier for five (5) consecutive days; (v) the
(A) requisition of title, confiscation or seizure of such Aircraft or
Engine, or (B) requisition for use of any Aircraft or Engine subject to
a Lease by the Governmental Authority of the jurisdiction where such
Aircraft is registered or where the Lien on such Engine is recorded
which shall have resulted in the loss of possession of such Aircraft or
Engine by the Grantor or the Applicable Carrier for the remainder of
the Lease term, or (C) the requisition for use of any Aircraft or
Engine subject to a Lease by any Governmental Authority other than the
Governmental Authority described in the foregoing subsection (B) which
shall have resulted in the loss of possession of such Aircraft or
Engine by the Grantor or the Applicable Carrier for a period of 180
days, or (D) requisition for use of any Aircraft or Engine subject to
Carrier Loan Documents which shall have resulted in the loss of
possession of such Aircraft or Engine by the Grantor or Applicable
Carrier through the maturity date of the loan evidenced by such Carrier
Loan Documents; (vi) as a result of any requirement by the FAA, the
Applicable Foreign Jurisdiction or other Governmental Authority, the
use of such Aircraft or Engine in the normal course of interstate or
foreign air transportation shall have been prohibited for a period of
more than 180 days unless, prior to the expiration of such period, the
Grantor shall have undertaken and shall be diligently carrying forward
all steps which are necessary or desirable to permit the normal use of
such Aircraft or Engine, or, in any event, if such use shall have been
prohibited for a period of 360 days; (vii) the operation or location of
such Aircraft or Engine, while under requisition for use by a
Governmental Authority, in any area excluded from coverage by any
insurance policy in effect with respect thereto required by the terms
of Section 11; or (viii) any other event resulting in such Aircraft or
Engine being permanently rendered unfit for normal use for any reason
whatsoever. An Event of Loss with respect to an Aircraft shall be
deemed to have occurred if an Event of Loss occurs with respect to the
airframe which constitutes a part of such Aircraft.
"FAA" means the United States Federal Aviation Administration.
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"FAA Act" means 49 U.S.C. Subtitle VII, Section Section 40101
et seq., as amended from time to time, any regulations promulgated
thereunder and any successor provision.
"FAA Counsel" means DeBee & Gilchrist, special counsel with
respect to FAA matters, or any other law firm having nationally
recognized expertise in FAA matters acceptable to the Agent.
"FAA Recording Office" means the office of the FAA in Oklahoma
City, Oklahoma, maintained as the office for the recordation of Liens
on Aircraft and Engines pursuant to the FAA Act, and any successor or
additional office performing the same or a comparable function.
"Facility Termination Date" means such date as all of the
following shall have occurred: (a) the Borrowers shall have permanently
terminated the Revolving Credit Facility by payment in full of all
Revolving Credit Outstandings, together with all accrued and unpaid
interest thereon, (b) all Revolving Credit Commitments shall have
terminated or expired, (c) the Borrowers shall have permanently
terminated the Term Loan by payment in full of all Term Loan
Outstandings, and (d) the Borrowers shall have fully, finally and
irrevocably paid and satisfied in full all Obligations (other than
Obligations consisting of continuing indemnities and other contingent
Obligations of any Borrower or any Guarantor that may be owing to the
Lenders pursuant to the Loan Documents and expressly survive
termination of this Agreement).
"Fair Market Value" with respect to any Aircraft or Engine
means the fair market value ascribed thereto by the respective
Qualified Appraiser in a Qualified Appraisal; provided that for the
purpose of determining the Fair Market Value of such Aircraft or Engine
at the time of any Loan with respect thereto, such Fair Market Value
shall be determined using an Appraisal Procedure.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guarantors" means, at any date, the Beneficial Owners,
Eligible Intermediaries and Subsidiaries who are required to be parties
to a Facility Guaranty at such date.
"Lease" shall have the meaning ascribed thereto in Section
1(e).
"Lessee Estoppel Certificate" means a certificate in form and
substance reasonably acceptable to the Agent, duly completed and
executed by an Applicable Carrier with
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respect to an Aircraft or Engine; and the Agent agrees that the form of
Lessee Estoppel Certificate attached hereto as Exhibit N to the Credit
Agreement is acceptable.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, any Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
"Loan" or "Loans" means any of the Revolving Loans or the Term
Loan.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Facility Guaranties, the Assumption Letters, and all
other instruments and documents heretofore or hereafter executed or
delivered to or in favor of any Lender or the Agent in connection with
the Loans made and transactions contemplated under this Agreement, as
the same may be amended, supplemented or replaced from the time to
time.
"Loan Value" with respect to an Aircraft or Engine means an
amount equal to the sum of (i) the outstanding Loans related to such
Aircraft or Engine and (ii) the outstanding UniCapital Revolver Loans
related to such Aircraft or Engine.
"Loss Value" with respect to an Aircraft or Engine means an
amount equal to the sum of (i) all Obligations under the Credit
Agreement related to such Aircraft or Engine and (ii) all UniCapital
Revolver Obligations related to such Aircraft or Engine.
"Management Agreement" means that certain Management Agreement
dated as of the date hereof among the Initial Borrower, each Borrowing
Affiliate and Cauff Lippman, pursuant to which the Manager provides
management services with respect to Aircraft and Engines, and any
leases or Carrier Loan Documents with respect thereto.
"Manager" means Cauff Lippman.
"Manufacturer" means any manufacturer of any Aircraft or
Engine.
"Manufacturer's Warranty" means any warranty made or offered
by any Manufacturer with respect to any Aircraft or Engine.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, prospects, operations or condition,
financial or otherwise, of the Borrowers and
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their respective Subsidiaries (if any), taken as a whole, (ii) the
ability of any Credit Party to pay or perform its respective
obligations, liabilities and indebtedness under the Loan Documents as
such payment or performance becomes due in accordance with the terms
thereof, or (iii) the rights, powers and remedies of the Agent or any
Lender under any Loan Document or the validity, legality or
enforceability thereof.
"Mortgage Convention" means the Convention on the
International Recognition of Rights in Aircraft signed initially at
Geneva in 1948, as the same may be amended, modified or supplemented
from time to time.
"NationsBank" means NationsBank, National Association.
"Notes" means the Revolving Notes and the Term Notes.
"NSJ" means The NSJ Group, Inc., a Delaware corporation that
is the direct or indirect, wholly-owned subsidiary of UniCapital.
"Obligations" means the obligations, liabilities and
Indebtedness of any Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) all liabilities
of any Borrower to any Lender which arise under a Swap Agreement
(unless otherwise agreed in writing by such Lender), and (iii) the
payment and performance of all other obligations, liabilities and
Indebtedness of any Borrower to the Lenders, the Agent or NMS
hereunder, under any one or more of the other Loan Documents or with
respect to the Loans.
"Outstandings" means, collectively, at any date, the Revolving
Credit Outstandings and (without duplication) the Term Loan
Outstandings on such date.
"Parts" means all appliances, parts, components, instruments,
appurtenances, accessories, furnishings and other equipment of whatever
nature (other than complete Engines) whether now owned or hereafter
acquired which may from time to time be incorporated in an Aircraft or
an Engine and, after removal therefrom, so long as such "Parts" remain
subject to the Lien created under this Security Agreement.
"Permitted Lien" means any Lien permitted by Section 8.4 of
the Credit Agreement.
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Purchase Price" with respect to any Aircraft or Engine means
the actual purchase price paid for such Aircraft or Engine by the
Applicable Borrower or (in the case of an Aircraft or Engine financed
by loans from a Borrower) an Eligible Carrier , together with
out-of-pocket costs incurred by such Applicable Borrower or Eligible
Carrier in such purchase (provided that such out-of-pocket costs shall
not exceed 1% of such Purchase Price).
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"Qualified Appraisal" means, with respect to any Aircraft or
Engine, an appraisal of such Aircraft or Engine by a Qualified
Appraiser, which appraisal is prepared in accordance with ISTAT
standards and opines as to the Fair Market Value of such Aircraft or
Engine, taking into account the actual maintenance status of such
Aircraft or Engine.
"Qualified Appraiser" means, any of the following appraisal
firms: Aircraft Information Services, Inc., BK Associates, Inc. Simat,
Helliesen & Eichner, Inc., Airclaims Limited, Avitas, Inc., AvSolutions
Inc., or Flight Plan International.
"Qualified Country" means (a) any Restricted Country, (b) any
country listed on Exhibit O to the Credit Agreement, or (c) any other
country to the extent United States or United Nations sanctions or laws
prohibit the use or location of any Aircraft or Engine in such country.
"Qualified Trustee" means (i) Wilmington Trust Company, First
Security Bank, National Association or another bank or trust company
having a combined capital and surplus of at least One Hundred Million
Dollars ($100,000,000) or (ii) any other Person acceptable to the
Agent.
"Rated Carrier" means any Eligible Carrier identified on
Exhibit K of the Credit Agreement, as such exhibit may be amended from
time to time pursuant to Section 7.20 of the Credit Agreement.
"Rate Hedging Obligations" means any and all obligations of
any Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating more than 50% of
the aggregate Credit Exposures of all the Lenders on such date. For
purposes of the preceding sentence, the amount of the "Credit Exposure"
of each Lender shall be equal at all times (a) other than following the
occurrence and during the continuance of an Event of Default, to the
amount of its Revolving Credit Commitment; and (b) following the
occurrence and during the continuance of an Event
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of Default, to the sum of (i) the amount of such Lender's Applicable
Commitment Percentage of Term Loan Outstandings plus (without
duplication) (ii) the aggregate principal amount of such Lender's
Applicable Commitment Percentage of Revolving Credit Outstandings;
provided that, for the purpose of this definition only, if any Lender
shall have failed to fund its Applicable Commitment Percentage of any
Advance, the Revolving Credit Commitment of such Lender shall be deemed
reduced by the amount it so failed to fund for so long as such failure
shall continue and such Lender's Credit Exposure attributable to such
failure shall be deemed held by any Lender making more than its
Applicable Commitment Percentage of such Advance to the extent it
covers such failure.
"Restricted Country" means, with respect to any Aircraft or
Engine, any country to the extent that (a) any applicable laws or
sanctions of any applicable Governmental Authority prohibit (i) the use
or location of such Aircraft or Engine in such country by the
Applicable Carrier or any other Person then operating such Aircraft or
Engine, or (ii) any Loan hereunder to be used to finance or refinance
such Aircraft or Engine (or the lease thereof or the Applicable
Borrower's loans with respect thereto) if such Aircraft or Engine will
be used or located in such country by the Applicable Carrier or any
other Person then operating such Aircraft or Engine, or (b) any
insurance with respect to such Aircraft or Engine prohibits, or the
coverages under such insurance as a whole are reduced by, the use or
location of such Aircraft or Engine in such country, or (c) such
country (or any part thereof in which such Aircraft or Engine is to be
located) is designated by any insurance company providing insurance
with request to such Aircraft or Engine as a war zone, a recognized
area of hostilities or an area threatened with war or hostilities,
unless (in the case of this clause (c)) such Aircraft or Engine is
covered by war risk and allied perils insurance, in each case in the
amount (and with the provisions) required by Section 11 hereof (as if
the Applicable Carrier were not a Rated Carrier), except that a Rated
Carrier may self-insure for such risks to the extent permitted by (and
subject to the overall limits on self-insurance contained in) Section
11(c) hereof.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Revolving Loans to the
Borrowers up to an aggregate principal amount at any one time
outstanding equal to such Lender's Applicable Commitment Percentage of
the Total Revolving Credit Commitment, subject, however to Section
2.13(b)(i) of the Credit Agreement.
"Revolving Credit Facility" means the facility described in
Article II of the Credit Agreement providing for Loans to the Borrowers
by the Lenders in the aggregate principal amount of the Total Revolving
Credit Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding.
"Revolving Credit Termination Date" means the earliest of (i)
the Stated Termination Date, (ii) the date of termination of Lenders'
obligations pursuant to Section 9.1 of the Credit
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Agreement upon the occurrence of an Event of Default, or (iii) such
date as the Borrowers may voluntarily and permanently terminate the
Revolving Credit Facility by payment in full of all Revolving Credit
Outstandings, together with all accrued and unpaid interest thereon and
reduce the Total Revolving Credit Commitment to zero pursuant to
Section 2.7 of the Credit Agreement.
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Article II of
the Credit Agreement.
"Revolving Notes" means, collectively, the promissory notes of
the Borrowers evidencing Revolving Loans executed and delivered to the
Lenders as provided in Section 2.5 of the Credit Agreement
substantially in the form of Exhibit F-1 of the Credit Agreement, with
appropriate insertions as to amounts, dates and names of Lenders.
"Schedule A Carrier" means any Person listed on Exhibit P of
the Credit Agreement, as such Exhibit may be amended from time to time
pursuant to Section 7.20 of the Credit Agreement.
"Schedule B Carrier" means any Person listed on Exhibit Q of
the Credit Agreement, as such Exhibit may be amended from time to time
pursuant to Section 7.20 of the Credit Agreement.
"Security Agreement" means, collectively (or individually as
the context may indicate), (i) the Mortgage and Security Agreement
dated as of the date hereof by the Borrowers to the Agent, and (ii) any
additional Mortgage and Security Agreement (substantially in the form
of Exhibit J of the Credit Agreement) delivered to the Agent pursuant
to Section 5.2, 5.3 or 2.14 of the Credit Agreement as hereafter
modified, amended or supplemented from time to time.
"Security Agreement Supplement" means, collectively (or
individually as the context may indicate), all Supplements to the
Security Agreement, substantially in the form of Schedule D hereto,
delivered to the Agent pursuant to the terms of Sections 2 and 8 of the
Security Agreement.
"Security Instruments" means, collectively, the Pledge
Agreement, Security Agreement, the Collateral Assignment, and all other
agreements, instruments and other documents, whether now existing or
hereafter in effect, pursuant to which any Borrower, any Beneficial
Owner, any Subsidiary, any Intermediary or any other Person shall grant
or convey to the Agent or the Lenders a Lien in property as security
for all or any portion of the Obligations, as any of them may be
amended, modified or supplemented from time to time.
"Stated Termination Date" means June 9, 1999, or such later
date as the parties may agree or may be applicable pursuant to Section
2.13 of the Credit Agreement.
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"Subsidiary" means (a) 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 one or more
Guarantors, Borrowers and/or by one or more of any Guarantor's
Subsidiaries or any Borrower's Subsidiaries. With respect to any
specified Guarantor or Borrower, the "Subsidiaries" of such Guarantor
or Borrower shall mean (y) any Subsidiary owned directly or indirectly
by such Guarantor or Borrower or by any of its Subsidiaries, or (z) any
trust with respect to which such Guarantor or such Borrower or any of
its Subsidiaries has a beneficial interest.
"Swap Agreement" means one or more agreements between any
Borrower and any Person with respect to Indebtedness evidenced by any
or all of the Notes, on terms mutually acceptable to such Borrower and
such Person, which agreements create Rate Hedging Obligations.
"Term Loan" has the meaning assigned thereto in Section 2.13
of the Credit Agreement.
"Term Loan Maturity Date" has the meaning assigned thereto in
Section 2.13 of the Credit Agreement.
"Term Loan Outstandings" means, as of any date of
determination, the aggregate principal amount of the Term Loan then
outstanding and all interest accrued thereon.
"Term Loan Termination Date" means (i) the Term Loan Maturity
Date or (ii) such earlier date of termination of Lenders' obligations
pursuant to Section 9.1 of the Credit Agreement upon the occurrence of
an Event of Default, or (iii) such date as the Borrowers may
voluntarily and permanently terminate the Term Loan by payment in full
of all Obligations incurred in connection with the Term Loan.
"Term Note" has the meaning assigned in Section 2.13 of the
Credit Agreement.
"Total Revolving Credit Commitment" means a principal amount
equal to $300,000,000, as reduced from time to time in accordance with
Section 2.7 of the Credit Agreement.
"UniCapital" means UniCapital Corporation, a Delaware
corporation.
"UniCapital Revolving Credit Agreement" means the Credit
Agreement dated as of June 10, 1998, among UniCapital, NationsBank, as
agent, and the lenders party thereto, as such agreement may be amended,
modified or restated from time to time.
"UniCapital Revolver Loans" means all "Loans" as defined in
the UniCapital Revolving Credit Agreement.
H-19
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"UniCapital Revolver Obligations" means all "Obligations" as
defined in the UniCapital Revolving Credit Agreement.
"UniCapital Special Purpose Corporation" means any corporation
(a) that is organized under the laws of any state of the United States
and has its principal place of business in the United States, and (b)
which is a direct or indirect, wholly-owned Subsidiary of Cauff Lippman
or NSJ.
"UniCapital Subsidiary Trust" means any trust (a) that is
organized under the laws of a state of the United States and has its
principal place of business in the United States, (b) whose trustee is
a Qualified Trustee, and (c) in which 100% of all beneficial interests
are owned directly by a direct or indirect wholly-owned Subsidiary of
Cauff Lippman or NSJ.
H-20
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EXHIBIT K
List of Rated Carriers
Air France
Alaska Airlines
All Nippon Airways
American Airlines
British Airways (but not subsidiaries thereof)
Cathay Pacific Airways
Continental Airlines
Delta Air Lines
Federal Express
Japan Airlines
KLM-Royal Dutch Airlines
Lufthansa German Airlines
Northwest Airlines
SAS (but not subsidiaries thereof)
Singapore Airlines
Southwest Airlines
Swissair
United Airlines
United Parcel Service (UPS)
K-1
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EXHIBIT L
List of Approved Aircraft Models and Approved Engine Models
AIRCRAFT
Boeing 737-300, 737-400, 737-600, 737-700, 737-800 and 737-900
Boeing 747
Boeing 757-200, 757-200ER
Boeing 767-300ER Airbus 319, 320, 321 and 330
McDonnell Douglas DC10-30
McDonnell Douglas MD-81, MD-82, MD-83 and MD-90
Any model manufactured by Boeing or McDonnell Douglas which is identical (in all
respects) to one of the foregoing models except that the name of the model has
been changed.
ENGINES
PRATT AND WHITNEY
JT9D- 7A, 7F, 7J, 7Q, 70A, 59A, 20, 7R4D, 7R4D1, 7R4E, 7R4E1, 7R4E4, 7R4E2,
7R4H1
PW 2037, 2040
PW 4052, 4056, 4060, 4062, 4074, 4077, 4084, 4090, 4098, 4152, 4156, 4156A,
4158, 4164, 4168, 4460, 4462
GENERAL ELECTRIC
CF6- 50C, 50C1, 50C2, 50C2B, 50C2F, 50C2R, 50E1, 50E2
CF6- 80A, 80A2, 80A3, 80C2, 80C2A1, 80C2A2, 80C2A3, 80C2A4F, 80C2A5, 80C2A8,
80C2B, 80C2B1, 80C2B1F, 80C2B2, 80C2B2F, 80C2B4, 80C2B4F, 80C2B6, 80C2B6F,
80C2B7, 80C2B7F, 80C2D1F, 80E1, 80E1A1
GE90- 76B, 85B, 92B
SNECMA
CFM56- 2C1, 3B1, 3B2, 3C1, 5A1, 5A3, 5A4, 5A5, 5B, 5B1, 5B3, 5B4-2, 5B5-2, 5B6,
5C2, 5C26, 5C3, 5C4, 7B20, 7B24, 7B26
L-1
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ROLLS ROYCE
RB211- 524B4, 524B41, 524C2, 524D4, 524G, 524H, 524H2, 535C, 535E4, 535E4-B
TRENT
700, 768, 772, 871, 875, 877, 884, 890
IAE
V2500-A1
V2524-A5
V2525-A5, D5
V2527-A5
V2530-A5
V2533-A5
L-2
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EXHIBIT M
Required Insurance on Each Aircraft and Engine
Each Borrower shall maintain or cause to be maintained with respect to
each Financed Aircraft or Engine and the other Collateral all insurance required
pursuant to the Security Agreement.
M-1
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EXHIBIT N
Form of Lessee Estoppel Certificate
LESSEE'S ESTOPPEL AGREEMENT
THIS LESSEE'S ESTOPPEL AGREEMENT (the "Agreement") is made as of this
___ day of ____________, ______, by ______________________ (the "Lessee"), and
NATIONSBANK, NATIONAL ASSOCIATION, as agent (in such capacity herein together
with any successors in such capacity, the "Agent") for each of the lenders (the
"Lenders" and collectively with the Agent, the "Secured Parties") now or
hereafter party to the Credit Agreement (as defined below). All capitalized
terms used but not otherwise defined herein shall have the respective meanings
assigned thereto in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Lessee and ___________________ (the "Lessor") have
heretofore entered into that certain [Aircraft] [Engine] Lease Agreement dated
________ ___, _____ (together with all amendments, supplements, exhibits and
schedules thereto, the "Lease"), pursuant to which the Lessor leased to Lessee
___________________________ bearing manufacturer's serial number ________ and
______________________ bearing manufacturer's serial number _______ (the
["Leased Aircraft"] ["Leased Engine"]); and
WHEREAS, ________________ (the "Initial Borrower") and certain
Affiliates thereof designated as Borrowers from time to time (the Initial
Borrower and such Affiliates are hereinafter referred to as a "Borrower" or
collectively as the "Borrowers"), the Agent and the Lenders are parties to that
certain Credit Agreement dated as of June __, 1998 (as from time to time
amended, revised, modified, supplemented or amended and restated, the "Credit
Agreement"), pursuant to which the Agent and the Lenders have agreed to provide
a revolving credit facility to the Borrowers to finance the purchase aircraft
and/or engines; and
[WHEREAS, the Lessor is a Borrower; and]
[WHEREAS, the Lessor is a wholly-owned Subsidiary of a Borrower; and]
WHEREAS, as collateral security for payment and performance of the
Borrowers' Obligations under the Credit Agreement, [the Lessor] [the Applicable
Borrower] has granted to the Agent for the benefit of the Secured Parties a duly
perfected first priority security interest in the [Leased Aircraft] [Leased
Engine] pursuant to that certain Mortgage and Security Agreement dated as of
_________ ___, ______ by and between the Borrower, ___________ and the Agent
(the "Security Agreement"); and
N-1
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WHEREAS, as collateral security for payment and performance of the
Obligations under the Credit Agreement [and the Guarantors' Obligations under
the Facility Guaranty] the Lessor has assigned to the Agent for the benefit of
the Secured Parties a duly perfected first priority security interest in and to
the Lease, together with all of the Lessor's rights thereunder, pursuant to that
certain Assignment of Lease dated as of __________ __, _____ by and between the
Agent and the Lessor (the "Assignment of Lease"); and
WHEREAS, the Lessee has acknowledged its consent to the Assignment of
Lease by executing a signature page thereto; and
WHEREAS, a material part of the consideration given in connection with
and as an inducement to the execution and delivery of the Credit Agreement by
the Agent and the Lenders was the obligation that this Agreement be entered into
among the parties hereto;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
5. REPRESENTATIONS AND WARRANTIES OF LESSEE. The Lessee certifies that:
(a) it has full power and authority to enter into this
Agreement (and the person executing this Agreement on behalf of Lessee
has the power and authority to execute this Agreement;
(b) it is the Lessee under the Lease;
(c) a true, correct and complete copy of the Lease as of the
date hereof is attached hereto as Exhibit I, which Lease constitutes
all of the agreements between the Lessor and the Lessee with respect to
the [Leased Aircraft][Leased Engine];
(d) no prepayment of amounts due under the Lease has been
made, provided that it is understood that a scheduled rental payment to
be paid in advance for a rental period in accordance with the lease
terms is not deemed to be a prepayment;
(e) the Lease remains in full force and effect;
6. NOTICES. Any notice under this Agreement will be in writing and in
English. In the event of any default by Lessor under the Lease, the Lessee shall
promptly notify the Agent of such claimed default, by certified mail, return
receipt requested, at the following address:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
N-2
<PAGE> 265
Attention: Agency Services
Telephone: (704) 386-4220
Facsimile: (704) 386-9923
with a copy to:
NationsBank National Association
Corporate Finance
100 S.E. 2nd Street
Miami, Florida 33131-2100
Attention: Allison Freeland
Telephone: (305) 533-2421
Facsimile: (305) 533-2437
7. PAYMENTS TO AGENT. In accordance with the Assignment of Lease and
the other Loan Documents, upon the occurrence and continuation of an Event of
Default and upon written notice of such Event of Default to the Lessee, the
Lessee shall thereafter pay all amounts due and payable under the Lease directly
to the Agent for the benefit of the Lenders and shall cease to make any payments
under the Lease to Lessor. The Lessee shall continue to make all payments under
the Lease directly to the Agent for the benefit of the Lenders until such time
as the Agent provides written notice to the Lessee otherwise.
8. QUIET ENJOYMENT. So long as no event of default shall have occurred
and be continuing under the Lease, the Agent will not interfere with the quiet
enjoyment of the possession and use of the [Leased Aircraft][Leased Engine] by
the Lessee during the term of the Lease and it will (subject to any requirements
or restrictions imposed by applicable law) dispose of its interest in the
[Leased Aircraft] [Leased Engine] subject to the Lease expressly subject to the
Lease and on terms such that the purchaser provides a similar right of quiet
enjoyment to the Lessee.
9. NOTICE OF SECURITY INTEREST. The Lessee certifies that it has
received notice of the Agent's security interest in the [Leased Aircraft]
[Leased Engine] and execution of this Agreement shall be conclusive evidence of
such notice.
10. RELIANCE. The Lessee acknowledges that the [Lessor] [Applicable
Borrower] is borrowing funds from the Agent and the Lenders in order to finance
the purchase of the [Leased Aircraft][Leased Engine] and agrees that the Agent
and each of the Lenders may directly rely on the statements and agreements made
by Lessee, and that the Agent and each of the Lenders may enforce this
Agreement.
11. LESSOR REMAINS LIABLE. Nothing contained in the Agreement or in the
Assignment of Lease shall be construed as any release, discharge, novation or
waiver of the Lessor's obligations and liabilities under the Lease (including
without limitation the duty to perform) and the Lessor shall remain fully
responsible and liable for all obligations and liabilities of the lessor under
the Lease.
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12. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the Lessee, the Agent and the Secured Parties, their
heirs, personal representatives, successors and assigns. This Agreement may be
assigned by the Agent for the benefit of the Secured Parties by giving thirty
(30) days notice of the assignment to the Lessee. The Lessee will notify all
successor owners, transferees, purchasers and mortgagees of the existence of
this Agreement. This Agreement may not be modified or terminated orally , but
only in writing signed by all parties hereto.
13. TERMINATION. This Agreement shall continue in force until all of
the Borrowers' Obligations and liabilities to the Agent and the Secured Parties
are paid and satisfied in full and all financing arrangements among the Agent,
the Secured Parties and the Borrowers have been terminated.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same agreement.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF
[THE STATE OF FLORIDA][THE GOVERNING LAW OF THE LEASE].
N-4
<PAGE> 267
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by authority duly given as of the day and year first above
written.
LESSEE:
WITNESS: [NAME OF LESSEE]
_____________________
By:_______________________________
_____________________ Name:_____________________________
Title:____________________________
NATIONSBANK, NATIONAL ASSOCIATION,
AS AGENT:
By:_______________________________
Name:_____________________________
Title:____________________________
ACKNOWLEDGED AND AGREED:
LESSOR:
WITNESS: [NAME OF LESSOR]
_____________________
By:_______________________________
_____________________ Name:_____________________________
Title:____________________________
N-5
<PAGE> 268
EXHIBIT I
---------
Lease
-----
N-6
<PAGE> 269
EXHIBIT O
---------
Scheduled Qualified Countries
Afghanistan
Angola
Bosnia-Herzegovina
Cuba
The Federal Republic of Yugoslavia (Serbia and Montenegro)
Iran
Iraq
Lebanon
Libya
Myanmar (Burma)
North Korea
Syria
Sudan
O-1
<PAGE> 270
EXHIBIT P
---------
List of Schedule A Carriers
Asia Pacific
- - ------------
Air China
Air New Zealand
All Nippon Airways
Cathay Pacific Airways
China Eastern Airlines
China Southern Airlines
Japan Airlines
Qantas Airways
Singapore Airlines
Canada
- - ------
Air Canada
Europe
- - ------
Air France
Aer Lingus
British Airways (and subsidiaries directly or indirectly owned at least
50% by British Airways)
British Midland Airways
Crossair
Condor Flugdienst
Finnair
Iberia Airlines of Spain
KLM-Royal Dutch Airlines
Lufthansa German Airlines
LuxAir
Maersk Air
SAS (and subsidiaries directly or indirectly owned at least 50% by SAS)
Swissair (and subsidiaries directly or indirectly owned at least 50%
by Swissair)
Latin America
- - -------------
Lan Chile Airlines
TACA International Airlines
TAM
P-1
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Middle East
- - -----------
Emirates Air Services
United States
- - -------------
Alaska Airlines
Aloha Airlines
American Airlines
America West Airlines
Continental Airlines
Delta Air Lines
Federal Express
Midwest Express
Northwest Airlines
Southwest Airlines
United Airlines
United Parcel Services (UPS)
US Airways
P-2
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EXHIBIT Q
---------
List of Schedule B Carriers
Asia Pacific
- - ------------
Ansett Australia
Ansett New Zealand
Canada
- - ------
Canada 3000 Airlines
Europe
Aero Lloyd
Air 2000
Air Europe
Air France Europe
Leisure International Airways
Airtours International
Alitalia
Balair/CTA Leisure
Braathens
Britannia Airways
CargoLux Airlines International
DHL Worldwide Express - Belgium
Icelandair
Lauda Air
LTU Lufttransport Unternehmen
RyanAir
Middle East
- - -----------
Air Malta
Kuwait Airways
Royal Air Maroc
United States
- - -------------
Air Wisconsin Airlines
Airborne Express
American Trans Air
BAX Global (f/k/a Burlington Express)
Q-1
<PAGE> 273
United States (continued)
- - -------------------------
DHL Worldwide Express - U.S.
Emery Worldwide
Express One International
Spirit Airlines
Q-2
<PAGE> 274
EXHIBIT R
---------
Form of Assumption Letter
[Date]
To NationsBank, National Association,
as Agent and the Lenders party to the
Credit Agreement referred to below
Ladies and Gentlemen:
Reference is hereby made to the Credit Agreement dated as of June 10,
1998 (as the same may be amended, supplemented or restated from time to time,
the "Credit Agreement") among First Security Bank, National Association, as
trustee (the "Initial Borrower"), and certain Affiliates of the Initial Borrower
designated as Borrowers therein (the Initial Borrower and such Affiliates being
collectively referred to as the "Borrowers"), the Lenders (as defined in the
Credit Agreement) and NationsBank, National Association, as Agent for the
Lenders ("Agent"). Terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement.
1. Borrowing Affiliate.
(a) The undersigned, _________________, [as trustee on behalf of that
certain trust created under the Trust Agreement ____________ dated as
of _______________, among _______________ and _______________] [OR] [a
_______________ corporation] ([(such trust being referred to as] the
"Affiliate"), proposes that the Affiliate become a "Borrowing
Affiliate" under the Credit Agreement, and accordingly the Affiliate
hereby agrees that from the date hereof until the payment in full of
the principal of and interest on all Loans made to it or on its behalf
under the Credit Agreement and performance of all of its other
obligations thereunder, and termination of its status as a "Borrowing
Affiliate" as provided below, it shall perform, comply with and be
bound by each of the provisions of the Credit Agreement and the Notes
which are stated to apply to a "Borrowing Affiliate" or a "Borrower".
In addition, the Affiliate hereby represents and warrants that: (i)
each of the representations and warranties set forth in Article VI of
the Credit Agreement is true and correct with respect to the Affiliate
as of the date hereof and (ii) it has heretofore received a true and
correct copy of the Credit Agreement (including any amendments thereto,
modifications thereof or waivers thereunder) as in effect on the date
hereof. The Affiliate further represents that [__________________ (the
"Beneficiary"), a _______________ corporation and direct, wholly-owned
Subsidiary of _______________ is the sole owner of any beneficial
interests in the Affiliate] [OR] [_______________ is the sole
shareholder of the Affiliate].
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<PAGE> 275
(b) So long as (i) all Loans made to or on behalf of the Affiliate,
together with all accrued interest on such Loans, have been paid in
full, (ii) all other outstanding Obligations of the Affiliate (except
Obligations to pay principal and interest on Loans other than those
Loans described in clause (i)) have been paid in full, and (iii) all
equity contributions and loans that were made (directly or indirectly)
to the Affiliate using the proceeds of any UniCapital Revolver Loans,
together with all interest accrued on such loans, have been paid in
full, then the Affiliate may, by not less than fourteen (14) days'
prior notice to the Agent, terminate its status as a "Borrowing
Affiliate" and as a "Borrower."
2. Conditions Precedent. No Lender shall make any Loan to or on behalf
of the Affiliate unless the Affiliate has furnished to the Agent, with
sufficient copies for all the Lenders, the following items:
(i) Security Agreements of the Affiliate, any Beneficiary, the
respective Subsidiaries of the Affiliate or any Beneficiary, and the Applicable
Intermediary (if any), in each case substantially in the form of Exhibit J to
the Credit Agreement;
(ii) Facility Guaranties of any Beneficiary, the respective
Subsidiaries of the Affiliate or any Beneficiary, and the Applicable
Intermediary (if any), in each case substantially in the form of Exhibit I to
the Credit Agreement;
(iii) Pledge Agreements of the respective owners and beneficial owners
of the Affiliate, any Beneficiary, the respective Subsidiaries of the Affiliate
or any Beneficiary, and the Applicable Intermediary (if any), in each case
substantially similar in form and content to that executed and delivered by the
Beneficial Owner of the Initial Borrower and the owner of such Beneficial Owner
as of the Closing Date, with appropriate revisions as to the identity of the
pledgor and securing the obligations under the Credit Agreement or the Facility
Guaranty of such Person;
(v) the favorable written opinion or opinions with respect to this
Assumption Letter, each of the other Loan Documents and the transactions
contemplated thereby, of counsel to the Affiliate, addressed to the Agent and
the Lenders and reasonably satisfactory to special counsel to the Agent,
substantially in the form of the opinions delivered on the Closing Date and the
date of the Initial Advance; and
(vi) all other documents required by Sections 5.2 and 5.3 of the
Credit Agreement.
3. Representations. Without limiting the generality of Section 1(a)(i)
of this Assumption Letter, the Affiliate further represents and warrants (to the
Agent and Lenders), with respect to the Affiliate and its Subsidiaries (which
representations and warranties shall survive the delivery of the documents
mentioned herein and the making of Loans), that:
R-2
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(a) Organization and Authority.
(i) The Affiliate is a trust, corporation,
partnership or limited liability company duly organized and
validly existing under the laws of the jurisdiction of its
formation;
(ii) The Affiliate (x) has the requisite power and
authority to own its properties and assets and to carry on its
business as now being conducted and as contemplated in the
Loan Documents, and (y) is qualified to do business in every
jurisdiction in which failure so to qualify would have a
Material Adverse Effect;
(iii) The Affiliate has the power and authority to
execute, deliver and perform this Assumption Letter, the
Credit Agreement and the Notes, and to borrow thereunder, and
to execute, deliver and perform each of the other Loan
Documents to which it is a party; and
(iv) When executed and delivered, each of the Loan
Documents to which the Affiliate is a party will be the legal,
valid and binding obligation or agreement, as the case may be,
of the Affiliate, enforceable against the Affiliate in
accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization
or other similar law 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);
(b) Loan Documents. The execution, delivery and performance by the
Affiliate of each of the Loan Documents to which it is a party:
(i) have been duly authorized by all requisite
Organizational Action of the Affiliate required for the lawful
execution, delivery and performance thereof;
(ii) do not violate any provisions of (i) applicable
law, rule or regulation, (ii) any judgment, writ, order,
determination, decree or arbitral award of any Governmental
Authority or arbitral authority binding on such Credit Party
or its properties, or (iii) the Organizational Documents or
Operating Documents of the Affiliate;
(iii) does not and will not be in conflict with,
result in a breach of or constitute an event of default, or an
event which, with notice or lapse of time or both, would
constitute an event of default, under any contract, indenture,
agreement or other instrument or document to which the
Affiliate is a party, or by which the properties or assets of
the Affiliate are bound; and
R-3
<PAGE> 277
(iv) does not and will not result in the creation or
imposition of any Lien upon any of the properties or assets of
the Affiliate except any Liens in favor of the Agent and the
Lenders created by the Security Instruments;
(c) Solvency. The Affiliate is Solvent after giving effect to the
transactions contemplated by the Loan Documents;
(d) No Immunity. Neither the Affiliate nor any of its assets is
entitled to immunity from suit, execution, attachment or other legal process.
The Affiliate's execution and delivery of this Assumption Letter and the other
Loan Documents to which it is a party constitute, and the exercise of its rights
and performance of and compliance with its obligations under such Loan Documents
will constitute, private and commercial acts done and performed for private and
commercial purposes.
(e) Margin Stock. The proceeds of the borrowings made under the Credit
Agreement will be used by the Affiliate only for the purposes expressly
authorized herein. None of such proceeds will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute any of the
Loans under the Credit Agreement a "purpose credit" within the meaning of said
Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the
Affiliate nor any agent acting in its behalf has taken or will take any action
which might cause this Assumption Letter, the Credit Agreement or any of the
documents or instruments delivered pursuant hereto or thereto to violate any
regulation of the Board or to violate the Securities Exchange Act of 1934, as
amended, or the Securities Act of 1933, as amended, or any state securities
laws, in each case as in effect on the date hereof;
(f) Investment Company. The Affiliate is not an "investment company,"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. Section 80a-1, et seq.). The application of the
proceeds of the Loans and repayment thereof by the Affiliate and the performance
by the Affiliate and its Subsidiaries of the transactions contemplated by the
Loan Documents will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder,
in each case as in effect on the date hereof;
4. Joint and Several Liability. The Affiliate and every other Borrower
(including without limitation the Initial Borrower and each Borrowing Affiliate)
hereby unconditionally and irrevocably affirms to the Lenders, and agrees and
acknowledges, that the Obligations of the Affiliate and all Obligations of any
other Borrower constitute and will constitute joint and several obligations and
liabilities of the Borrowers (including without limitation the Affiliate), that
all actions taken, elections made and notices and certificates furnished or
received by it under or pursuant to the Loan Documents shall constitute the
action, election, notice or certification of all of the Borrowers under the Loan
Documents, and that each Authorized Representative shall have full authority to
act for and on behalf of all of the Borrowers for all purposes of the Loan
Documents. The Affiliate and every other Borrower agrees that the joint and
several liability of
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the Borrowers shall not be impaired or affected by any modification, supplement,
extension or amendment of any contract or agreement to which the parties thereto
may hereafter agree, nor by any modification, release or other alteration of any
of the rights of the Agent or any Lender with respect to the Collateral (except
as expressly provided in Section 2.14 of the Credit Agreement), nor by any
delay, extension of time, renewal, compromise or other indulgence granted by the
Agent, any Lender or any other Person with respect to any of the Obligations,
nor by any other agreements or arrangements whatever with any other Borrower or
with anyone else, the Affiliate and every other Borrower hereby waiving all
notice of any such delay, extension, release, substitution, renewal, compromise
or any such delay, extension, release, substitution, renewal, compromise or
other indulgence, and hereby consenting to be bound thereby as fully and
effectually as if it had expressly agreed thereto in advance. The liability of
the Affiliate and each Borrower hereunder and under the Credit Agreement and the
other Loan Documents is direct and unconditional as to all of the Obligations
hereunder and thereunder, and may be enforced without requiring the Agent, any
Lender or any other Person first to resort to any other right, remedy or
security; no Borrower shall have any right of subrogation, reimbursement or
indemnity whatsoever, nor any right of recourse to security for indemnity
whatsoever, nor any right of recourse to security for any of the Obligations
hereunder, unless and until all of said Obligations have been paid in full;
(except as expressly provided in Section 2.14 of the Credit Agreement) nothing
shall discharge or satisfy the liability of any Borrower hereunder or thereunder
except the full payment and performance of all of the Obligations; any and all
present and future debts and obligations of each Borrower to the other Borrowers
are hereby waived and postponed in favor of and subordinated to the full payment
and performance of all present and future Obligations of the Borrowers to the
Agent, the Lenders and any other Person.
5. Notice. Any notice to the Affiliate may be delivered in accordance
with Section 11.2 of the Credit Agreement. The Affiliate agrees that an
Authorized Representative may give notice under this Assumption Letter and the
other Loan Documents on behalf of the Affiliate, and that any such notice given
by an Authorized Representative on behalf of the Affiliate shall be binding upon
the Affiliate.
6. Jurisdiction and Governing Law.
(i) Without limiting the provisions of Section 11.16 of the
Credit Agreement, the Affiliate and every other Credit Party
irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the United
States federal court and any Florida state court sitting in
the county of Dade, State of Florida, United States of
America, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this
Assumption Letter, the Credit Agreement or any other Loan
Document or for recognition or enforcement of any judgment
relating thereto, and the Affiliate and every other Credit
Party irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and
determined in any such court. The Affiliate and every other
Credit Party agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Assumption Letter shall
affect any right that any Lender or the Agent may otherwise
have to bring any action or proceeding relating to this
Assumption
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Letter, the Credit Agreement or any other Loan Document in the
courts of any jurisdiction.
(ii) This Assumption Letter shall be governed by, and construed in
accordance with, the internal laws (and not the law of
conflicts) of the State of Florida; provided that the Agent
and the Lenders shall retain all rights arising under federal
law.
[signatures follow]
R-6
<PAGE> 280
IN WITNESS WHEREOF, the Affiliate has duly executed and delivered this
Assumption Letter as of the date and year first above written.
[NAME OF BORROWING AFFILIATE]
By_______________________________
Name:_________________________
Title:________________________
Agreed and Consented to:
[INSERT SIGNATURE BLOCKS FOR INITIAL BORROWER
AND EVERY OTHER BORROWER]
By____________________________________________
Name:______________________________________
Title:_____________________________________
Acknowledged and Consented to:
NATIONSBANK, NATIONAL ASSOCIATION, AS AGENT
By____________________________________________
Name:______________________________________
Title:_____________________________________
R-7
<PAGE> 281
EXHIBIT S
---------
Borrowing Base Certificate
NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
NationsBank, National Association,
as Agent
___________________________________
___________________________________
Attention: ____________________
Telefacsimile: (___) ___-____
Reference is hereby made to the Credit Agreement dated as of June 10,
1998 (as amended, modified or restated from time to time, the "Agreement") among
First Security Bank, National Association, as trustee (the "Initial Borrower"),
and certain Affiliates of the Initial Borrower designated as Borrowers
thereunder (the Initial Borrower and such Affiliates being referred to
collectively as the "Borrowers"), the Lenders (as defined in the Agreement) and
NationsBank, National Association, as Agent for the Lenders ("Agent").
Capitalized terms used but not otherwise defined herein shall have the
respective meanings therefor set forth in the Agreement. The undersigned, a duly
authorized and acting Authorized Representative of each of the Borrowers, hereby
certifies to you as of __________ (the "Determination Date") as follows:
1. Compliance with Borrowing Base Requirements:
See Schedule 1 attached hereto.
Required: The aggregate outstanding principal amount of all Loans
related to any Aircraft or Engine may not exceed the Applicable
Aircraft Borrowing Base or Applicable Engine Borrowing Base (as the
case may be) of such Aircraft or Engine.
2. Compliance with Concentration Restrictions:
See Schedule 2 attached hereto.
Required: As set forth in the definition of "Concentration Restriction"
in the Agreement.
3. Schedules.
Schedule 1 attached hereto sets forth an accurate description of each
Financed Aircraft or Engine as of the Determination Date. Schedule 2 attached
hereto demonstrates compliance with
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the Concentration Restrictions as of the Determination Date, and Section C of
Schedule 2 sets forth an accurate description of each lease or Carrier Loan
Document with respect to any Financed Aircraft or Engine which lease or Carrier
Loan Document is, to the best of the Borrowers' knowledge, in default.
4. No Default
A. Since __________ (the date of the last similar
certification), (a) no Borrower has defaulted in the keeping,
observance, performance or fulfillment of its obligations
pursuant to any of the Loan Documents; and (b) no Default or
Event of Default specified in Article IX of the Agreement has
occurred and is continuing.
B. If a Default or Event of Default has occurred
since __________ (the date of the last similar certification),
the Borrowers propose to take the following action with
respect to such Default or Event of Default: _________________
______________________________________________________________
__________________________________________.
(Note, if no Default or Event of Default has
occurred, insert "Not Applicable").
The Determination Date is the last day of the most recent month.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:_________________________________
Authorized Representative
Name:_______________________________
Title:______________________________
S-2
<PAGE> 283
<TABLE>
<CAPTION>
Schedule 1 to Borrowing Base Certificate
Description of Financed Aircraft and Engines
Registration
(jurisdiction and
registration number)
(If no registration, Net Aircraft/Engine
Equipment Type jurisdiction of Applicable Applicable Registered Value (at time of
(make and model) recordation of Lien) Borrower Carrier Owner Mfr. Date Loans)
- - ---------------- ------------------- -------- ------- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C>
<CAPTION>
Outstanding Principal
Amount of Loans
Applicable Current under Aircraft Facility
Aircraft/Engine Aircraft/Engine related to such
Borrowing Base(1) Market Value Aircraft/Engine
- - ----------------- ------------ ---------------
- - --------
</TABLE>
(1) If there is Eligible Credit Enhancement for such Aircraft or Engine,
describe such credit enhancement.
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<PAGE> 284
Schedule 2 to Borrowing Base Certificate
Concentration Restrictions
<TABLE>
<CAPTION>
<S> <C> <C>
A. Applicable Carrier Borrowing Bases
1. Highest for Single Eligible Carrier $__________
2. Highest for 4 Eligible Carriers $__________
3. Asia Pacific Carriers $__________
4. U.S. Carriers $__________
5. European Carriers $__________
6. Latin America Carriers $__________
7. Canadian Carriers $__________
8. Mideastern Carriers $__________
B. Applicable Aircraft/Engine Borrowing Bases
1. All Boeing 737 Models $__________
2. All Other Models $__________
3. All Engines $__________
4. Highest for all Aircraft with leases/carrier loans expiring
in same 12-month period $__________
5. All Aircraft and Engines with defaulted lease/carrier loans $__________
6. All Aircraft and Engines for Schedule B Carriers $__________
7. All Aircraft and Engines not subject to Eligible Lease
or Eligible Carrier Loan Documents $__________
Required: As set forth in the definition of "Concentration Restriction."
</TABLE>
S-4
<PAGE> 285
<TABLE>
<S> <C>
C. Description of Defaulted Lease/Carrier Loan Document [Provide for each defaulted
lease/carrier loan document]
1. Name of Applicable Carrier and Applicable Borrower,
and description of Applicable Aircraft/Engine:_________________________
_______________________________________________________________________
_______________________________________________________________________
2. Describe lease/carrier loan document:__________________________________
_______________________________________________________________________
_______________________________________________________________________
3. Describe nature of default:____________________________________________
_______________________________________________________________________
_______________________________________________________________________
</TABLE>
S-5
<PAGE> 286
EXHIBIT T-1
-----------
Form of Pledge and Security Agreement
(for pledged beneficial interest in UniCapital Subsidiary Trust)
FORM OF BENEFICIAL INTERESTS PLEDGE AGREEMENT
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (as from time to time amended,
modified or supplemented, the "Agreement") is made and entered into as of this
_____ day of ______, 19___ by and between _______________________, a __________
corporation (the "Pledgor"), and NATIONSBANK, NATIONAL ASSOCIATION, a national
banking association organized and existing under the laws of the United States,
as agent (the "Agent") for each of the financial institutions (collectively the
"Lenders" and together with the Agent, the "Secured Parties") now or hereafter
party to the Credit Agreement (as defined below). All capitalized terms used but
not otherwise defined herein shall have the respective meanings assigned thereto
in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Agent and the Lenders have agreed to provide a revolving
credit facility to First Security Bank, National Association (the "Initial
Borrower"), solely as Trustee on behalf of the trust created by that certain
Trust Agreement (11111) dated June __, 1998 between First Security Bank,
National Association and Aircraft 11111, Inc., certain UniCapital Subsidiary
Trusts and UniCapital Special Purpose Corporations designated as Borrowing
Affiliates under the Credit Agreement (the Initial Borrower and such Borrowing
Affiliates are referred to hereinafter individually as a "Borrower" and
collectively as the "Borrowers") pursuant to that certain Credit Agreement dated
as of June 10, 1998 among the Borrowers, the Agent and the Lenders (as from time
to time amended, revised, modified, supplemented or amended and restated, the
"Credit Agreement"); and
WHEREAS, each of the Borrowers is a corporation or trust created for
the purpose of purchasing, or financing the purchase of, certain aircraft and
equipment; and
WHEREAS, the Pledgor owns a beneficial interest in one or more of the
Borrowers that is a trust (collectively, the "Beneficial Interests"); and
WHEREAS, the Pledgor has entered into that certain Guaranty Agreement
dated as of the date hereof (the "Facility Guaranty") pursuant to which the
Pledgor has guaranteed the Obligations of the Borrowers under the Credit
Agreement; and
WHEREAS, pursuant to Section 2.14 of the Credit Agreement the Pledgor
is required to enter into this Agreement and to pledge to the Secured Parties
the Pledged Interests (as defined below) as security for the payment of the
Secured Obligations (as defined below) in accordance with the terms of this
Pledge Agreement; and
T-1-1
<PAGE> 287
WHEREAS, the obligation of the Pledgor to enter into this Agreement
pursuant to Section 2.14 of the Credit Agreement was material to the Secured
Parties' entering into the Credit Agreement and the other Loan Documents; and
WHEREAS, as collateral security for the payment and performance of the
Pledgor's Obligations under the Facility Guaranty and any other Loan Documents,
the Pledgor is willing to pledge and grant to the Agent for the benefit of the
Secured Parties a first priority security interest in all of the shares of
common stock, partnership interests, or other equivalent indicia of ownership,
whether now in existence or hereafter issued, of each of its Subsidiaries,
together with the Pledgor's Beneficial Interests, whether certificated or
uncertificated, all of which are required to be subject to a Pledge Agreement
pursuant to the Credit Agreement (collectively, the "Pledged Interests"),
including without limitation the Pledged Interests more particularly described
on Schedule I hereto (such Subsidiaries and the Borrowers, together with all
other Subsidiaries and Borrowers whose common stock or beneficial interests may
be required to be subject to a Pledge Agreement from time to time, are
hereinafter referred to collectively as the "Pledged Subsidiaries"); and
NOW, THEREFORE, in order to induce the Secured Parties to enter into
the Credit Agreement and the other Loan Documents and to make or continue to
make Loans or Advances for the account of the Borrowers and in consideration of
the premises and the mutual covenants contained herein, the parties hereto agree
as follows:
1. PLEDGE OF STOCK AND BENEFICIAL INTERESTS; OTHER COLLATERAL.
(a) As collateral security for the payment and performance by the
Pledgor of its now or hereafter existing Obligations under the Facility Guaranty
and any other Loan Documents (collectively with the Obligations, the "Secured
Obligations"), the Pledgor hereby pledges and collaterally assigns to the Agent
for the benefit of the Secured Parties, and grants to the Agent for the benefit
of the Secured Parties a first priority lien and security interest in:
(i) all Pledged Interests;
(ii) all cash, securities, dividends, rights, and
other property at any time and from time to time declared or
distributed in respect of or in exchange for any or all of the Pledged
Interests, other than cash dividends permitted to be retained by the
Pledgor under Section 9 hereof;
(iii) all other property hereafter delivered to the
Agent in substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such property
and all cash, securities, interest, dividends, rights, and other
property at any time and from time to time declared or distributed in
respect of or in exchange for any or all of the Pledged Interests;
(iv) all proceeds of any of the foregoing.
All such Pledged Interests, certificates, instruments, cash, securities,
interest, dividends, rights and other property referred to in this Section 1,
other than cash dividends issued in respect of such Pledged Interests that are
permitted to be retained by the Pledgor under Section 9 hereof, are herein
collectively referred to as the "Collateral." Each of the Pledged Interests
described on Schedule I in
T-1-2
<PAGE> 288
effect from time to time is currently owned by the respective Pledgor identified
on such schedule, and all of the Pledged Interests described in Schedule I are
represented by the stock certificates or partnership certificates or other
certificated indicia of ownership listed on such Schedule I hereto (the
"Certificated Pledged Interests"). Certificated Pledged Interests, with undated
stock powers or other appropriate transfer powers duly executed in blank by the
Pledgor, have been delivered to the Agent.
(b) The Pledgor agrees to deliver all the Collateral to the Agent at
such location or locations as the Agent shall from time to time designate by
written notice pursuant to Section 25 hereof for its custody at all times until
termination of this Agreement, together with such instruments of assignment and
transfer as requested by the Agent.
(c) The Pledgor agrees to deliver all share certificates, documents,
agreements, financing statements, amendments thereto, assignments or other
writings as the Agent may request to carry out the terms of this Agreement or to
protect or enforce the lien and security interest in the Collateral hereunder
granted to the Agent for the benefit of the Secured Parties and further agrees
to do and cause to be done all things determined by the Agent to be necessary to
perfect and keep in full force the Lien in the Collateral hereunder granted in
favor of the Agent for the benefit of the Secured Parties, including, but not
limited to, the prompt payment of all documented out-of-pocket fees and expenses
incurred in connection with any filings made to perfect or continue the lien and
security interest in the Collateral hereunder granted in favor of the Agent for
the benefit of the Secured Parties. The Pledgor agrees to make appropriate
entries upon its books and records (including without limitation its stock
record, its partnership record, its transfer books and any other books or
records recording ownership interests therein) disclosing the Lien in the
Collateral hereunder granted to the Agent for the benefit of the Secured
Parties, and agrees to cause the issuers of the Pledged Interest to enter into
"Control Agreements" in form and substance satisfactory to the Agent.
(d) All advances, charges, costs and expenses, including reasonable
attorneys' fees, incurred or paid by any Secured Party in exercising any right,
power or remedy conferred by this Agreement, or in the enforcement thereof,
shall become a part of the Secured Obligations and shall be paid to the Agent
for the benefit of the Secured Parties by the Pledgor, jointly and severally,
immediately upon demand therefor, with interest thereon until paid in full at
the Base Rate; provided, however, that during any time an Event of Default has
occurred and is continuing, interest thereon shall be paid in full at the
Default Rate for Base Rate Loans.
2. STATUS OF PLEDGED INTERESTS. The Pledgor hereby represents and
warrants to the Agent for the benefit of the Secured Parties that (i) all of the
shares of Pledged Interests are validly issued and outstanding, fully paid and
nonassessable and constitute all authorized, issued and outstanding shares of
common stock, partnership interests or other indicia of ownership of each of the
Pledged Subsidiaries of the Pledgor, (ii) the Pledgor is the registered and
record and beneficial owner of such Pledged Interests, free and clear of all
Liens, charges, equities, encumbrances and restrictions on pledge or transfer
(other than (A) Permitted Liens, and (B) restrictions imposed by applicable
law), (iii) the Pledgor has full corporate power, legal right and lawful
authority to execute this Agreement and to pledge, assign and transfer such
Pledged Interests in the manner and form hereof, and (iv) the pledge, assignment
and delivery of such Pledged Interests by the Pledgor to the Agent for the
benefit of the Secured Parties pursuant to this Agreement creates, together with
the delivery of the certificates evidencing such Pledged Interests that are
Certificated Pledged Interests, which delivery has heretofore been accomplished,
a valid and perfected first priority security interest in such Pledged Interests
in favor of the Agent for the benefit of the Secured Parties, securing the
payment of the Secured Obligations. Except as permitted under Section 8.6 of the
Credit Agreement,
T-1-3
<PAGE> 289
none of the Pledged Interests (nor any interest therein or thereto) shall be
sold, transferred or assigned, nor any Lien created therein, without the Agent's
prior written consent, which may be withheld for any reason. The Pledgor
covenants with the Agent for the benefit of the Secured Parties that the Pledgor
shall at all times cause the Certificated Pledged Interests to be represented by
the certificates now and hereafter delivered to the Agent in accordance with
Section 1 hereof and that the Pledgor shall not cause, suffer or permit any of
its Pledged Subsidiaries to issue or create any beneficial interests, capital
stock, partnership interests or other certificated ownership interests, or
securities convertible into, or exercisable or exchangeable for, beneficial
interests, capital stock, partnership interests or other certificated ownership
interests at any time during the term of this Agreement other than the Pledgor
and subject to this Agreement pursuant to Section 23 hereof.
3. PRESERVATION AND PROTECTION OF COLLATERAL.
(a) The Agent shall be under no duty or liability with respect to the
collection, protection or preservation of the Collateral, or otherwise, other
than the obligation to deal with the Collateral while in its possession in the
same manner as the Agent deals with similar securities or property for its own
account.
(b) The Pledgor agrees to pay when due all taxes, charges and
assessments against the Collateral in which it has an interest, unless being
contested in good faith by appropriate proceedings diligently conducted and
against which adequate reserves have been established in accordance with GAAP
and evidenced to the satisfaction of the Agent and provided further that all
enforcement proceedings in the nature of levy or foreclosure are effectively
stayed. Upon the failure of any Pledgor to so pay or contest such taxes,
charges, Liens or assessments, the Agent at its option may pay or contest any of
them (the Agent having the sole right to determine the legality or validity and
the amount necessary to discharge such taxes, charges, Liens or assessments).
4. DEFAULT. Upon the occurrence and during the continuance of any Event
of Default, the Agent is given full power and authority, then or at any time
thereafter, to sell, assign and deliver or collect the whole or any part of the
Collateral, or any substitute therefor or any addition thereto, in one or more
sales, with or without any previous demands or demand of performance or, to the
extent permitted by law, notice or advertisement, in such order as the Agent may
elect; and any such sale may be made either at public or private sale at the
Agent's place of business or elsewhere, either for cash or upon credit or for
future delivery, at such price as the Agent may reasonably deem fair; and the
Agent may be the purchaser of any or all Collateral so sold and hold the same
thereafter in its own right free from any claim of the Pledgor or right of
redemption. Demands of performance, advertisements and presence of property and
sale and notice of sale are hereby waived to the extent permissible by law. Any
sale hereunder may be conducted by an auctioneer or any officer or agent of the
Agent. The Pledgor recognizes that the Agent may be unable to effect a public
sale of the Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "Securities Act"), and applicable law,
and may be otherwise delayed or adversely affected in effecting any sale by
reason of present or future restrictions thereon imposed by governmental
authorities, and that as a consequence of such prohibitions and restrictions the
Agent may be compelled (i) to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the stock for their own account, for investment and not with a view
to the distribution or resale thereof, or (ii) to seek regulatory approval of
any proposed sale or sales, or (iii) to limit the amount of Collateral sold to
any Person or group. The Pledgor agrees and acknowledges that private sales so
made may be at prices and upon terms less favorable to any Pledgor than if such
Collateral was sold either at public sales or at private sales not subject to
other
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<PAGE> 290
regulatory restrictions, and that the Agent has no obligation to delay the sale
of any of the Collateral for the period of time necessary to permit the issuer
of such Collateral to register or otherwise qualify the Pledged Interests, even
if such issuer would agree to register or otherwise qualify for public sale
under the Securities Act or applicable state law. The Pledgor further agrees, to
the extent permitted by applicable law, that the use of private sales made under
the foregoing circumstances to dispose of the Collateral shall be deemed to be
dispositions made in a commercially reasonable manner. The Pledgor hereby
acknowledges that a ready market may not exist for the Pledged Interests if it
is not traded on a national securities exchange or quoted on an automated
quotation system and agrees and acknowledges that in such event the Pledged
Interests may be sold for an amount less than a pro rata share of the fair
market value of the issuer's assets minus its liabilities. In addition to the
foregoing, the Secured Parties may exercise such other rights and remedies as
may be available under the Loan Documents, at law or in equity.
5. PROCEEDS OF SALE. The proceeds of the sale of any of the Collateral
and all sums received or collected from or on account of such Collateral shall
be applied to the payment of expenses incurred or paid by the Agent in
connection with any holding, sale, transfer or delivery of the Collateral, to
the payment of any other costs, charges, reasonable attorneys' fees or expenses
mentioned herein, and to the payment of the Secured Obligations or any part
thereof, all in such order and manner as is provided in Section 9.5 of the
Credit Agreement and otherwise as the Agent may determine and as permitted by
applicable law. The Agent shall, upon satisfaction in full of all such Secured
Obligations, pay any balance to the Pledgor or otherwise as may be required by
applicable law.
6. PRESENTMENTS, DEMANDS AND NOTICES. The Agent shall not be under any
duty or obligation whatsoever to make or give any presentments, demands for
performances, notices of nonperformance, protests, notice of protest or notice
of dishonor in connection with any obligations or evidences of indebtedness held
thereby as collateral, or in connection with any obligations or evidences of
indebtedness which constitute in whole or in part the Secured Obligations
secured hereunder.
7. ATTORNEY-IN-FACT. The Pledgor hereby appoints the Agent as its
attorney-in-fact for the purposes of carrying out the provisions of this
Agreement and taking any action and executing any instrument which the Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is coupled with an interest and is irrevocable; provided, that the Agent shall
have and may exercise rights under this power of attorney only upon the
occurrence and during the continuance of an Event of Default. Without limiting
the generality of the foregoing, upon the occurrence and during the continuance
of an Event of Default, the Agent shall have the right and power to receive,
endorse and collect all checks and other orders for the payment of money made
payable to the Pledgor representing any dividend, interest payment, principal
payment or other distribution payable or distributable in respect of, or
otherwise constituting, the Collateral or any part thereof and to give full
discharge for the same.
8. WAIVER BY THE PLEDGOR. The Pledgor waives (to the extent permitted
by applicable law) any right to require the Agent or any Lender or any other
obligee of the Secured Obligations to (a) proceed against any Person, including
without limitation any Guarantor, (b) proceed against or exhaust any Collateral
or other collateral for the Secured Obligations, or (c) pursue any other remedy
in its power; and waives (to the extent permitted by applicable law) any defense
arising by reason of any disability or other defense of any other Person,
including without limitation any Guarantor, or by
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<PAGE> 291
reason of the cessation from any cause whatsoever of the liability of any other
Person, including without limitation, any Guarantor. Without limiting any rights
of the Lenders under Section 2.14 of the Credit Agreement, the Agent may at any
time deliver (without representation, recourse or warranty) the Collateral or
any part thereof to any Pledgor who has an interest therein and the receipt
thereof by the Pledgor shall be a complete and full acquittance for the
Collateral so delivered, and the Agent shall thereafter be discharged from any
liability or responsibility therefor.
9. DIVIDENDS AND VOTING RIGHTS.
(a) All dividends and other distributions with respect to the Pledged
Interests shall be subject to the pledge hereunder, except for cash dividends
which are, to the extent permitted to be made under the Credit Agreement,
permitted to be retained by the Pledgor so long as no Event of Default shall
have occurred and be continuing, and any such dividends may be retained by the
Pledgor free from any Lien hereunder. Upon the occurrence and during the
continuance of any Event of Default, all such cash and other dividends shall be
promptly delivered to the Agent (together, if the Agent shall request, with
undated stock powers or instruments of assignment duly executed in blank affixed
to any stock certificate or other negotiable document or instrument so
distributed) to be held, released or disposed of by it hereunder or, at the
option of the Agent, to be applied to the Secured Obligations as they become
due.
(b) So long as no Event of Default shall have occurred and be
continuing, the registration of the Collateral in the name of the Pledgor shall
not be changed and the Pledgor shall be entitled to exercise all voting and
other rights and powers pertaining to the Collateral for all purposes not
inconsistent with the terms hereof.
(c) Upon the occurrence and during the continuance of any Event of
Default, at the option of the Agent, all rights of the Pledgor to receive and
retain dividends upon the Collateral shall cease and shall thereupon be vested
in the Agent for the benefit of the Secured Parties.
(d) Upon the occurrence and during the continuance of any Event of
Default, at the option of the Agent, all rights of the Pledgor to exercise the
voting or consensual rights and powers which it is authorized to exercise with
respect to the Collateral pursuant to subsection (b) above shall cease and the
Agent may thereupon (but shall not be obligated to), at its request, cause such
Collateral to be registered in the name of the Agent or its nominee or agent for
the benefit of the Secured Parties and/or exercise such voting or consensual
rights and powers as appertain to ownership of such Collateral, and to that end
the Pledgor hereby appoints the Agent as its proxy, with full power of
substitution, to vote and exercise all other rights as a shareholder with
respect to the Pledged Interests hereunder upon the occurrence and during the
continuance of any Event of Default, which proxy is coupled with an interest and
is irrevocable prior to termination of this Agreement as set forth in Section 22
hereof, and the Pledgor hereby agrees to provide such further proxies as the
Agent may request; provided, however, that the Agent in its discretion may from
time to time refrain from exercising, and shall not be obligated to exercise,
any such voting or consensual rights or such proxy.
10. POWER OF SALE. Until the Facility Termination Date, the power of
sale and other rights, powers and remedies granted to the Agent for the benefit
of the Secured Parties hereunder shall continue to exist and may be exercised by
the Agent at any time and from time to time irrespective of the fact that any
Secured Obligations or any part thereof may have become barred by any statute of
limitations or that the liability of any Pledgor may have ceased.
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<PAGE> 292
11. OTHER RIGHTS. The rights, powers and remedies given to the Agent
for the benefit of the Secured Parties by this Agreement shall be in addition to
all rights, powers and remedies given to any of the Secured Parties by virtue of
any statute or rule of law. Any forbearance or failure or delay by the Agent in
exercising any right, power or remedy hereunder shall not be deemed to be a
waiver of such right, power or remedy, and any single or partial exercise of any
right, power or remedy hereunder shall not preclude the further exercise
thereof. Every right, power and remedy of the Secured Parties hereunder shall
continue in full force and effect until such right, power or remedy is
specifically waived by the Required Lenders by an instrument in writing.
12. ANTI-MARSHALLING PROVISIONS. The right is hereby given by the
Pledgor to the Agent, for the benefit of the Secured Parties, to make releases
(whether in whole or in part) of all or any part of the Collateral agreeable to
the Agent without notice to, or the consent, approval or agreement of other
parties and interests, including junior lienors, which releases shall not impair
in any manner the validity of or priority of the Liens and security interests in
the remaining Collateral conferred under such documents, nor release the Pledgor
from personal liability for the Secured Obligations hereby secured.
Notwithstanding the existence of any other security interest in the Collateral
held by the Agent, for the benefit of the Secured Parties, the Agent shall have
the right to determine the order in which any or all of the Collateral shall be
subjected to the remedies provided in this Agreement. The proceeds realized upon
the exercise of the remedies provided herein shall be applied by the Agent, for
the benefit of the Secured Parties, in the manner provided in Section 9.5 of the
Credit Agreement. The Pledgor hereby waives any and all right to require the
marshalling of assets in connection with the exercise of any of the remedies
permitted by applicable law or provided herein.
13. ABSOLUTE RIGHTS AND OBLIGATIONS. All rights of the Secured Parties,
and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document or any other agreement or instrument
relating to any of the Secured Obligations;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from the
Credit Agreement, any other Loan Document or any other agreement or
instrument relating to any of the Secured Obligations;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
or
(d) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect of the
Secured Obligations or of this Agreement.
14. DEFINITIONS. All terms used herein unless otherwise defined herein
or in the Credit Agreement shall be defined in accordance with the appropriate
definitions appearing in the Uniform Commercial Code as in effect in Florida,
and such definitions are hereby incorporated herein by reference and made a part
hereof.
15. ENTIRE AGREEMENT. This Agreement, together with the Credit
Agreement, the Guaranty Agreement and the other Loan Documents, constitutes and
expresses the entire
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understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, inducements,
commitments or conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms hereof.
Neither this Agreement nor any portion or provision hereof may be changed,
altered, modified, supplemented, discharged, canceled, terminated, or amended
orally or in any manner other than by an agreement, in writing signed by the
parties hereto.
16. FURTHER ASSURANCES. The Pledgor agrees at its own expense to do
such further acts and things, and to execute and deliver such additional
conveyances, assignments, financing statements, agreements and instruments, as
the Agent may at any time request in connection with the administration or
enforcement of this Agreement or related to the Collateral or any part thereof
or in order better to assure and confirm unto the Agent its rights, powers and
remedies for the benefit of the Secured Parties hereunder. The Pledgor hereby
consents and agrees that the issuers of or obligors in respect of the Collateral
shall be entitled to accept the provisions hereof as conclusive evidence of the
right of the Agent, on behalf of the Secured Parties, to exercise its rights
hereunder with respect to the Collateral, notwithstanding any other notice or
direction to the contrary heretofore or hereafter given by the Pledgor or any
other Person to any of such issuers or obligors.
17. BINDING AGREEMENT; ASSIGNMENT. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and to their respective successors and assigns, except
that the Pledgor shall not assign this Agreement or any interest herein or in
the Collateral, or any part thereof, or otherwise pledge, encumber or grant any
option with respect to the Collateral, or any part thereof, or any cash or
property held by the Agent as Collateral under this Agreement. All references
herein to the Agent shall include any successor thereof, each Lender and any
other obligees from time to time of the Secured Obligations.
18. SWAP AGREEMENTS. All obligations of any of the Borrowers to any
Lender or any affiliate of a Lender under Swap Agreements shall be deemed to be
additional Secured Obligations secured hereby (in each case unless otherwise
agreed in writing by such Lender or affiliate of such Lender), and each Lender
or affiliate of a Lender party to any such Swap Agreement shall be deemed to be
a Secured Party hereunder.
19. SEVERABILITY. In case any Lien, security interest or other right of
any Secured Party or any provision hereof shall be held to be invalid, illegal
or unenforceable, such invalidity, illegality or unenforceability shall not
affect any other Lien, security interest or other right granted hereby or
provision hereof.
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
21. INDEMNIFICATION. Without limitation of Section 11.9 of the Credit
Agreement or any other indemnification provision in any Loan Document, the
Pledgor hereby covenants and agrees, jointly and severally, to pay, indemnify,
and hold the Secured Parties harmless from and against any and all out-of-pocket
liabilities, costs, expenses or disbursements of any kind or nature whatsoever
arising in connection with any claim or litigation by any Person resulting from
the execution, delivery, enforcement, performance and administration of this
Agreement or the Loan Documents, or the transactions contemplated hereby or
thereby, or in any respect relating to the Collateral or any
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transaction pursuant to which the Pledgor has incurred any Obligation (all the
foregoing, collectively, the "indemnified liabilities"); provided, however, that
no Pledgor shall have any obligation to a party seeking indemnification
hereunder with respect to indemnified liabilities directly or primarily arising
from the willful misconduct or gross negligence of such party. The agreements in
this Section 21 shall survive repayment of all Secured Obligations, termination
or expiration of this Agreement and occurrence of the Facility Termination Date.
22. TERMINATION. Subject to Section 2.14 of the Credit Agreement, this
Agreement and all obligations of the Pledgor hereunder shall terminate on the
Facility Termination Date, at which time the Liens and rights granted to the
Agent for the benefit of the Secured Parties hereunder shall automatically
terminate and no longer be in effect, and the Collateral shall automatically be
released from the Liens created hereby. Upon such termination of this Agreement,
the Agent shall, at the sole expense of the Pledgor, deliver to the Pledgor
Certificated Pledged Interests, any other certificates evidencing the Pledged
Interests (and any other property received as a dividend or distribution or
otherwise in respect of the Pledged Interests then in its custody), together
with any cash then constituting the Collateral, not then sold or otherwise
disposed of in accordance with the provisions hereof and take such further
actions as may be necessary to effect the same and as shall be reasonably
acceptable to the Agent.
23. ADDITIONAL INTERESTS. If the Pledgor shall acquire or hold (a) any
additional beneficial interests in, or any additional shares of capital stock,
partnership interests or other indicia of ownership in any Pledged Subsidiary or
(b) any beneficial interests in, or any shares of capital stock, partnership
interests or other indicia of ownership any Subsidiary not listed on Schedule I
hereto which are required to be subject to a Pledge Agreement pursuant to the
terms of Section 2.14, Section 5.2 or Section 5.3 of the Credit Agreement or any
other provision of the Credit Agreement (any such beneficial interests, shares,
partnership interests or other indicia of ownership described in clauses (a) or
(b) above being referred to herein as the "Additional Interests"), the Pledgor
shall deliver to the Agent for the benefit of the Secured Parties (i) a revised
Schedule I hereto reflecting the ownership and pledge of such Additional
Interests and (ii) a Pledge and Security Agreement Supplement in the form of
Exhibit A hereto with respect to such Additional Interests duly completed and
signed by the Pledgor. The Pledgor shall comply with the requirements of this
Section 23 concurrently with the acquisition of any such Additional Interests in
the case of beneficial interests, shares, partnership interests or other indicia
of ownership described in clause (a) above, and within the time period specified
in such Section 2.14, Section 5.2, or Section 5.3 or elsewhere in the Credit
Agreement with respect to beneficial interests, shares, partnership interests or
other indicia of ownership described in clause (b) above.
24. REMEDIES CUMULATIVE. All remedies hereunder are cumulative and are
not exclusive of any other rights and remedies of the Agent provided by law or
under the Credit Agreement, the other Loan Documents, or other applicable
agreements or instruments. The making of the Loans to or for the benefit of any
of the Borrowers pursuant to the Credit Agreement shall be conclusively presumed
to have been made or extended, respectively, in reliance upon the Pledgor' s
pledge pursuant to the terms hereof.
25. NOTICES. Any notice required or permitted hereunder shall be given,
(a) with respect to the Pledgor, to the Pledgor in care of UniCapital
Corporation at its address indicated in Section 11.2 of the Credit Agreement and
(b) with respect to the Agent or a Lender, at the Agent's or such
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Lender's address indicated in Section 11.2 of the Credit Agreement. All such
notices shall be given and shall be effective as provided in Section 11.2 of the
Credit Agreement.
26. GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED,
IN SUCH STATE.
(b) THE PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF DADE,
STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE PLEDGOR EXPRESSLY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE
EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN
ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE PLEDGOR HEREBY IRREVOCABLY
SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE PLEDGOR AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER
PROVIDED IN SECTION 11.2 OF THE CREDIT AGREEMENT, OR BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF FLORIDA.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL
PRECLUDE ANY SECURED PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY
JURISDICTION WHERE ANY PLEDGOR OR ANY OF THE PLEDGOR'S PROPERTY OR
ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE
APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE PLEDGOR HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO
THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER
APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
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<PAGE> 296
DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION
THEREWITH, THE PLEDGOR AND THE AGENT ON BEHALF OF THE LENDERS HEREBY
AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND
HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT ANY SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION
OR PROCEEDING.
[SIGNATURE PAGES FOLLOW.]
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<PAGE> 297
IN WITNESS WHEREOF, the parties have duly executed this Pledge and
Security Agreement on the day and year first written above.
PLEDGOR:
____________________________________
By:_________________________________
Name________________________________
Title:______________________________
Signature Page 1 of 2
<PAGE> 298
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Secured Parties
By:_________________________________
Name:_______________________________
Title: _____________________________
Signature Page 2 of 2
<PAGE> 299
<TABLE>
<CAPTION>
SCHEDULE I
[Name of Pledgor]
Name of Borrower or Description of Class of Number of Certificate Par Value Percentage of
- - ------------------- -------------- -------- --------- ----------- --------- -------------
Other Subsidiary Beneficial Interests in Stock, Shares or other Number(s) Beneficial
- - ----------------- ----------------------- ------ --------------- --------- ----------
Borrower Partnership Interests Interests,
-------- ----------- --------- ----------
Interest or Outstanding Capital Stock,
----------- ----------- --------------
other Partnership
----- -----------
Interest Interests or
-------- ------------
other Interests
---------------
Outstanding and
---------------
Owned by
--------
Pledgor
-------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 300
EXHIBIT A
FORM OF
PLEDGE AND SECURITY AGREEMENT SUPPLEMENT
THIS PLEDGE AND SECURITY AGREEMENT SUPPLEMENT (as from time to time
amended, modified or supplemented, this "Supplement"), dated as of
______________, 19__ is made by and between _____________________________ (the
"Pledgor"), and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States, as agent
(the "Agent") for each of the financial institutions (the "Lenders") now or
hereafter party to that certain Credit Agreement dated as of June 10, 1998 (the
"Credit Agreement") among First Security Bank, National Association (the
"Initial Borrower"), solely as Trustee on behalf of the trust created by that
certain Trust Agreement dated June ___, 1998 between First Security Bank,
National Association and Aircraft 11111, Inc., certain UniCapital Subsidiary
Trusts and UniCapital Special Purpose Corporations designated as Borrowing
Affiliates under the Credit Agreement (the Initial Borrower and such Borrowing
Affiliates are referred to hereinafter as a "Borrower" or collectively as the
"Borrowers"), the Lenders and the Agent. All capitalized terms used but not
otherwise defined herein shall have the respective meanings assigned thereto in
the Pledge Agreement (as defined below).
WHEREAS, the Pledgor is a party to that certain Pledge and Security
Agreement dated as of _______________ ___, _____ by the Pledgor in favor of the
Agent for the benefit of the Secured Parties (the "Pledge Agreement");
WHEREAS, the Pledgor is required under the terms of the Credit
Agreement and the Pledge Agreement to cause certain beneficial interests and
certain shares of capital stock, partnership interests or other indicia of
ownership under any jurisdiction held by it and listed on Schedule I to this
Supplement (the "Additional Interests") to become subject to the Pledge
Agreement; and
WHEREAS, a material part of the consideration given in connection with
and as an inducement to the execution and delivery of the Credit Agreement by
the Agent and the Lenders and to the making of the Loans to or for the benefit
of the Borrowers pursuant to the Credit Agreement was the obligation of the
Pledgor to pledge to the Agent for the benefit of the Secured Parties the
Additional Interests; and
WHEREAS, the Agent and the Lenders have required the Pledgor to pledge
to the Agent for the benefit of the Secured Parties all of the Additional
Interests in accordance with the terms of the Credit Agreement and the Pledge
Agreement;
NOW, THEREFORE, the Pledgor hereby agrees as follows with the Agent,
for the benefit of the Secured Parties:
1. The Pledgor hereby reaffirms and acknowledges the pledge and
collateral assignment to, and the grant of security interest in, the Additional
Interests contained in the Pledge Agreement and pledges and collaterally assigns
to the Agent for the benefit of the Secured Parties, and grants to the Agent for
the benefit of the Secured Parties a first priority security interest in:
(a) all Additional Interests;
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<PAGE> 301
(b) all cash, securities, dividends, rights, and other
property at any time and from time to time declared or distributed in
respect of or in exchange for any or all of the Additional Interests,
other than cash dividends permitted to be retained by the Pledgor
hereunder;
(c) all other property hereafter delivered to the Agent in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such property
and all cash, securities, interest, dividends, rights, and other
property at any time and from time to time declared or distributed in
respect of or in exchange for any or all of the Additional Interests;
(d) all proceeds of any of the foregoing.
The Pledgor hereby acknowledges, agrees and confirms that, by its execution of
this Supplement, the Additional Interests constitute "Pledged Interests" under
and are subject to the Pledge Agreement. Each of the representations and
warranties with respect to Pledged Interests contained in the Pledge Agreement
is hereby made by the Pledgor with respect to the Additional Interests. A
revised Schedule I to the Pledge Agreement (in the form of Schedule I hereto)
reflecting the Additional Interests and all other Pledged Interests, together
with stock certificates representing the Additional Interests with undated stock
powers duly executed in blank by the Pledgor, have been delivered herewith to
the Agent.
IN WITNESS WHEREOF, the Pledgor has caused this Supplement to be duly
executed by its authorized officer as of the day and year first above written.
PLEDGOR:
[_________________]
By:_________________________________
Name:_______________________________
Title:______________________________
Acknowledged and accepted:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Secured Parties
By:_______________________________
Name:_____________________________
Title:____________________________
<PAGE> 302
<TABLE>
<CAPTION>
SCHEDULE I
[Name of Pledgor]
Name of Borrower or Description of Class of Number of Certificate Par Value Percentage of
- - ------------------- -------------- -------- --------- ----------- --------- -------------
Other Subsidiary Beneficial Interests in Stock, Shares or other Number(s) Beneficial
- - ----------------- ----------------------- ------ --------------- --------- ----------
Borrower Partnership Interests Interests,
-------- ----------- --------- ----------
Interest or Outstanding Capital Stock,
----------- ----------- --------------
other Partnership
----- -----------
Interest Interests or
-------- ------------
other Interests
---------------
Outstanding and
---------------
Owned by
--------
Pledgor
-------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 303
EXHIBIT T-2
Form of Pledge and Security Agreement
(for pledged interest in UniCapital Special Purpose Corporation,
Beneficial Owner, Applicable Intermediary or other Subsidiary)
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (as from time to time amended,
modified or supplemented, the "Agreement") is made and entered into as of this
_____ day of _______, 19__ by and between ________________________________, a
___________ corporation (the "Pledgor") and NATIONSBANK, NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the United
States, as administrative agent (the "Agent") for each of the financial
institutions (collectively the "Lenders" and together with the Agent, the
"Secured Parties") now or hereafter party to the Credit Agreement (as defined
below). All capitalized terms used but not otherwise defined herein shall have
the respective meanings assigned thereto in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Agent and the Lenders have agreed to provide a revolving
credit facility to First Security Bank, National Association (the "Initial
Borrower"), solely as Trustee on behalf of the trust created by that certain
Trust Agreement (11111) dated June ___, 1998 between First Security Bank,
National Association and Aircraft 11111, Inc., certain UniCapital Subsidiary
Trusts and UniCapital Special Purpose Corporations designated as a Borrowing
Affiliates under the Credit Agreement (the Initial Borrower and such Borrowing
Affiliates are referred to hereinafter individually as a "Borrower" and
collectively as the "Borrowers") pursuant to that certain Credit Agreement dated
as of June 10, 1998 among the Borrowers, the Agent and the Lenders (as from time
to time amended, revised, modified, supplemented or amended and restated, the
"Credit Agreement"); and
WHEREAS, one or more of the Borrowers or Guarantors under the Credit
Agreement is a direct, wholly owned Subsidiary of the Pledgor as more
particularly described on Schedule I hereto; and
WHEREAS, pursuant to Section 2.14 of the Credit Agreement the Pledgor
is required to enter into this Agreement and to pledge to the Secured Parties
the Pledged Interests (as defined below) as security for the payment of the
Secured Obligations (as defined below) in accordance with the terms of this
Pledge Agreement; and
WHEREAS, the obligation of the Pledgor to enter into this Agreement
pursuant to Section 2.14 of the Credit Agreement was material to the Secured
Parties' entering into the Credit Agreement and the other Loan Documents; and
WHEREAS, as collateral security for the payment and performance of each
of the Borrowers' Obligations under the Credit Agreement and any other Loan
Documents, the Pledgor is willing to pledge and grant to the Agent for the
benefit of the Secured Parties a first priority security interest
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<PAGE> 304
in all of the shares of common stock, partnership interests, or other equivalent
indicia of ownership, whether now in existence or hereafter issued, of each of
the Guarantors, all Borrowers in which the Pledgor has an interest, and all
Persons owning, now or hereafter, beneficial interests in any of the Borrowers,
all of which are required to be subject to a Pledge Agreement pursuant to the
Credit Agreement (collectively, the "Pledged Interests") including without
limitation the Pledged Interests in such Subsidiaries as more particularly
described on Schedule I hereto (such Subsidiaries, together with all other
Subsidiaries whose common stock, partnership interests or other indicia of
ownership may be required to be subject to a Pledge Agreement from time to time,
are hereinafter referred to collectively as the "Pledged Subsidiaries"); and
NOW, THEREFORE, in order to induce the Secured Parties to enter into
the Credit Agreement and the other Loan Documents and to make Loans or for the
account of the Borrowers and in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. PLEDGE OF STOCK; OTHER COLLATERAL.
(a) As collateral security for the payment and performance by each
Borrower of its now or hereafter existing Obligations under the Credit Agreement
and any other Loan Documents (collectively with the Obligations, the "Secured
Obligations"), the Pledgor hereby pledges and collaterally assigns to the Agent
for the benefit of the Secured Parties, and grants to the Agent for the benefit
of the Secured Parties a first priority lien and security interest in:
(i) all Pledged Interests;
(ii) all cash, securities, dividends, rights, and
other property at any time and from time to time declared or
distributed in respect of or in exchange for any or all of the Pledged
Interests, other than cash dividends permitted to be retained by the
Pledgor under Section 9 hereof;
(iii) all other property hereafter delivered to the
Agent in substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such property
and all cash, securities, interest, dividends, rights, and other
property at any time and from time to time declared or distributed in
respect of or in exchange for any or all of the Pledged Interests; and
(iv) all proceeds of any of the foregoing.
All such Pledged Interests, certificates, instruments, cash, securities,
interest, dividends, rights and other property referred to in this Section 1,
other than cash dividends issued in respect of such Pledged Interests that are
permitted to be retained by the Pledgor under Section 9 hereof, are herein
collectively referred to as the "Collateral." Each of the Pledged Interests
described on Schedule I in effect from time to time is currently owned by the
Pledgor, and all of the Pledged Interests described in Schedule I are
represented by the stock certificates or partnership certificates or other
certificated indicia of ownership listed on such Schedule I hereto (the
"Certificated Pledged Interests"). Certificated Pledged Interests, with undated
stock powers or other appropriate transfer powers duly executed in blank the
Pledgor, have been delivered to the Agent.
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<PAGE> 305
(b) The Pledgor agrees to deliver all the Collateral to the Agent at
such location or locations as the Agent shall from time to time designate by
written notice pursuant to Section 25 hereof for its custody at all times until
termination of this Agreement, together with such instruments of assignment and
transfer as requested by the Agent.
(c) The Pledgor agrees to deliver all share certificates, documents,
agreements, financing statements, amendments thereto, assignments or other
writings as the Agent may request to carry out the terms of this Agreement or to
protect or enforce the lien and security interest in the Collateral hereunder
granted to the Agent for the benefit of the Secured Parties and further agrees
to do and cause to be done all things determined by the Agent to be necessary to
perfect and keep in full force the Lien in the Collateral hereunder granted in
favor of the Agent for the benefit of the Secured Parties, including, but not
limited to, the prompt payment of all documented out-of-pocket fees and expenses
incurred in connection with any filings made to perfect or continue the lien and
security interest in the Collateral hereunder granted in favor of the Agent for
the benefit of the Secured Parties. The Pledgor agrees to make appropriate
entries upon its books and records (including without limitation its stock
record, its partnership record, its transfer books and any other books or
records recording ownership interests therein) disclosing the Lien in the
Collateral hereunder granted to the Agent for the benefit of the Secured
Parties, and agrees to cause the issuers of the Pledged Interests to enter into
"Control Agreements" in form and substance satisfactory to the Agent.
(d) All advances, charges, costs and expenses, including reasonable
attorneys' fees, incurred or paid by any Secured Party in exercising any right,
power or remedy conferred by this Agreement, or in the enforcement thereof,
shall become a part of the Secured Obligations and shall be paid to the Agent
for the benefit of the Secured Parties by the Pledgor immediately upon demand
therefor, with interest thereon until paid in full at the Base Rate; provided,
however, that during any time an Event of Default has occurred and is
continuing, interest thereon shall be paid in full at the Default Rate for Base
Rate Loans.
2. STATUS OF PLEDGED INTERESTS. The Pledgor hereby represents and
warrants to the Agent for the benefit of the Secured Parties that (i) all of the
shares of Pledged Interests are validly issued and outstanding, fully paid and
nonassessable and constitute all authorized, issued and outstanding shares of
common stock, partnership interests or other indicia of ownership of each of the
Pledged Subsidiaries of the Pledgor, (ii) the Pledgor is the registered and
record and beneficial owner of such Pledged Interests, free and clear of all
Liens, charges, equities, encumbrances and restrictions on pledge or transfer
(other than (A) Permitted Liens, and (B) restrictions imposed by applicable
law), (iii) the Pledgor has full corporate power, legal right and lawful
authority to execute this Agreement and to pledge, assign and transfer such
Pledged Interests in the manner and form hereof, and (iv) the pledge, assignment
and delivery of the Pledged Interests by the Pledgor to the Agent for the
benefit of the Secured Parties pursuant to this Agreement creates, together with
the delivery of the certificates evidencing such Pledged Interests that are
Certificated Pledged Interests, which delivery has heretofore been accomplished,
a valid and perfected first priority security interest in the Pledged Interests
in favor of the Agent for the benefit of the Secured Parties, securing the
payment of the Secured Obligations. Except as permitted under Section 8.6 of the
Credit Agreement, none of the Pledged Interests (nor any interest therein or
thereto) shall be sold, transferred or assigned, nor any Lien created therein,
without the Agent's prior written consent, which may be withheld for any reason.
The Pledgor covenants with the Agent for the benefit of the Secured Parties that
the Pledgor shall at all times cause the Certificated Pledged Interests to be
represented by the certificates now and hereafter delivered to the Agent in
accordance with Section 1 hereof and that the Pledgor shall not cause, suffer or
permit any of the Pledged Subsidiaries to issue or create any
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<PAGE> 306
capital stock, partnership interests or other certificated ownership interests,
or securities convertible into, or exercisable or exchangeable for, capital
stock, partnership interests or other certificated ownership interests at any
time during the term of this Agreement other than the Pledgor and subject to
this Agreement pursuant to Section 23 hereof.
3. PRESERVATION AND PROTECTION OF COLLATERAL.
(a) The Agent shall be under no duty or liability with respect to the
collection, protection or preservation of the Collateral, or otherwise, other
than the obligation to deal with the Collateral while in its possession in the
same manner as the Agent deals with similar securities or property for its own
account.
(b) The Pledgor agrees to pay when due all taxes, charges and
assessments against the Collateral, unless being contested in good faith by
appropriate proceedings diligently conducted and against which adequate reserves
have been established in accordance with GAAP and evidenced to the satisfaction
of the Agent and provided further that all enforcement proceedings in the nature
of levy or foreclosure are effectively stayed. Upon the failure of the Pledgor
to so pay or contest such taxes, charges, Liens or assessments, the Agent at its
option may pay or contest any of them (the Agent having the sole right to
determine the legality or validity and the amount necessary to discharge such
taxes, charges, Liens or assessments).
4. DEFAULT. Upon the occurrence and during the continuance of any Event
of Default, the Agent is given full power and authority, then or at any time
thereafter, to sell, assign and deliver or collect the whole or any part of the
Collateral, or any substitute therefor or any addition thereto, in one or more
sales, with or without any previous demands or demand of performance or, to the
extent permitted by law, notice or advertisement, in such order as the Agent may
elect; and any such sale may be made either at public or private sale at the
Agent's place of business or elsewhere, either for cash or upon credit or for
future delivery, at such price as the Agent may reasonably deem fair; and the
Agent may be the purchaser of any or all Collateral so sold and hold the same
thereafter in its own right free from any claim of the Pledgor or right of
redemption. Demands of performance, advertisements and presence of property and
sale and notice of sale are hereby waived to the extent permissible by law. Any
sale hereunder may be conducted by an auctioneer or any officer or agent of the
Agent. The Pledgor recognizes that the Agent may be unable to effect a public
sale of the Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "Securities Act"), and applicable law,
and may be otherwise delayed or adversely affected in effecting any sale by
reason of present or future restrictions thereon imposed by governmental
authorities, and that as a consequence of such prohibitions and restrictions the
Agent may be compelled (i) to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the stock for their own account, for investment and not with a view
to the distribution or resale thereof, or (ii) to seek regulatory approval of
any proposed sale or sales, or (iii) to limit the amount of Collateral sold to
any Person or group. The Pledgor agrees and acknowledges that private sales so
made may be at prices and upon terms less favorable to the Pledgor than if such
Collateral was sold either at public sales or at private sales not subject to
other regulatory restrictions, and that the Agent has no obligation to delay the
sale of any of the Collateral for the period of time necessary to permit the
issuer of such Collateral to register or otherwise qualify the Pledged
Interests, even if such issuer would agree to register or otherwise qualify for
public sale under the Securities Act or applicable state law. The Pledgor
further agrees, to the extent permitted by applicable law, that the use of
private sales made under the foregoing circumstances to dispose of the
Collateral shall be deemed to be dispositions made in a commercially reasonable
manner. The
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<PAGE> 307
Pledgor hereby acknowledges that a ready market may not exist for the Pledged
Interests if such Pledged Interests are not traded on a national securities
exchange or quoted on an automated quotation system and agrees and acknowledges
that in such event the Pledged Interests may be sold for an amount less than a
pro rata share of the fair market value of the issuer's assets minus its
liabilities. In addition to the foregoing, the Secured Parties may exercise such
other rights and remedies as may be available under the Loan Documents, at law
or in equity.
5. PROCEEDS OF SALE. The proceeds of the sale of any of the Collateral
and all sums received or collected from or on account of such Collateral shall
be applied to the payment of expenses incurred or paid by the Agent in
connection with any holding, sale, transfer or delivery of the Collateral, to
the payment of any other costs, charges, reasonable attorneys' fees or expenses
mentioned herein, and to the payment of the Secured Obligations or any part
thereof, all in such order and manner as is provided in Section 9.5 of the
Credit Agreement and otherwise as the Agent may determine and as permitted by
applicable law. The Agent shall, upon satisfaction in full of all such Secured
Obligations, pay any balance to the Pledgor or otherwise as may be required by
applicable law.
6. PRESENTMENTS, DEMANDS AND NOTICES. The Agent shall not be under any
duty or obligation whatsoever to make or give any presentments, demands for
performances, notices of nonperformance, protests, notice of protest or notice
of dishonor in connection with any obligations or evidences of indebtedness held
thereby as collateral, or in connection with any obligations or evidences of
indebtedness which constitute in whole or in part the Secured Obligations
secured hereunder.
7. ATTORNEY-IN-FACT. The Pledgor hereby appoints the Agent as its
attorney-in-fact for the purposes of carrying out the provisions of this
Agreement and taking any action and executing any instrument which the Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is coupled with an interest and is irrevocable; provided, that the Agent shall
have and may exercise rights under this power of attorney only upon the
occurrence and during the continuance of an Event of Default. Without limiting
the generality of the foregoing, upon the occurrence and during the continuance
of an Event of Default, the Agent shall have the right and power to receive,
endorse and collect all checks and other orders for the payment of money made
payable to the Pledgor representing any dividend, interest payment, principal
payment or other distribution payable or distributable in respect of, or
otherwise constituting, the Collateral or any part thereof and to give full
discharge for the same.
8. WAIVER BY THE PLEDGOR. The Pledgor waives (to the extent permitted
by applicable law) any right to require the Agent or any Lender or any other
obligee of the Secured Obligations to (a) proceed against any Person, including
without limitation any Guarantor, (b) proceed against or exhaust any Collateral
or other collateral for the Secured Obligations, or (c) pursue any other remedy
in its power; and waives (to the extent permitted by applicable law) any defense
arising by reason of any disability or other defense of any other Person,
including without limitation any Guarantor, or by reason of the cessation from
any cause whatsoever of the liability of any other Person, including without
limitation, any Guarantor. Without limiting any rights of the Lenders under
Section 2.14 of the Credit Agreement, the Agent may at any time deliver (without
representation, recourse or warranty) the Collateral or any part thereof to the
Pledgor and the receipt thereof by the Pledgor shall be a complete and full
acquittance for the Collateral so delivered, and the Agent shall thereafter be
discharged from any liability or responsibility therefor.
T-2-5
<PAGE> 308
9. DIVIDENDS AND VOTING RIGHTS.
(a) All dividends and other distributions with respect to the Pledged
Interests shall be subject to the pledge hereunder, except for cash dividends
which are, to the extent permitted to be made under the Credit Agreement,
permitted to be retained by the Pledgor so long as no Event of Default shall
have occurred and be continuing, and any such dividends may be retained by the
Pledgor free from any Lien hereunder. Upon the occurrence and during the
continuance of any Event of Default, all such cash and other dividends shall be
promptly delivered to the Agent (together, if the Agent shall request, with
undated stock powers or instruments of assignment duly executed in blank affixed
to any stock certificate or other negotiable document or instrument so
distributed) to be held, released or disposed of by it hereunder or, at the
option of the Agent, to be applied to the Secured Obligations as they become
due.
(b) So long as no Event of Default shall have occurred and be
continuing, the registration of the Collateral in the name of the Pledgor shall
not be changed and the Pledgor shall be entitled to exercise all voting and
other rights and powers pertaining to the Collateral for all purposes not
inconsistent with the terms hereof.
(c) Upon the occurrence and during the continuance of any Event of
Default, at the option of the Agent, all rights of the Pledgor to receive and
retain dividends upon the Collateral shall cease and shall thereupon be vested
in the Agent for the benefit of the Secured Parties.
(d) Upon the occurrence and during the continuance of any Event of
Default, at the option of the Agent, all rights of the Pledgor to exercise the
voting or consensual rights and powers which it is authorized to exercise with
respect to the Collateral pursuant to subsection (b) above shall cease and the
Agent may thereupon (but shall not be obligated to), at its request, cause such
Collateral to be registered in the name of the Agent or its nominee or agent for
the benefit of the Secured Parties and/or exercise such voting or consensual
rights and powers as appertain to ownership of such Collateral, and to that end
the Pledgor hereby appoints the Agent as its proxy, with full power of
substitution, to vote and exercise all other rights as a shareholder with
respect to the Pledged Interests hereunder upon the occurrence and during the
continuance of any Event of Default, which proxy is coupled with an interest and
is irrevocable prior to termination of this Agreement as set forth in Section 22
hereof, and the Pledgor hereby agrees to provide such further proxies as the
Agent may request; provided, however, that the Agent in its discretion may from
time to time refrain from exercising, and shall not be obligated to exercise,
any such voting or consensual rights or such proxy.
10. POWER OF SALE. Until the Facility Termination Date, the power of
sale and other rights, powers and remedies granted to the Agent for the benefit
of the Secured Parties hereunder shall continue to exist and may be exercised by
the Agent at any time and from time to time irrespective of the fact that any
Secured Obligations or any part thereof may have become barred by any statute of
limitations or that the liability of the Pledgor may have ceased.
11. OTHER RIGHTS. The rights, powers and remedies given to the Agent
for the benefit of the Secured Parties by this Agreement shall be in addition to
all rights, powers and remedies given to any of the Secured Parties by virtue of
any statute or rule of law. Any forbearance or failure or delay by the Agent in
exercising any right, power or remedy hereunder shall not be deemed to be a
waiver of such right, power or remedy, and any single or partial exercise of any
right, power or remedy hereunder shall not preclude the further exercise
thereof. Every right, power and remedy of
T-2-6
<PAGE> 309
the Secured Parties hereunder shall continue in full force and effect until such
right, power or remedy is specifically waived by the Required Lenders by an
instrument in writing.
12. ANTI-MARSHALLING PROVISIONS. The right is hereby given by the
Pledgor to the Agent, for the benefit of the Secured Parties, to make releases
(whether in whole or in part) of all or any part of the Collateral agreeable to
the Agent without notice to, or the consent, approval or agreement of other
parties and interests, including junior lienors, which releases shall not impair
in any manner the validity of or priority of the Liens and security interests in
the remaining Collateral conferred under such documents, nor release the Pledgor
from personal liability for the Secured Obligations hereby secured.
Notwithstanding the existence of any other security interest in the Collateral
held by the Agent, for the benefit of the Secured Parties, the Agent shall have
the right to determine the order in which any or all of the Collateral shall be
subjected to the remedies provided in this Agreement. The proceeds realized upon
the exercise of the remedies provided herein shall be applied by the Agent, for
the benefit of the Secured Parties, in the manner provided in Section 9.5 of the
Credit Agreement. The Pledgor hereby waives any and all right to require the
marshalling of assets in connection with the exercise of any of the remedies
permitted by applicable law or provided herein.
13. ABSOLUTE RIGHTS AND OBLIGATIONS. All rights of the Secured Parties,
and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document or any other agreement or instrument
relating to any of the Secured Obligations;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from the
Credit Agreement, any other Loan Document or any other agreement or
instrument relating to any of the Secured Obligations;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
or
(d) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, the Pledgor in respect of the
Secured Obligations or of this Agreement.
14. DEFINITIONS. All terms used herein unless otherwise defined in the
Credit Agreement shall be defined in accordance with the appropriate definitions
appearing in the Uniform Commercial Code as in effect in Florida, and such
definitions are hereby incorporated herein by reference and made a part hereof.
15. ENTIRE AGREEMENT. This Agreement, together with the Credit
Agreement, the Guaranty Agreement and the other Loan Documents, constitutes and
expresses the entire understanding between the parties hereto with respect to
the subject matter hereof, and supersedes all prior agreements and
understandings, inducements, commitments or conditions, express or implied, oral
or written, except as herein contained. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof. Neither this Agreement nor any portion or provision hereof
may be changed, altered, modified, supplemented,
T-2-7
<PAGE> 310
discharged, canceled, terminated, or amended orally or in any manner other than
by an agreement, in writing signed by the parties hereto.
16. FURTHER ASSURANCES. The Pledgor agrees at its own expense to do
such further acts and things, and to execute and deliver such additional
conveyances, assignments, financing statements, agreements and instruments, as
the Agent may at any time request in connection with the administration or
enforcement of this Agreement or related to the Collateral or any part thereof
or in order better to assure and confirm unto the Agent its rights, powers and
remedies for the benefit of the Secured Parties hereunder. The Pledgor hereby
consents and agrees that the issuers of or obligors in respect of the Collateral
shall be entitled to accept the provisions hereof as conclusive evidence of the
right of the Agent, on behalf of the Secured Parties, to exercise its rights
hereunder with respect to the Collateral, notwithstanding any other notice or
direction to the contrary heretofore or hereafter given by the Pledgor or any
other Person to any of such issuers or obligors.
17. BINDING AGREEMENT; ASSIGNMENT. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and to their respective successors and assigns, except
that the Pledgor shall not assign this Agreement or any interest herein or in
the Collateral, or any part thereof, or otherwise pledge, encumber or grant any
option with respect to the Collateral, or any part thereof, or any cash or
property held by the Agent as Collateral under this Agreement. All references
herein to the Agent shall include any successor thereof, each Lender and any
other obligees from time to time of the Secured Obligations.
18. SWAP AGREEMENTS. All obligations of any of the Borrowers to any
Lender or any affiliate of Lender under Swap Agreements shall be deemed to be
additional Secured Obligations secured hereby (in each such case unless
otherwise agreed in writing by such Lender or affiliate of such Lender), and
each Lender or affiliate of a Lender party to any such Swap Agreement shall be
deemed to be a Secured Party hereunder.
19. SEVERABILITY. In case any Lien, security interest or other right of
any Secured Party or any provision hereof shall be held to be invalid, illegal
or unenforceable, such invalidity, illegality or unenforceability shall not
affect any other Lien, security interest or other right granted hereby or
provision hereof.
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
21. INDEMNIFICATION. Without limitation of Section 11.9 of the Credit
Agreement or any other indemnification provision in any Loan Document, the
Pledgor hereby covenants and agrees, to pay, indemnify, and hold the Secured
Parties harmless from and against any and all out-of-pocket liabilities, costs,
expenses or disbursements of any kind or nature whatsoever arising in connection
with any claim or litigation by any Person resulting from the execution,
delivery, enforcement, performance and administration of this Agreement or the
Loan Documents, or the transactions contemplated hereby or thereby, or in any
respect relating to the Collateral or any transaction pursuant to which the
Pledgor has incurred any Obligation (all the foregoing, collectively, the
"indemnified liabilities"); provided, however, that the Pledgor shall not have
any obligation to a party seeking indemnification hereunder with respect to
indemnified liabilities directly or primarily arising from the willful
misconduct or gross negligence of such party. The agreements in this Section 21
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<PAGE> 311
shall survive repayment of all Secured Obligations, termination or expiration of
this Agreement and occurrence of the Facility Termination Date.
22. TERMINATION. Subject to Section 2.14 of the Credit Agreement, this
Agreement and all obligations of the Pledgor hereunder shall terminate on the
Facility Termination Date, at which time the Liens and rights granted to the
Agent for the benefit of the Secured Parties hereunder shall automatically
terminate and no longer be in effect, and the Collateral shall automatically be
released from the Liens created hereby. Upon such termination of this Agreement,
the Agent shall, at the sole expense of the Pledgor, deliver to the Pledgor
Certificated Pledged Interests, any other certificates evidencing the Pledged
Interests (and any other property received as a dividend or distribution or
otherwise in respect of the Pledged Interests then in its custody), together
with any cash then constituting the Collateral, not then sold or otherwise
disposed of in accordance with the provisions hereof and take such further
actions as may be necessary to effect the same and as shall be reasonably
acceptable to the Agent.
23. ADDITIONAL INTERESTS. If the Pledgor shall acquire or hold (a) any
additional shares of capital stock of any Pledged Subsidiary or (b) any shares
of capital stock of any Subsidiary not listed on Schedule I hereto which are
required to be subject to a Pledge Agreement pursuant to the terms of Section
2.14, Section 5.2, or Section 5.3 of the Credit Agreement or any other provision
of the Credit Agreement (any such shares described in clauses (a) or (b) above
being referred to herein as the "Additional Interests"), the Pledgor shall
deliver to the Agent for the benefit of the Secured Parties (i) a revised
Schedule I hereto reflecting the ownership and pledge of such Additional
Interests and (ii) a Pledge and Security Agreement Supplement in the form of
Exhibit A hereto with respect to such Additional Interests duly completed and
signed by the Pledgor. The Pledgor shall comply with the requirements of this
Section 23 concurrently with the acquisition of any such Additional Interests in
the case of shares described in clause (a) above, and within the time period
specified in such Section 2.14, Section 5.2 or Section 5.3 or elsewhere in the
Credit Agreement with respect to shares described in clause (b) above.
24. REMEDIES CUMULATIVE. All remedies hereunder are cumulative and are
not exclusive of any other rights and remedies of the Agent provided by law or
under the Credit Agreement, the other Loan Documents, or other applicable
agreements or instruments. The making of the Loans to or for the benefit of any
of the Borrowers pursuant to the Credit Agreement shall be conclusively presumed
to have been made or extended, respectively, in reliance upon the Pledgor's
pledge pursuant to the terms hereof.
25. NOTICES. Any notice required or permitted hereunder shall be given,
(a) with respect to the Pledgor, to the Pledgor in care of UniCapital
Corporation at its address indicated in Section 11.2 of the Credit Agreement and
(b) with respect to the Agent or a Lender, at the Agent's or such Lender's
address indicated in Section 11.2 of the Credit Agreement. All such notices
shall be given and shall be effective as provided in Section 11.2 of the Credit
Agreement.
26. GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED,
IN SUCH STATE.
T-2-9
<PAGE> 312
(b) THE PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF DADE,
STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE PLEDGOR EXPRESSLY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE
EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN
ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE PLEDGOR HEREBY IRREVOCABLY
SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE PLEDGOR AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER
PROVIDED IN SECTION 11.2 OF THE CREDIT AGREEMENT, OR BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF FLORIDA.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL
PRECLUDE ANY SECURED PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY
JURISDICTION WHERE THE PLEDGOR OR ANY OF THE PLEDGOR'S PROPERTY OR
ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE
APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE PLEDGOR HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO
THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER
APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION THEREWITH, THE PLEDGOR AND THE AGENT ON
BEHALF OF THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT ANY SUCH PERSON MAY
HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
[SIGNATURE PAGES FOLLOW.]
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<PAGE> 313
IN WITNESS WHEREOF, the parties have duly executed this Pledge and
Security Agreement on the day and year first written above.
PLEDGOR:
____________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Secured Parties
By:_________________________________
Name:_______________________________
Title:______________________________
Signature Page 1 of 1
<PAGE> 314
<TABLE>
<CAPTION>
SCHEDULE I
[Name of Pledgor]
Name of Subsidiary Class of Number of Certificate Par Value Percentage of
- - ------------------ -------- --------- ----------- --------- -------------
Stock, Shares or other Number(s) Capital Stock,
------ --------------- --------- --------------
Partnership Interests Partnership
----------- --------- -----------
Interest or Outstanding Interests or
----------- ----------- ------------
other other Interests
----- ---------------
Interest Outstanding and
-------- ---------------
Owned by
--------
Parent
------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 315
EXHIBIT A
FORM OF
PLEDGE AND SECURITY AGREEMENT SUPPLEMENT
THIS PLEDGE AND SECURITY AGREEMENT SUPPLEMENT (as from time to time
amended, modified or supplemented, this "Supplement"), dated as of
______________, 19__ is made by and between _____________________________ (the
"Pledgor"), and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States, as
administrative agent (the "Agent") for each of the financial institutions (the
"Lenders") now or hereafter party to that certain Credit Agreement dated as of
June 10, 1998 (the "Credit Agreement") among First Security Bank, National
Association (the "Initial Borrower"), solely as Trustee on behalf of the trust
created by that certain Trust Agreement dated June __, 1998 between First
Security Bank, National Association and Aircraft 11111, Inc., certain UniCapital
Subsidiary Trusts and UniCapital Special Purpose Corporations designated as
Borrowing Affiliates under the Credit Agreement (the Initial Borrower and such
Borrowing Affiliates are referred to hereinafter as a "Borrower" or collectively
as the "Borrowers"), the Lenders and the Agent. All capitalized terms used but
not otherwise defined herein shall have the respective meanings assigned thereto
in the Pledge Agreement (as defined below).
WHEREAS, the Pledgor is a party to that certain Pledge and Security
Agreement dated as of _______________ ___, 19__ by the Pledgor in favor of the
Agent for the benefit of the Secured Parties (the "Pledge Agreement");
WHEREAS, the Pledgor is required under the terms of the Credit
Agreement and the Pledge Agreement to cause certain shares of capital stock,
partnership interests or other indicia of ownership under any jurisdiction held
by it and listed on Schedule I to this Supplement (the "Additional Interests")
to become subject to the Pledge Agreement; and
WHEREAS, a material part of the consideration given in connection with
and as an inducement to the execution and delivery of the Credit Agreement by
the Agent and the Lenders and to the making of the Loans to or for the benefit
of the Borrowers pursuant to the Credit Agreement was the obligation of the
Pledgor to pledge to the Agent for the benefit of the Secured Parties the
Additional Interests; and
WHEREAS, the Agent and the Lenders have required the Pledgor to pledge
to the Agent for the benefit of the Secured Parties all of the Additional
Interests in accordance with the terms of the Credit Agreement and the Pledge
Agreement;
NOW, THEREFORE, the Pledgor hereby agrees as follows with the Agent,
for the benefit of the Secured Parties:
1. The Pledgor hereby reaffirms and acknowledges the pledge and
collateral assignment to, and the grant of security interest in, the Additional
Interests contained in the Pledge Agreement and pledges and collaterally assigns
to the Agent for the benefit of the Secured Parties, and grants to the Agent for
the benefit of the Secured Parties a first priority security interest in, the
Additional Interests and all of the following:
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<PAGE> 316
(a) all cash, securities, dividends, rights, and other
property at any time and from time to time declared
or distributed in respect of or in exchange for any
or all of the Additional Interests, other than cash
dividends permitted to be retained by the Pledgor
hereunder;
(b) all other property hereafter delivered to the Agent
in substitution for or in addition to any of the
foregoing, all certificates and instruments
representing or evidencing such property and all
cash, securities, interest, dividends, rights, and
other property at any time and from time to time
declared or distributed in respect of or in exchange
for any or all of the Additional Interests;
(c) all proceeds of any of the foregoing.
The Pledgor hereby acknowledges, agrees and confirms that, by its execution of
this Supplement, the Additional Interests constitute "Pledged Interests" under
and are subject to the Pledge Agreement. Each of the representations and
warranties with respect to Pledged Interests contained in the Pledge Agreement
is hereby made by the Pledgor with respect to the Additional Interests. A
revised Schedule I to the Pledge Agreement (in the form of Schedule I hereto)
reflecting the Additional Interests and all other Pledged Interests, together
with stock certificates representing the Additional Interests with undated stock
powers duly executed in blank by the Pledgor, have been delivered herewith to
the Agent.
IN WITNESS WHEREOF, the Pledgor has caused this Supplement to be duly
executed by its authorized officer as of the day and year first above written.
PLEDGOR
By:_________________________________
Name:_______________________________
Title:______________________________
Acknowledged and accepted:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Secured Parties
By:_______________________________
Name:_____________________________
Title:____________________________
T-2-15
<PAGE> 317
<TABLE>
<CAPTION>
SCHEDULE I
[Name of Pledgor]
Name of Subsidiary Class of Number of Certificate Par Value Percentage of
- - ------------------ -------- --------- ----------- --------- -------------
Stock, Shares or other Number(s) Capital Stock,
------ --------------- --------- --------------
Partnership Interests Partnership
----------- --------- -----------
Interest or Outstanding Interests or
----------- ----------- ------------
other other Interests
----- ---------------
Interest Outstanding and
-------- ---------------
Owned by
--------
Parent
------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 318
Schedule 3.3
Information Regarding Collateral
I Aircraft 1111, Inc.
Address: c/o The Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
Principal Place of Business/Chief Executive Office/Location of Goods
(other than Aircraft or Engines):
9420 S.W. 77th Avenue
Miami, Florida 33156
Merged or Consolidated Entities (or Entities Contributing or
Transferring Collateral):
None.
Registration of Aircraft:
Not Applicable.
Trade Names:
None.
II First Security Bank, National Association, as Trustee
Address: 79 South Main Street
Salt Lake City, Utah 84111
Principal Place of Business/Chief Executive Office/Location of Goods
(other than Aircraft or Engines):
Address: 79 South Main Street
Salt Lake City, Utah 84111
Merged or Consolidated Entities (or Entities Contributing or
Transferring Collateral):
None.
Registration of Aircraft:
Not Applicable.
Schedule - 1
<PAGE> 319
Trade Names:
None.
III Cauff, Lippman Aviation, Inc.
Address: 9420 W. 77th Avenue
Miami, Florida 33156
Principal Place of Business/Chief Executive Office:
9420 W. 77th Avenue
Miami, Florida 33156
Location of Goods (other than Aircraft or Engines):
Not Applicable.
Merged or Consolidated Entities (or Entities Contributing or
Transferring Collateral):
None.
Registration of Aircraft:
Not Applicable.
Trade Names:
None.
Schedule - 2
<PAGE> 320
Schedule 6.7
Transfer Restrictions to Sale or Assignment of Financed Aircraft and Engines
1. Transfer will be subject to the Applicable Carrier's right
of quiet enjoyment described in Section 3.4 hereof.
2. Such transfer shall not violate, and shall be in accordance
with, any applicable laws.
3. Transferee may be required to be an institutional investor
and/or have a specified minimum net worth or have its obligations
guaranteed by a Person with a specified minimum net worth.
4. Transfers to competitors or other restricted persons may be
prohibited.
5. Transferee may be required to make certain covenants and
representations and provide counsel opinions.
6. Transfers may be limited as to aggregate number of persons
who may hold interests in the Financed Aircraft and Engines.
7. Transfers may be limited to persons organized, domiciled or
resident in certain jurisdictions or so as otherwise to prevent or
limit taxes.
8. Transferee may be required to pay all fees, costs and taxes
related to the transfer.
9. Transferee may be required to make certain filings and
recordations.
10. Transferee may be required to provide certain indemnities
in connection with the transfer.
The foregoing notwithstanding, the restrictions in items 3 through 10
shall only apply to a transfer of an Aircraft or Engine, or an interest in the
owner of an Aircraft or Engine, to the extent (a) such Aircraft or Engine is
subject to an Eligible Lease, (b) such Eligible Lease contains such
restrictions, and (c) such Eligible Lease has not been terminated.
Schedule - 3
<PAGE> 321
Schedule 6.8
Tax Matters
None.
Schedule - 4
<PAGE> 322
Schedule 6.10
Litigation
None.
Schedule - 5
<PAGE> 323
Schedule 7.2
Maintenance
Each Borrower shall maintain, or cause to be maintained, each Financed
Aircraft or Engine in accordance with the standards set forth in the Security
Agreement.
Schedule - 6
<PAGE> 324
Schedule 7.21(a)
Maintenance, Return, Alteration, Replacement, Pooling and Lease
Any lease or Carrier Loan Documents with respect to any Financed
Aircraft or Engine shall require the Applicable Carrier to meet standards with
respect to the maintenance and alteration of such Financed Aircraft or Engine,
and with respect to the replacement of parts and pooling of parts and engines,
which standards in each case meet the requirements of the Security Agreement and
are at least as restrictive as the obligations of the Applicable Borrower with
respect to such Aircraft or Engine under the Security Agreement.
Any lease with respect to any Financed Aircraft or Engine shall also
require that such Financed Aircraft or Engine be returned to the Applicable
Borrower (i) in compliance with the maintenance requirements set forth in the
Security Agreement, and (ii) in the case of an Aircraft, in such condition as to
enable an airworthiness certificate to be obtained from the FAA or (in the case
of Aircraft not registered in the United States) any Applicable Foreign
Jurisdiction with respect to such Aircraft.
Any lease or Carrier Loan Documents with respect to any Financed
Aircraft or Engine shall also contain restrictions on the leasing, subleasing
and chartering of such Financed Aircraft or Engine that are at least as
restrictive as the terms of Section 8.17(b).
Schedule - 7
<PAGE> 325
Schedule 7.22
Re-registration
Any lease or Carrier Loan Documents with respect to any Financed
Aircraft or Engine shall contain covenants and restrictions regarding
re-registration of such Aircraft or Engine that meet the standards of the
Security Agreement, and are at least as restrictive as the obligations of the
Applicable Borrower under the Security Agreement.
Schedule - 8
<PAGE> 1
Exhibit 4.05
EXECUTION COPY
CREDIT AGREEMENT
by and among
FIRST SECURITY BANK, NATIONAL ASSOCIATION
not in its individual capacity
except as expressly stated herein,
but solely as Trustee,
as Initial Borrower
and
THE OTHER BORROWERS PARTY HERETO FROM TIME TO TIME,
as Borrowers,
LEHMAN COMMERCIAL PAPER INC.
as Lender
and
LEHMAN COMMERCIAL PAPER INC.
as Agent
and
THE OTHER LENDERS PARTY HERETO FROM TIME TO TIME
October 6, 1998
<PAGE> 2
1
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 6, 1998 (the
"Agreement"), is made by and among FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association not in its individual capacity (except as expressly
provided herein) but solely as trustee on behalf of that certain trust created
under the Trust Agreement (22222) dated as of September 28, 1998 between First
Security Bank, National Association and Aircraft 22222, Inc., a Delaware
corporation (together with any successor Qualified Trustee, the "Initial
Borrower"), certain UniCapital Subsidiary Trusts and UniCapital Special Purpose
Corporations (as defined below) designated as Borrowing Affiliates hereunder
(the Initial Borrower and such UniCapital Subsidiary Trusts and UniCapital
Special Purpose Corporations being referred to individually as a "Borrower" or
collectively as the "Borrowers"), LEHMAN COMMERCIAL PAPER INC., a New York
corporation in its capacity as a Lender ("Lehman"), and each other financial
institution executing and delivering a signature page hereto and each other
financial institution which may hereafter execute and deliver an instrument of
assignment with respect to this Agreement pursuant to Section 11.1 (such
financial institutions hereinafter being referred to individually as a "Lender"
or collectively as the "Lenders"), and LEHMAN COMMERCIAL PAPER INC. in its
capacity as agent for the Lenders (in such capacity, and together with any
successor agent appointed in accordance with the terms of Section 10.7, the
"Agent");
W I T N E S S E T H:
WHEREAS, the Borrowers have requested that the Lenders make
available to the Borrowers a revolving credit facility of up to $500,000,000,
the proceeds of which are to be used solely to provide interim financing for the
purchase or refinancing by the Borrowers of Eligible Aircraft; and
WHEREAS, the Lenders are willing to make such revolving credit
facility available to the Borrowers upon the terms and conditions set forth
herein;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent
hereby agree as follows:
ARTICLE I
Definitions and Terms
1.1 Definitions. For the purposes of this Agreement, in
addition to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the acquisition of any beneficial
interest, equity interest or other ownership interest in another Person
(including the purchase of an option, warrant or convertible or similar
type security to acquire such interest at the time it becomes
exercisable by the holder thereof), whether by purchase of such
interest or upon exercise of an option or warrant for, or conversion of
securities into, such interest.
<PAGE> 3
2
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with any Guarantor or any Borrower; or (ii) which
beneficially owns or holds 10% or more of any class of the outstanding
voting stock (or in the case of a Person which is not a corporation,
10% or more of the equity interest or beneficial interest) of any
Guarantor or any Borrower; or 10% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest or beneficial interest)
of which is beneficially owned or held by any Guarantor or any
Borrower; provided, however, at the time any Guarantor registers any
security issued by it pursuant to the Securities Act of 1933, as
amended, the figure "10%" used in this definition shall automatically
change to "5%" without further action. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
ownership of voting stock, by contract or otherwise.
"Aircraft" means any Stage III fixed wing airframe together
with the jet Engines therefor (whether or not) affixed thereto;
"Applicable Aircraft Advance Rate" with respect to any
Eligible Aircraft means:
(a) if the age of such Aircraft (measured from the
date of original manufacture to the date of the original Loan
made or to be made in respect of such Eligible Aircraft) is
less than or equal to 15 years, 70%;
(b) if the age of such Aircraft (measured from the
date of original manufacture to the date of the original Loan
made or to be made in respect of such Eligible Aircraft) is
less than or equal to 20 years and greater than 15 years, 60%;
or
(c) if the age of such Aircraft (measured from the
date of original manufacture to the date of the original Loan
made or to be made in respect of such Eligible Aircraft) is
greater than 20 years, 50%.
"Applicable Aircraft Borrowing Base" with respect to any
Eligible Aircraft means the lesser of the following amounts (subject to
such lesser amount being reduced pursuant to the Concentration
Restriction): (a) the sum of (x) the available amount for drawing under
any Eligible Credit Enhancement in effect with respect to the Eligible
Aircraft and (y) the product of (A) the Applicable Aircraft Advance
Rate for such Eligible Aircraft and (B) Fair Market Value of such
Eligible Aircraft, (b) 80% of the Fair Market Value of such Eligible
Aircraft and (c) the sum of (x) the amount available for drawing under
any Eligible Credit Enhancement in effect with respect to such Eligible
Aircraft and (y) 88% of the Purchase Price of such Eligible Aircraft.
"Applicable Borrower" means, with respect to any Financed
Aircraft, the Borrower that has requested or received a Loan to enable
such Borrower to purchase or refinance such Financed Aircraft.
<PAGE> 4
3
"Applicable Carrier" means, with respect to any Financed
Aircraft, the Eligible Carrier that has leased such Financed Aircraft
from the Applicable Borrower, or from the Applicable Intermediary in
accordance with Section 2.15.
"Applicable Carrier Borrowing Base" with respect to any
Eligible Carrier means the aggregate of the Applicable Aircraft
Borrowing Bases for all Financed Aircraft that are leased to such
Eligible Carrier.
"Applicable Commitment Percentage" means, with respect to each
Lender at any time, a fraction, the numerator of which shall be such
Lender's Revolving Credit Commitment and the denominator of which shall
be the Total Revolving Credit Commitment, which Applicable Commitment
Percentage for each Lender as of the Closing Date is as set forth in
Exhibit A; provided that the Applicable Commitment Percentage of each
Lender shall be increased or decreased to reflect any assignments to or
by such Lender effected in accordance with Section 11.1.
"Applicable Foreign Aviation Law" means, with respect to any
Aircraft, any applicable law (other than the FAA Act) of any country or
subdivision thereof, governing the registration, ownership, operation,
or leasing of all or any part of such Aircraft, or the creation,
recordation, maintenance, perfection or priority or Liens on all or any
part of such Aircraft.
"Applicable Foreign Jurisdiction" means, with respect to any
Aircraft, any jurisdiction that administers an Applicable Foreign
Aviation Law.
"Applicable Intermediary" means, with respect to any Financed
Aircraft, the Eligible Intermediary that has leased such Aircraft from
the Applicable Borrower, and has leased such Aircraft to the Applicable
Carrier, in each case in accordance with Section 2.15.
"Applicable Lease Cure Period" has the meaning assigned
thereto in Section 9.6.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" for such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrowers by written notice in accordance with the
terms hereof as the office by which its Loans are to be made and
maintained.
"Applicable Margin" means:
(a) with respect to the Eurodollar Rate, 1.75%,
provided that upon the consummation of a Permanent Capital
Markets Financing occurring after the Closing Date, the
Applicable Margin with respect to the Eurodollar Rate shall be
1.50%; and
<PAGE> 5
4
(b) with respect to the Base Rate, three-fourths of
one percent (.75%), provided that upon the consummation of a
Permanent Capital Markets Financing occurring after the
Closing Date, the Applicable Margin with respect to the Base
Rate shall be one-half of one percent (.50%).
"Appraisal Procedure" has the meaning given in Section 5.4.
"Asia Pacific Carrier" means, Eligible Carriers in the
following countries:
China, India, Indonesia, South Korea, Malaysia, Pakistan,
Philippines, Sri Lanka, Taiwan, Thailand, Australia, Hong
Kong, Japan, New Zealand and Singapore
"Assignment and Acceptance" means an Assignment and Acceptance
in the form of Exhibit B (with blanks appropriately filled in)
delivered to the Agent in connection with an assignment of a Lender's
interest under this Agreement pursuant to Section 11.1.
"Assumption Letter" means an Assumption Letter in
substantially the form of Exhibit R.
"Authorized Representative" means any of the President,
Executive Vice President, Senior Vice President or Vice President of
UniCapital, any Beneficial Owner or any UniCapital Special Purpose
Subsidiary, in each case as authorized representative for each of the
Borrowers, or any other Person expressly designated by the Board of
Directors of each of the Borrowers (or the appropriate committee
thereof) as an Authorized Representative of each of the Borrowers as
set forth from time to time in a certificate in the form of Exhibit C.
"Base Rate" means, for any day, the rate per annum equal to
the sum of (a) the higher of (i) the Federal Funds Rate for such day
plus one-half of one percent (0.5%) and (ii) the Prime Rate for such
day, plus (b) the Applicable 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 Loan" means a Loan for which the rate of interest
is determined by reference to the Base Rate.
"Beneficial Owner" means, with respect to any UniCapital
Subsidiary Trust, any Person holding a beneficial interest in such
UniCapital Subsidiary Trust.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Boeing 737 Model" means a Boeing Aircraft that is any of the
following models: 737-300, 737-400, 737-600, 737-700,
737-800 or 737-900.
<PAGE> 6
5
"Borrowing Affiliate" means any UniCapital Subsidiary Trust or
UniCapital Special Purpose Corporation that is designated as a
Borrowing Affiliate hereunder pursuant to Section 2.13 hereof.
"Borrowing Base" means, as of any date of determination, the
aggregate of the Applicable Aircraft Borrowing Bases for all Eligible
Aircraft; provided, that (except in the limited circumstances described
in the provisos to the definition of "Concentration Restriction") at no
time shall the Borrowing Base include any Applicable Aircraft Borrowing
Base to the extent that any Concentration Restriction would be exceeded
or violated thereby. However, (x) if Lease Events of Default exist
under Eligible Leases of Aircraft with respect to which the aggregate
attributable Borrowing Base equals or exceeds the lesser of (A) 10% of
the then outstanding principal balance of the Loans (provided such
Lease Events of Default exist with respect to more than one Aircraft)
or (B) $50,000,000, the Borrowing Base shall be deemed reduced by such
excess and (y) if a Lease Event of Default relating to non-payment of
sums payable by a lessee exists under a Lease and remains uncured for a
period of 150 days, then the Borrowing Base shall be deemed reduced by
the Borrowing Base attributable to such Lease. Also, within a
reasonable time after a Permanent Capital Markets Financing is closed,
the Agent shall be entitled to adjust the Borrowing Base (1) in an
amount which is reasonable in its judgment in light of prevailing
securitization standards to reflect Leases of Aircraft in respect of
which Loans remain outstanding immediately after such Permanent Capital
Markets Financing which are no longer Eligible Leases or which are
subject to a Lease Event of Default and (2) in an amount so that the
Weighted Average Lease Factor of all Leases of remaining Financed
Aircraft (excluding the Sabena Portfolio so long as the Weighted
Average Lease Factor of the remaining Financed Aircraft, if any, in the
Sabena Portfolio is at least 1.00 to 100) is at least 1.05 to 100.
Finally, if, at the time of the financing of an Eligible Aircraft
hereunder, the financial condition or principal location of the
Applicable Carrier is such that, based on an affirmative statement by
Moody's or S&P (whether or not in writing), such Financed Aircraft (and
Eligible Lease) is not securitizable under prevailing market standards
or will not generate net proceeds in such securitization attributable
to such Financed Aircraft that will be sufficient to repay the Loan
made with respect to such Financed Aircraft, the Agent shall be
entitled to adjust the Applicable Aircraft Borrowing Base in a amount
deemed reasonable by it in order to compensate for such factors in
determining the amount of the Loan to be advanced hereunder with
respect to any Financed Aircraft; provided, that no reduction in the
Borrowing Base shall be made pursuant to this sentence with respect to
Financed Aircraft representing up to $50,000,000 of aggregate
outstanding principal amount of Loans that would otherwise give rise to
a reduction in the Borrowing Base pursuant to the foregoing provisions
of this sentence; and provided, further, that no reduction of the
Borrowing Base shall be made pursuant to this sentence with respect to
any Aircraft unless an Authorized Representative receives notice from
the Agent of the relevant affirmative statement of Moody's or S&P prior
to the later of (i) three Business Days after notice to the Agent that
an Applicable Borrower intends to purchase the Aircraft in question or
(ii) the date that an Applicable Borrower is irrevocably contractually
bound to purchase such Aircraft.
<PAGE> 7
6
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with a Loan under the Revolving Credit
Facility, in the form of Exhibit D.
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
State of New York are authorized or obligated by law, executive order
or governmental decree to be closed and, (ii) with respect to any
Eurodollar Rate Loan, any day which is a Business Day, as described
above, and on which the relevant international financial markets are
open for the transaction of business contemplated by this Agreement in
London, England and New York, New York.
"Capital Expenditures" means, with respect to the Borrowers
and their respective Subsidiaries, for any period the sum of (without
duplication) (i) all expenditures (whether paid in cash or accrued as
liabilities) by any Borrower 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 any Borrowers and
its respective 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 7.1(a) or
(b), and (ii) with respect to any Capital Lease entered into by any
Borrower 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 7.1(a)), all the foregoing in accordance with GAAP applied
on a Consistent Basis.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Cauff Lippman" means Cauff, Lippman Aviation, Inc., a Florida
corporation that is a direct or indirect, wholly-owned subsidiary of
UniCapital.
"Change of Control" means, at any time, 100% of the beneficial
ownership of any Guarantor or any Borrower or any Eligible Intermediary
is not owned, directly or indirectly, by UniCapital.
"CLA" means CLA Holdings, Inc., a Delaware corporation that is
a direct, wholly-owned subsidiary of UniCapital.
"Closing Date" means the date as of which this Agreement is
executed by the Borrowers, the Lenders and the Agent and on which the
conditions set forth in Section 5.1 have been satisfied.
<PAGE> 8
7
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Collateral" means, collectively, all property of any
Borrower, any Subsidiary, any Eligible Intermediary or any other Person
in which the Agent or any Lender is granted a Lien as security for all
or any portion of the Obligations under any Security Instrument.
"Collection Account" has the meaning given in the Lockbox
Agreement.
"Collection Bank" means a bank, trust company or other Person,
satisfactory to the Agent, that executes the Lockbox Agreement in the
capacity of "Collection Bank" thereunder.
"Concentration Restriction" means any of the following
restrictions on the Eligible Aircraft included in the Borrowing Base:
(a) the Applicable Carrier Borrowing Base for any
Eligible Carrier the senior unsecured debt (without credit
enhancement) of which is rated BBB or better by S&P and Baa2
or better by Moody's shall not at any time exceed 15% of the
Total Revolving Credit Commitment (provided, that this
restriction shall not apply to reduce the Borrowing Base of
any Aircraft included in the Sabena Portfolio);
(b) the Applicable Carrier Borrowing Base for any
Eligible Carrier the senior unsecured debt (without credit
enhancement) of which is not rated BBB or better by S&P and
Baa2 or better by Moody's shall not at any time exceed 10% of
the Total Revolving Credit Commitment (provided, that this
restriction shall not apply to reduce the Borrowing Base of
any Aircraft included in the Sabena Portfolio);
(c) the aggregate of the Applicable Carrier Borrowing
Bases for the five Eligible Carriers with the highest
Applicable Carrier Borrowing Bases shall not at any time
exceed 35% of the Total Revolving Credit Commitment;
(d) the aggregate of the Applicable Carrier Borrowing
Bases for all Asia Pacific Carriers shall not at any time
exceed 45% of the Total Revolving Credit Commitment;
(e) the aggregate of the Applicable Carrier
Borrowing Bases for all U.S. Carriers shall not at any time
exceed 40% of the Total Revolving Credit Commitment;
(f) the aggregate of the Applicable Carrier Borrowing
Bases for all U.S. Carriers the senior unsecured debt (without
credit enhancement) of which is
<PAGE> 9
8
not rated B or better by S&P and B2 or better by Moody's shall
not at any time exceed 25% of the Total Revolving Credit
Commitment;
(g) the aggregate of the Applicable Carrier Borrowing
Bases for all Eligible Carriers headquartered in countries the
sovereign unsecured debt (without credit enhancement) of which
is rated BBB or better by S&P and Baa2 or better by Moody's
shall not at any time exceed 20% of the Total Revolving Credit
Commitment;
(h) the aggregate of the Applicable Carrier Borrowing
Bases for all Eligible Carriers headquartered in countries the
sovereign unsecured debt (without credit enhancement) of which
is not rated BBB or better by S&P and Baa2 or better by
Moody's shall not at any time exceed 15% of the Total
Revolving Credit Commitment;
(i) the aggregate of the Applicable Carrier Borrowing
Bases for all Developed Market Carriers shall not at any time
exceed 70% of the Total Revolving Credit Commitment;
(j) the aggregate of the Applicable Carrier Borrowing
Bases for all Developed Market Carriers in any Developed
Market Region the senior unsecured debt (without credit
enhancement) of which is not rated B or better by S&P and B2
or better by Moody's shall not at any time exceed 50% of the
Total Revolving Credit Commitment;
(k) the aggregate of the Applicable Carrier Borrowing
Bases for all Emerging Market Carriers shall not at any time
exceed 20% of the Total Revolving Credit Commitment;
(l) the aggregate of the Applicable Carrier Borrowing
Bases for all Other Market Carriers shall not at any time
exceed 20% of the Total Revolving Credit Commitment; and
(m) the aggregate of the Applicable Carrier Borrowing
Bases for Financed Aircraft that are subject to Eligible
Leases having lease terms that are scheduled to expire or
which may be cancelled by the Applicable Carrier (unless the
Applicable Carrier is required, as a condition to cancelling
such Lease, to pay the Applicable Borrower under such Lease an
amount at least equal to all outstanding principal and accrued
interest on the Loan relating to such Financed Aircraft)
within one year after the date of the Loan made hereunder with
respect to such Aircraft shall not at any time exceed 10% of
the Total Revolving Credit Commitment;
provided, that (i) with respect to any Eligible Aircraft that
a Borrower wishes to finance or refinance through the proceeds of a
Loan hereunder, if the inclusion of the Applicable Aircraft Borrowing
Base of such Aircraft would cause one or more
<PAGE> 10
9
Concentration Restrictions to be exceeded, then such Borrower may deem
such Applicable Aircraft Borrowing Base to be reduced to the highest
amount that would not exceed or violate any Concentration Restriction,
so long as the Loan hereunder with respect to such Aircraft shall not
exceed an amount determined based on such reduced Applicable Aircraft
Borrower Base and all other conditions to such Loan are satisfied, and
(ii) at the request of a Borrower, the Agent agrees to review in good
faith the 20% limit set forth in clause (k) above in light of
prevailing market standards for securitization transactions at the time
and, if consistent with such standards, to increase such percentage to
not more than 25%.
"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 pro forma combined financial statements of UniCapital, Cauff
Lippman and certain affiliates thereof, NSJ and the other Founding
Companies for the year ended December 31, 1997, which financial
statements are contained in the UniCapital Registration Statement.
"Consolidated EBITDA" means, with respect to the Borrowers and
their respective Subsidiaries for any Quarterly 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 of long-term Indebtedness, and (v)
depreciation, all determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis.
"Consolidated EBITDA-to-Interest Ratio" means, with respect to
the Borrowers and their respective Subsidiaries for any Quarterly
Period ending on the date of computation thereof, the ratio of (i)
Consolidated EBITDA for such Borrowers and their respective
Subsidiaries for such period, to (ii) Consolidated Interest Expense for
such Borrowers and their respective Subsidiaries for such period.
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrowers and their respective 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 Swap
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, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis.
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrowers and their
respective Subsidiaries (including payments received by the Borrowers
and their respective 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 this
Agreement and not related to an extraordinary event), less all
operating and non-operating expenses of
<PAGE> 11
10
the Borrowers and their respective Subsidiaries including taxes on
income, all determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis; but excluding 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 any Borrower 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.
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring thereof,
would be required) to be included in the financial statements
(including footnotes) of such Person in accordance with GAAP applied on
a Consistent Basis, including Statement No. 5 of the Financial
Accounting Standards Board, all Rate Hedging Obligations and any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including obligations of such Person however incurred:
(1) to purchase such Indebtedness or other
obligation or any property or assets constituting security
therefor;
(2) to advance or supply funds in any manner (i) for
the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working capital, net
worth or other balance sheet condition or any income statement
condition of the primary obligor;
(3) to grant or convey any lien, security interest,
pledge, charge or other encumbrance on any property or assets
of such Person to secure payment of such Indebtedness or other
obligation;
(4) to lease property or to purchase securities or
other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(5) otherwise to assure the owner of the Indebtedness
or such obligation of the primary obligor against loss in
respect thereof.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.8 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 2.8 or Article IV of one Type of Loan
into another Type of Loan.
<PAGE> 12
11
"Credit Party" means, collectively, each Borrower, each
Eligible Intermediary, each Guarantor, and each other Person (if any)
providing Collateral pursuant to any Security Instrument. UniCapital
shall be deemed not to be a Credit Party.
"Custodian" means, initially, Lehman, in its capacity as
custodian under the Custodian Agreement and any successor custodian
under a Custodian Agreement.
"Custodian Agreement" means the Custodian Agreement of even
date herewith between the Lender, the Custodian and the Initial
Borrower and any replacement Custodian Agreement to which the Agent may
become a party with respect to the transactions contemplated herein.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder, provided that if, pursuant to Section 9.6,
such event or condition is not deemed to be a breach of the Credit
Parties' obligations under this Agreement and the other Loan Documents
and each of the conditions set forth in Section 9.6 is satisfied, then
during the Applicable Lease Cure Period referred to in Section 9.6(d),
such event or condition shall not be deemed to be a "Default" except
for the purposes of Section 7.1(c), Section 7.11, the first two
sentences of Section 10.4, Section 2 of the Compliance Certificate in
the form of Exhibit H, and Section 4 of the Borrowing Base Certificate
in the form of Exhibit S; and provided further that if the requirements
of Section 9.6(d) are not satisfied within such Applicable Lease Cure
Period, then an "Event of Default" shall be deemed to have occurred on
the day after the last day of such period.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Base Rate Loans,
at a rate of interest per annum which shall be two percent (2%) above
the Base Rate and (iii) in any case, the maximum rate permitted by
applicable law, if lower.
"Developed Market Carriers" means, Eligible Carriers in the
following markets (each of Europe, North America and the Pacific
regional groupings being referred to as a "Developed Market Region"):
<TABLE>
<CAPTION>
<S> <C>
Europe: European Union (except Greece and
Luxembourg), Norway and
Switzerland
North America: Canada and the United States
Pacific: Australia, Hong Kong, Japan, New
Zealand and Singapore
</TABLE>
<PAGE> 13
12
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Eligible Aircraft" means any Aircraft which satisfies each
of the following requirements:
(a) such Aircraft is a Stage III aircraft and is one
of the models listed on Exhibit L attached hereto;
(b) such Aircraft is or was manufactured in 1980 or
later, except that if such Aircraft is a McDonnell Douglas
DC10-30, it is or was manufactured in 1973 or later;
(c) such Aircraft is (i) owned by the Applicable
Borrower and is subject to an Eligible Lease between such
Applicable Borrower (as lessor) and an Eligible Carrier (as
lessee), or (ii) is owned by the Applicable Borrower, is
subject to an Eligible Lease between such Applicable Borrower
(as lessor) and the Applicable Intermediary (as lessee), and
is subject to an Eligible Lease between such Applicable
Intermediary (as lessor) and an Eligible Carrier as (lessee);
(d) such Aircraft is covered by all of the insurance
described on Exhibit M attached hereto, and the Agent (for
itself and on behalf of the Lenders) is named as loss payee
and is named as an additional insured on such insurance;
(e) neither the Applicable Carrier nor the Applicable
Intermediary (if any) is organized under the laws of, or
domiciled in, any Prohibited Country;
(f) the Agent (for itself and on behalf of the
Lenders) has a duly perfected, first priority Lien and
security interest (subject only to Permitted Liens) on such
Aircraft under (i) the FAA Act (in the case of an Aircraft
registered in the United States) or (ii) all Applicable
Foreign Aviation Laws (in the case of an Aircraft registered
outside the United States); provided, however, that to the
extent that a duly perfected, first priority Lien and security
interest on such Aircraft is not possible, or is impractical
(commercially or otherwise), then with the Agent's consent
(which consent shall not be unreasonably withheld), the
Security Agreement with respect to such Aircraft shall not be
required or shall be modified to provide such Lien, such
priority and such perfection, if any, as shall not be
impossible or impractical (commercially or otherwise);
(g) the Agent has received opinions of FAA Counsel
(if such Aircraft is registered in the United States) or
counsel in the Applicable Foreign Jurisdiction (if such
Aircraft is registered outside the United States), which
counsel is reasonably acceptable to the Agent, and which
opinions are addressed to the Agent (on behalf of itself and
the Lenders) opining as to the creation, perfection and
priority of the Agent's mortgage Lien and security interest on
such Aircraft, substantially in the form of Exhibit G-2 or the
substance of Exhibit G-3
<PAGE> 14
13
(as applicable) in form and substance reasonably satisfactory
to the Agent or otherwise in form and substance reasonably
acceptable to the Agent; and (in the case of Aircraft
registered in the United States) within a reasonable period
after the registration of the Agent's Lien, the Agent has
received an opinion of FAA counsel substantially in the form
of Exhibit G-4 (provided, however, if the proviso to clause
(f) above is applicable, then the form of such opinion shall
be appropriately changed); and
(h) the Agent has received three (3) Qualified
Appraisals of the Fair Market Value of such Aircraft, each
such appraisal prepared by a separate Qualified Appraiser and
dated as of a date reasonably close to the date of the Loan
hereunder with respect to such Aircraft; and based on the
Appraisal Procedure, the Agent, in accordance with the
Appraisal Procedure, has calculated the initial Fair Market
Value of such Aircraft.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
Lender, and (iii) any other financial institution approved by the
Agent; provided, however, that neither any Borrower nor an affiliate of
any Borrower shall qualify as an Eligible Assignee.
"Eligible Carrier" means any air carrier duly licensed to
carry passengers or cargo under applicable law, foreign or domestic.
"Eligible Credit Enhancement" with respect to any Eligible
Aircraft means credit enhancement in the form of a letter of credit or
surety bond which satisfies each of the following requirements:
(a) such letter of credit or surety bond is issued by
a Person other than a Borrower or Eligible Carrier, and the
senior unsecured debt (without credit enhancement) of such
Person is rated at A or better by S&P and A2 or better by
Moody's and such person is otherwise reasonably satisfactory
to the Agent;
(b) such credit enhancement secures (on terms and
conditions reasonably satisfactory to the Agent) payment of
all Loans hereunder, and the Agent (in its discretion) is
entitled to directly enforce such credit enhancement and may
obtain payment of principal and interest of any such Loan
through such credit enhancement without being required first
(or at any time) to foreclose on any other Collateral or
enforce any Guaranty; and
(c) pursuant to the terms of the letter of credit or
surety bond, it may be drawn by the Agent 30 days prior to the
date it would otherwise expire if it has not been extended on
or prior to that date.
"Eligible Intermediary" means, with respect to any Financed
Aircraft, a corporation that is a direct, wholly-owned subsidiary of
the Applicable Borrower.
<PAGE> 15
14
"Eligible Lease" means a fully-executed Lease by a Borrower
(as lessor) to an Eligible Carrier (as lessee) of an Eligible Aircraft,
which Lease satisfies each of the following requirements:
(a) such Lease provides for annual basic rent
payments during its term to such Borrower in Dollars in an
annual amount sufficient to provide such Borrower with funds
adequate to pay (i) all interest when due on all Loans
hereunder relating to the respective Aircraft (determined
based on a notional interest rate equal to the prevailing
Eurodollar Rate on the date of funding the Loan with respect
to such Aircraft), plus (ii) all fees payable under the
Servicing Agreement with respect to such Lease or Aircraft,
plus (iii) amortization of the Loan with respect to such
Aircraft at a rate equal to 4.0% of the initial Fair Market
Value of such Aircraft per year;
(b) such Lease is a "triple net lease" (subject to
any arrangement whereby the Borrower and the Eligible Carrier
agree to share certain expenses relating to aircraft or engine
directives, service bulletins or similar items) and requires
the lessee to maintain the insurance described in Exhibit M
attached hereto with respect to such Aircraft, and to bear all
risk of loss, damage or liability with respect to such
Aircraft;
(c) not more than twelve (12) years of the Lease term
is remaining under such Lease at the time of any Loan
hereunder relating to such Aircraft;
(d) the lessor is entitled to the benefits of Section
1110 of the U.S. Bankruptcy Code (or other applicable
bankruptcy or insolvency law reasonably acceptable to the
Agent) with respect to the lessor's rights against the lessee,
including without limitation the rights to require performance
of the lessee's obligations under the Lease or return of such
Aircraft during the lessee's bankruptcy or insolvency;
(e) such Lease requires the lessee to comply with
covenants and restrictions regarding the maintenance, return,
alteration, replacement, pooling and sublease of such
Aircraft, which covenants and restrictions satisfy the
requirements of Section 7.21(a) and Schedule 7.21(a) hereto;
(f) if such Lease contains a purchase option, the
expected exercise price is equal to or greater than the
expected outstanding principal and accrued interest on all
Loans relating to such Aircraft as of the date of exercise of
such option;
(g) such Lease prohibits the lessee from flying or
locating such Aircraft in any country in violation of the
applicable laws of any jurisdiction;
<PAGE> 16
15
(h) such Lease contains customary covenants and
restrictions relating to re-registration of such Aircraft;
which covenants and restrictions satisfy the requirements of
the Security Agreement;
(i) at the time of any Loan hereunder relating to
such Aircraft, no prepayment shall have been made under such
Lease, and no Lease payment obligation shall have been
accelerated, provided that it is understood that a scheduled
rental payment to be paid in advance for a rental period in
accordance with the Lease terms is not deemed to be a
prepayment;
(j) at the time of any Loan relating to such
Aircraft, the Agent shall have received a Lessee Estoppel
Certificate executed by such lessee with respect to such
Lease, or other evidence reasonably satisfactory to the Agent
that such Lease is valid and binding;
(k) either (i) such Lease is a "true lease" lease
(and not a lease intended as security) under applicable
commercial law and other applicable law relating to creditors'
rights and bankruptcy; or (ii) such Lease grants to such
Borrower, and such Borrower has at all times under the FAA Act
(in the case of Aircraft registered in the United States) or
Applicable Foreign Aviation Laws (in the case of all other
Aircraft), a perfected first priority mortgage Lien on such
Aircraft (subject only to Permitted Liens), which Lien has
been assigned to the Agent; and
(l) such Lease does not contain, or omit to include,
any provisions that violate any affirmative statement or
policy (whether or not in writing) of Moody's or S&P, in
existence on or prior to the date that the Applicable Borrower
has agreed to acquire the applicable Aircraft, that would
preclude such Lease from (x) being included in any Permanent
Capital Markets Financing or (y) generating net proceeds in
such Permanent Capital Markets Financing attributable to such
Financed Aircraft sufficient to repay the Loan made with
respect to such Financed Aircraft;
provided, however, that in the circumstances described in Section 2.15,
"Eligible Lease" means, individually and collectively, (X) a
fully-executed Lease by a Borrower (as lessor) to the Applicable
Intermediary (as lessee) of an Eligible Aircraft, which Lease satisfies
each of the requirements for an "Eligible Lease" set forth in clauses
(a) through (l) above except that the lessee is not an Eligible
Carrier, and (Y) a fully-executed sublease by such Applicable
Intermediary (as sublessor) to an Eligible Carrier (as sublessee) of
such Financed Aircraft, which Eligible Carrier is not a U.S. Carrier,
and which Lease is identical in all respects (other than the Persons
that are lessor and lessee) to the Lease described in clause (X) above,
and which Lease satisfies all the requirements for an "Eligible Lease"
set forth in clauses (a) through (k) above, except that the lessor is
not a Borrower.
"Emerging Market Carriers" means, Eligible Carriers in the
following markets:
<PAGE> 17
16
<TABLE>
<CAPTION>
<S> <C>
Asia: China, India, Indonesia, South Korea,
Malaysia, Pakistan, Philippines, Sri Lanka,
Taiwan and Thailand
Europe and Middle East: Czech Republic, Greece, Hungary, Israel,
Jordan, Poland and Turkey
Latin America: Argentina, Brazil, Chile, Columbia, Mexico,
Peru and Venezuela
</TABLE>
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of any Guarantor or any Borrower or any of their respective
ERISA Affiliates or is assumed by any Guarantor or any Borrower or any
of their respective ERISA Affiliates in connection with any Acquisition
or (ii) has at any time been maintained for the employees of any
Guarantor or any Borrower or any current or former ERISA Affiliate.
"Engine" means any aircraft jet engine.
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree, permit
or license regulating, relating to, or imposing liability or standards
of conduct concerning, any environmental matters or conditions,
environmental protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization
Act of 1986, as amended; the Resource Conservation and Recovery Act, as
amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all
regulations promulgated thereunder, and any other "Superfund" or
"Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Guarantor or any
Borrower, means any Person or trade or business which is a member of a
group which is under common control with such Guarantor or Borrower,
who together with such Guarantor or Borrower, is treated as a single
employer within the meaning of Section 414(b) and (c) of the Code.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
<TABLE>
<CAPTION>
<S> <C> <C>
Eurodollar = Interbank Offered Rate + Applicable
Rate ----------------------- Margin
1- Reserve Requirement
</TABLE>
<PAGE> 18
17
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate.
"Event of Default" means any of the occurrences set forth as
such in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"FAA" means the United States Federal Aviation Administration.
"FAA Act" means 49 U.S.C. Subtitle VII, Sections 40101 et
seq., as amended from time to time, any regulations promulgated
thereunder and any successor provision.
"FAA Counsel" means DeBee & Gilchrist, Daugherty, Fowler and
Peregrin, Crowe & Dunlevy, or any other law firm having nationally
recognized expertise in FAA matters acceptable to the Agent.
"FAA Recording Office" means the office of the FAA in Oklahoma
City, Oklahoma, maintained as the office for the recordation of Liens
on Aircraft and pursuant to the FAA Act, and any successor or
additional office performing the same or a comparable function.
"Facility Guaranty" means each Guaranty Agreement between one
or more Guarantors and the Agent for the benefit of the Lenders
(substantially in the form of Exhibit I attached hereto), delivered as
of the Closing Date and otherwise pursuant to Section 2.13, 5.2 or 5.3,
as the same may be amended, modified or supplemented from time to time.
"Facility Termination Date" means such date as all of the
following shall have occurred: (a) the Borrowers shall have permanently
terminated the Revolving Credit Facility by payment in full of all
Revolving Credit Outstandings, together with all accrued and unpaid
interest thereon, (b) all Revolving Credit Commitments shall have
terminated or expired and (c) the Borrowers shall have fully, finally
and irrevocably paid and satisfied in full all Obligations (other than
Obligations consisting of continuing indemnities and other contingent
Obligations of any Borrower or any Guarantor that may be owing to the
Lenders pursuant to the Loan Documents and expressly survive
termination of this Agreement).
"Fair Market Value" or "FMV" with respect to any Aircraft
means the current fair market value (as opposed to so-called "base
value") ascribed thereto by the respective Qualified Appraiser in a
Qualified Appraisal; provided that (x) for the purpose of determining
the Fair Market Value of such Aircraft at the time of any Loan with
respect thereto, such Fair Market Value shall be determined using an
Appraisal Procedure and (y) if such Qualified Appraisal is dated more
than six (6) months prior to the applicable date of determination of
Fair Market Value, then Fair Market Value shall be deemed to be zero
($0).
<PAGE> 19
18
"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.
"Fee Letter" means the Fee Letter dated the date hereof by
Lehman Brothers Inc. accepted and agreed to by UniCapital.
"Financed Aircraft" with respect to any Loan means,
collectively, each Aircraft, or part thereof, the acquisition of which
was or is to be financed or refinanced in whole or in part by such
Loan. There shall only be one Loan by each Lender for each Financed
Aircraft under this Agreement.
"Fiscal Year" means the twelve month fiscal period of
UniCapital, the Borrowers and their Subsidiaries commencing on January
1 of each calendar year and ending on December 31 of each calendar
year.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the American Institute of Certified Public Accountants
or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guaranties" means the Facility Guaranties and all other
obligations of any Borrower or any other Person directly or indirectly
guaranteeing, or in effect guaranteeing, any Indebtedness or other
obligation of any other Person.
<PAGE> 20
19
"Guarantors" means, at any date, the Beneficial Owners,
Eligible Intermediaries and Subsidiaries who are required to be parties
to a Facility Guaranty at such date.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law.
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property or arising under Rate
Hedging Obligations, all indebtedness secured by any Lien on the
property of such Person whether or not such indebtedness is assumed,
all liability of such Person by way of endorsements (other than for
collection or deposit in the ordinary course of business), all
Contingent Obligations, and other items which in accordance with GAAP
is required to be classified as a liability on a balance sheet; but
excluding all accounts payable in the ordinary course of business so
long as payment therefor is due within one year; provided that in no
event shall the term Indebtedness include surplus and retained
earnings, lease obligations (other than pursuant to Capital Leases),
reserves for deferred income taxes and investment credits, other
deferred credits or reserves or deferred compensation obligations.
"Indebtedness for Money Borrowed" means with respect to any
Person, without duplication, all indebtedness in respect of money
borrowed, as reflected on the balance sheet of such Person in
accordance with GAAP, including without limitation all Capital Leases
and the deferred purchase price of any property or asset, evidenced by
a promissory note, bond, debenture or similar written obligation for
the payment of money (including conditional sales or similar title
retention agreements), other than trade payables incurred in the
ordinary course of business.
"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan 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 (or, if
no such comparable term is quoted, an interpolated rate as reasonably
determined by the Agent). If for any reason such rate is not available,
the term "Interbank Offered Rate" shall mean, with respect to any
Eurodollar Rate Loan 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 (rounded upwards, if necessary, to the nearest 1/100 of 1%).
<PAGE> 21
20
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
Converted or on the last day of the preceding Interest Period, as the
case may be, and ending on (x) the next occurring day that is the
fifteenth day of a calendar month or (y) in the case of an Interest
Period of one week, the last day of such week (provided, that Interest
Periods of one week in duration may not be selected by a Borrower other
than in anticipation of a prepayment of a Loan); provided, that,
(a) if an Interest Period for a Eurodollar Rate Loan
would end on a day which is not a Business Day, such Interest
Period shall be extended to the next Business Day (unless such
extension would cause the applicable Interest Period to end in
the succeeding calendar month, in which case such Interest
Period shall end on the next preceding Business Day);
(b) except in the case of a one-week Interest Period,
any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a
calendar month;
(c) no Interest Period shall extend past the Stated
Termination Date for Revolving Loans; and
(d) there shall not be more than six (6) Interest
Periods in effect on any day.
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or the Conversion of any Base Rate Loan into a Eurodollar Rate Loan, in
the form of Exhibit E.
"Lease" shall have the meaning given in the Security
Agreement.
"Lease Event of Default" means any event characterized as an
"event of default" (or the equivalent) under any Lease of any Aircraft
(or that would be so characterized assuming the sending of any required
notice by the lessor in a timely manner).
"Lehman" means Lehman Commercial Paper Inc.
"Lessee Estoppel Certificate" means a certificate in form and
substance reasonably acceptable to the Agent, duly completed and
executed by an Applicable Carrier with respect to an Aircraft; and the
Agent agrees that the form of Lessee Estoppel Certificate attached
hereto as Exhibit N is acceptable.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security
<PAGE> 22
21
interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. For the purposes of this Agreement, any
Borrower and any Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale
agreement, financing lease, or other arrangement pursuant to which
title to the property has been retained by or vested in some other
Person for security purposes.
"Loan" or "Loans" means any of the Revolving Loans.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Facility Guaranties, the UniCapital Support Agreement,
the Assumption Letters, the Custody Agreement, and all other
instruments and documents heretofore or hereafter executed or delivered
to or in favor of any Lender or the Agent in connection with the Loans
made and transactions contemplated under this Agreement, as the same
may be amended, supplemented or replaced from the time to time.
"Lockbox Agreement" means a Security Deposit and Cash
Collateral Agreement between each Borrower, the Collection Bank and the
Agent substantially the form of Exhibit U hereto, as supplemented from
time to time in accordance with the terms thereof.
"Manufacturer" means any manufacturer of any Financed
Aircraft.
"Manufacturer's Warranty" means any warranty made or offered
by any Manufacturer with respect to any Financed Aircraft.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, prospects, operations or condition,
financial or otherwise, of the Borrowers and their respective
Subsidiaries (if any), taken as a whole, (ii) the ability of any Credit
Party to pay or perform its respective obligations, liabilities and
indebtedness under the Loan Documents as such payment or performance
becomes due in accordance with the terms thereof, or (iii) the rights,
powers and remedies of the Agent or any Lender under any Loan Document
or the validity, legality or enforceability thereof.
"Monthly Amortization Amount" shall have the meaning, with
respect to each Loan, set forth in the Lockbox Agreement.
"Mortgage Convention" means the Convention on the
International Recognition of Rights in Aircraft signed initially at
Geneva in 1948, as the same may be amended, modified or supplemented
from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which any Borrower or any ERISA
Affiliate is making, or is
<PAGE> 23
22
accruing an obligation to make, contributions or has made, or been
obligated to make, contributions within the preceding six (6) Fiscal
Years.
"NationsBank" means NationsBank, National Association.
"NationsBank Facility" shall mean any of the facilities
pursuant to (a) the NationsBank Warehouse Credit Agreement, (b) the
NationsBank Revolving Credit Agreement, (c) the NationsBank TAA or (d)
the NationsBank Securitization Loan
Agreement.
"NationsBank Revolving Credit Agreement" means the Credit
Agreement dated as of June 10, 1998, among UniCapital, NationsBank, as
agent, and the lenders party thereto, as such agreement may be amended,
modified or restated from time to time.
"NationsBank Securitization Loan Agreement" means the Loan and
Security Agreement dated as of July 1, 1998 among UCP Borrowing SPE
1998-1 Limited Partnership, Portfolio Financial Services Company, L.P.,
Kitty Hawk Funding Corporation, NationsBank as agent and lender and
each of the other lenders party thereto.
"NationsBank TAA" means a Transfer and Administration
Agreement dated as of June 22, 1998 among UCP Qualifying SPE 1998-1
Limited Partnership, UCP Operating SPE 1998-1 Limited Partnership,
Portfolio Financial Services Company, L.P., Kitty Hawk Funding
Corporation, NationsBank, as agent and lender and each of the other
lenders party thereto.
"NationsBank Warehouse Credit Agreement" means the Credit
Agreement dated as of June 10, 1998 among First Security Bank, National
Association, as trustee on behalf of that certain trust created under
the Trust Agreement (11111) dated as of June 9, 1998 between First
Security Bank, National Association and Aircraft 11111, Inc., a
Delaware corporation, the other borrowers referred to therein,
NationsBank, as agent, and the lenders referred to therein.
"Non-SPE Credit Party" means any owner (other than a
Beneficial Owner) of a Borrower or of a Beneficial Owner, if such owner
in either case is not required to be a Guarantor hereunder.
"Notes" means, collectively, the promissory notes of the
Borrowers evidencing Revolving Loans executed and delivered to the
Lenders as provided in Section 2.5 substantially in the form of Exhibit
F, with appropriate insertions as to amounts, dates and names of
Lenders.
"NSJ" means The NSJ Group, Inc., a Delaware corporation that
is the direct or indirect, wholly-owned subsidiary of UniCapital.
"Obligations" means the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and interest accruing after the
<PAGE> 24
23
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to any
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of any Borrower to the Agent (acting in any
capacity) or to any Lender (or, in the case of Rate Hedging
Obligations, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, any Rate Hedging
Obligation entered into with any Lender or any affiliate of any Lender
or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the Agent
(acting in any capacity) or to any Lender that are required to be paid
by any Borrower pursuant thereto) or otherwise.
"Operating Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership, trust or other legally authorized incorporated
or unincorporated entity, the bylaws, operating agreement, partnership
agreement, limited partnership agreement or other applicable documents
relating to the operation, governance or management of such entity.
"Organizational Action" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership, trust or other legally authorized incorporated
or unincorporated entity, any corporate, organizational or partnership
action (including any required shareholder, trustee, member or partner
action), or other similar official action, as applicable, taken by such
entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership, trust or other legally
authorized incorporated or unincorporated entity, the articles of
incorporation, certificate of incorporation, articles of organization,
certificate of limited partnership, trust agreement or other applicable
organizational or charter documents relating to the creation of such
entity.
"Original Qualified Appraisal" has the meaning assigned
thereto in Section 5.4.
"Other Market Carriers" means all Eligible Carriers other
than Developed Market Carriers and Emerging Market Carriers.
"Partnership Interests" shall have the meaning therefor
provided in the Pledge Agreement.
"Payment Date" means any date provided for herein on which the
principal of, interest on or other amounts in respect of the Loans is
due and payable.
"PBGC" means the Pension Benefit Guaranty Corporation and
any successor thereto.
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24
"Pension Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of any Borrower,
any Guarantor or any of their respective ERISA Affiliates or is assumed
by any Borrower, any Guarantor or any of their respective ERISA
Affiliates in connection with any Acquisition or (ii) has at any time
been maintained for the employees of any Borrower, any Guarantor or any
current or former ERISA Affiliate.
"Permanent Capital Markets Financing" shall mean an aircraft
lease securitization, enhanced equipment trust certificate or other
permanent aircraft-secured public or private capital markets
transaction (which, in each case, does not constitute bridge or interim
financing) for the benefit of UniCapital or a subsidiary of UniCapital,
occurring after the date hereof and producing net proceeds of at least
$200,000,000, excluding any secondary offering of UniCapital stock.
"Permitted Lien" means any Lien permitted by Section 8.4.
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Pledge Agreement" means, collectively (or individually as the
context may indicate), (i) that certain Pledge and Security Agreement
dated as of the date hereof between Cauff Lippman and the Agent (for
the benefit of the Agent and the Lenders), (ii) that certain Pledge and
Security Agreement dated as of the date hereof between Aircraft 22222,
Inc. and the Agent (for the benefit of the Agent and the Lenders), and
(iii) any additional Pledge and Security Agreement (substantially in
the form of Exhibit T-1 or T-2 attached hereto, as applicable),
delivered to the Agent pursuant to Section 5.2, 5.3 or 2.13, as
hereafter amended, supplemented or replaced from time to time.
"Pledged Interests" has the meaning given to such term in the
Pledge Agreement.
"Prime Rate" means the per annum rate of interest established
from time to time by the Reference Bank as its prime or reference rate,
which rate may not be the lowest rate of interest charged by the
Reference Bank to its customers.
"Principal Office" means the principal office of the Agent
presently located at 3 World Financial Center New York, New York 10285
or such other office and address as the Agent may from time to time
designate. Payments shall be made to the account specified in the
Lockbox Agreement or to such other account as the Agent may from time
to time specify in writing.
"Prohibited Countries" means those countries, as determined by
the Agent from time to time, in which Aircraft may not be operated by
lessees domiciled in such countries without procuring insurance
consistent with industry and securitization
<PAGE> 26
25
standards, which countries presently include Afghanistan, Albania,
Bosnia, Burma, Burundi, Cambodia, Cote d'Ivoire, Croatia, Cuba, Haiti,
Herzegovina, Iran, Iraq, North Korea, Laos, Lebanon, Libya, Montenegro,
Nigeria, Rwanda, Serbia, the former Soviet Republics, Syria, Vietnam,
Yemen, and Zaire.
"Purchase Price" with respect to any Aircraft means the actual
purchase price paid for such Aircraft by the Applicable Borrower,
together with the estimated out-of-pocket costs to be incurred by such
Applicable Borrower in such purchase (provided that such estimated
out-of-pocket costs shall not exceed 1% of such Purchase Price).
"Qualified Appraisal" means, with respect to any Financed
Aircraft, an appraisal of such Aircraft by a Qualified Appraiser, which
appraisal is prepared in accordance with ISTAT standards and opines as
to the Fair Market Value of such Aircraft, taking into account the
actual maintenance status of such Aircraft.
"Qualified Appraiser" means any of the following appraisal
firms selected and retained by UniCapital and reporting to UniCapital
and the Agent: Aircraft Information Services, Inc., BK Associates,
Inc., Morten Beyer, Simat, Helliesen & Eichner, Inc., Airclaims
Limited or Avitas, Inc.
"Qualified Trustee" means (i) Wilmington Trust Company, First
Security Bank, National Association, or another bank or trust company
having a combined capital and surplus of at least One Hundred Million
Dollars ($100,000,000) or (ii) any other Person acceptable to the
Agent.
"Quarterly Period" means a fiscal quarter of the Borrowers
and their Subsidiaries.
"Rated Carrier" means any Eligible Carrier identified on
Exhibit K attached hereto, as such Exhibit may be amended from time to
time pursuant to Section 7.20.
"Rate Hedging Obligations" means any and all obligations of
any Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
"Reference Bank" means Citibank, N.A.
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26
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Regulatory Change" means any change effective after the
Closing Date in United States federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes any of the Lenders, under any United States federal or
state or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital adequacy,
including those relating to "highly leveraged transactions," whether or
not having the force of law, and whether or not failure to comply
therewith would be unlawful and whether or not published or proposed
prior to the date hereof.
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
S&P or "P-1" by Moody's.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating more than 50% of
the aggregate Credit Exposures of all the Lenders on such date. For
purposes of the preceding sentence, the amount of the "Credit Exposure"
of each Lender shall be equal at all times (a) other than following the
occurrence and during the continuance of an Event of Default, to the
amount of its Revolving Credit Commitment; and (b) following the
occurrence and during the continuance of an Event of Default, to the
aggregate principal amount of such Lender's Applicable Commitment
Percentage of Revolving Credit Outstandings; provided that, for the
purpose of this definition only, if any Lender shall have failed to
fund its Applicable Commitment Percentage of any Loan, the Revolving
Credit Commitment of such Lender shall be deemed reduced by the amount
it so failed to fund for so long as such failure shall continue and
such Lender's Credit Exposure attributable to such failure shall be
deemed held by any Lender making more than its Applicable Commitment
Percentage of such Loan to the extent it covers such failure.
"Reserve Requirement" means, 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 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 Rate Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
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27
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Revolving Loans to the
Borrowers up to an aggregate principal amount at any one time
outstanding equal to such Lender's Applicable Commitment Percentage of
the Total Revolving Credit Commitment.
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Loans to the Borrowers by the Lenders
in the aggregate principal amount of the Total Revolving Credit
Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding.
"Revolving Credit Termination Date" means the earliest of (i)
the Stated Termination Date, (ii) the date of termination of Lenders'
obligations pursuant to Section 9.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrowers may voluntarily and
permanently terminate the Revolving Credit Facility by payment in full
of all Revolving Credit Outstandings, together with all accrued and
unpaid interest thereon and reduce the Total Revolving Credit
Commitment to zero pursuant to Section 2.7.
"Revolving Loan" means any borrowing pursuant to a Loan under
the Revolving Credit Facility in accordance with Article II.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill.
"Sabena Portfolio" means the group of Eligible Aircraft listed
on Exhibit P attached hereto.
"Security Agreement" means, collectively (or individually as
the context may indicate), any Mortgage and Security Agreement
(substantially in the form of Exhibit J attached hereto) delivered to
the Agent pursuant to Section 5.2, 5.3 or 2.13, as hereafter modified,
amended or supplemented from time to time.
"Security Instruments" means, collectively, the Pledge
Agreement, Security Agreement, the Lockbox Agreement and all other
agreements, instruments and other documents, whether now existing or
hereafter in effect, pursuant to which any Borrower, any Beneficial
Owner, any Subsidiary, any Intermediary or any other Person shall grant
or convey to the Agent or the Lenders a Lien in property as security
for all or any portion of the Obligations, as any of them may be
amended, modified or supplemented from time to time.
"Servicing Agreement" means the Servicing Agreement of even
date herewith between the Servicer and the Agent, in substantially the
form of Exhibit Q attached.
"Servicer" means Cauff, Lippman Aviation, Inc.
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28
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which any Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Stated Termination Date" means the date occurring 12 months
after the Closing Date, namely October 5, 1999.
"Subsidiary" means 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 one or more
Guarantors, Borrowers and/or by one or more of any Guarantor's
Subsidiaries or any Borrower's Subsidiaries. With respect to any
specified Guarantor or Borrower, the "Subsidiaries" of such Guarantor
or Borrower shall mean (y) any Subsidiary owned directly or indirectly
by such Guarantor or Borrower or by any of its Subsidiaries, or (z) any
trust with respect to which such Guarantor or such Borrower or any of
its Subsidiaries has a beneficial interest.
"Swap Agreement" means one or more agreements between any
Borrower and any Person with respect to Indebtedness evidenced by any
or all of the Notes, on terms mutually acceptable to such Borrower and
such Person, which agreements create Rate Hedging Obligations.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of any Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4068(f) of ERISA; or (iii) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (v) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA
for the termination of, or the appointment of a trustee to administer,
any Pension Plan; or (vi) the partial or complete withdrawal of any
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a
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Lien pursuant to Section 412 of the Code or Section 302 of ERISA; or
(viii) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or Section 4245
of ERISA, respectively; or (ix) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or
the institution by the PBGC of proceedings to terminate a Multiemployer
Plan under Section 4042 of ERISA.
"Total Revolving Credit Commitment" means a principal amount
equal to $500,000,000, as reduced from time to time in accordance with
Section 2.7.
"Trust Agreement" means each of the Trust Agreements between a
Beneficial Owner and a Qualified Trustee.
"Trust Estate" means all estate, right, title and interest of
each Trustee in and to each Aircraft, each lease and all related
documents and all other property of the Trustee, including, without
limitation, all amounts of rent, insurance proceeds (other than
liability insurance proceeds payable to or for the benefit of any
Borrower, any Beneficial Owner, any Lender or the Agent) and
requisition, indemnity or other payments or any kind for or with
respect to each Aircraft.
"Trustee" means a Qualified Trustee, solely in its capacity as
trustee under a Trust Agreement.
"Type" shall mean any type of Loan (i.e., a Base Rate Loan or
a Eurodollar Rate Loan).
"UniCapital" means UniCapital Corporation, a Delaware
corporation.
"UniCapital Registration Statement" means that certain
Registration Statement of UniCapital on Form S-1, Registration No.
333-46603, as filed with the Securities and Exchange Commission on
February 20, 1998, as amended, including all documents incorporated
therein by reference.
"UniCapital Special Purpose Corporation" means any corporation
(a) that is organized under the laws of any state of the United States
and has its principal place of business in the United States and (b)
which is a direct or indirect, wholly-owned Subsidiary of Cauff Lippman
or NSJ.
"UniCapital Subsidiary Trust" means any trust (a) that is
organized under the laws of a state of the United States and has its
principal place of business in the United States, (b) whose trustee is
a Qualified Trustee and (c) in which 100% of all beneficial interests
are owned directly by a direct or indirect wholly-owned Subsidiary of
Cauff Lippman or NSJ.
"UniCapital Support Agreement" means the Support Agreement
executed by UniCapital, substantially in the form of Exhibit O.
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30
"U.S. Carrier" means any Eligible Carrier principally located
in the United States of America.
"Voting Stock" means shares of 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 if the right so to vote has been
suspended by the happening of such a contingency.
"Weighted Average Lease Factor" means, as of any date of
determination, the ratio of (a) one-twelfth of the aggregate amount of
base rent scheduled to accrued under all Leases of Financed Aircraft
during the one-year period immediately succeeding such date of
determination divided by (b) the aggregate Fair Market Value of all
Financed Aircraft.
1.2 Rules of Interpretation. (a) All accounting terms not
specifically defined herein shall have the meanings assigned to such terms and
shall be interpreted in accordance with GAAP applied on a Consistent Basis.
(b) Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code of another
jurisdiction is controlling, in which case such terms shall have the meaning
given in the Uniform Commercial Code of the applicable jurisdiction.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of reference and
shall not constitute a part of any such document or affect the meaning,
construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references herein
to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and
schedules are references to articles, sections, paragraphs, clauses, annexes,
appendices, exhibits and schedules in or to this Agreement.
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such defined
term, and all references to the masculine gender shall include reference to the
feminine or neuter gender, and vice versa, as the context may require.
(f) When used herein or in any other Loan 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.
(g) 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
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31
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.
(h) All dates and times of day specified herein shall refer to
such dates and times in New York, New York.
(i) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity to
request) revisions to, the Loan Documents, and any rule of construction that
ambiguities are to be resolved against the drafting party shall be inapplicable
in the construing and interpretation of the Loan Documents and all exhibits,
schedules and appendices thereto.
(j) Any reference to an officer of any Borrower or any other
Person by reference to the title of such officer shall be deemed to refer to
each other officer of such Person, however titled, exercising the same or
substantially similar functions.
(k) All references to any agreement or document as amended,
modified or supplemented, or words of similar effect, shall mean such document
or agreement, as the case may be, as amended, modified or supplemented from time
to time only as and to the extent permitted therein and in the Loan Documents.
ARTICLE II
The Revolving Credit Facility
2.1 Revolving Loans. (a) Commitment. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Loans to any
of the Borrowers under the Revolving Credit Facility from time to time from the
Closing Date until the Revolving Credit Termination Date on a pro rata basis as
to the total borrowing requested by the applicable Borrower on any day
determined by such Lender's Applicable Commitment Percentage up to but not
exceeding the Revolving Credit Commitment of such Lender, provided, however,
that (A) the proceeds of such Loan shall be used solely to finance or refinance
the purchase by such Borrower of an Eligible Aircraft, and (B) the amount of
such Loan (together with any other Loans relating to such Aircraft) shall not
exceed the Applicable Aircraft Borrowing Base of such Aircraft; and provided,
further, that the Lenders will not be required and shall have no obligation to
make any such Loan (i) so long as a Default or an Event of Default has occurred
and is continuing or (ii) if the Agent has accelerated the maturity of any of
the Notes as a result of an Event of Default; and provided further, that
immediately after giving effect to each such Loan, (X) the amount of Revolving
Credit Outstandings shall not exceed the lesser of the Borrowing Base or the
Total Revolving Credit Commitment and (Y) none of the Concentration Restrictions
shall have been exceeded or otherwise violated. Within such limits, the
Borrowers may borrow, repay and reborrow under the Revolving Credit Facility on
a Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date; provided,
however, that (1) no Revolving Loan that is a Eurodollar Rate Loan shall be made
which has an Interest Period that extends beyond the Stated Termination Date and
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(2) each Revolving Loan that is a Eurodollar Rate Loan may, subject to the
provisions of Section 2.7, be repaid only on the last day of the Interest Period
with respect thereto unless such payment is accompanied by the additional
payment, if any, required by Section 4.5.
(b) Amounts. Except as otherwise permitted by the Lenders from
time to time, (i) the amount of Revolving Credit Outstandings shall not exceed
at any time the lesser of the Borrowing Base or the Total Revolving Credit
Commitment, and (ii) none of the Concentration Restrictions shall be exceeded;
and, in the event there shall be outstanding any such excess under clause (i) or
(ii), the Borrowers, jointly and severally, shall immediately make such payments
and prepayments as shall be necessary to comply with these restrictions. Each
Revolving Loan hereunder and each Conversion under Section 2.8, shall be in an
amount of at least $1,000,000.
(c) Procedures. An Authorized Representative shall give the
Agent (i) at least three (3) Business Days' irrevocable written notice by
telefacsimile transmission of an Interest Rate Selection Notice with appropriate
insertions, effective upon receipt, of each Revolving Loan that is to be
Converted into a Eurodollar Rate Loan prior to 10:30 A.M. and (ii) at least one
(1) Business Day's written notice, revocable only on or before noon the
following Business Day, by telefacsimile transmission of a Borrowing Notice with
appropriate insertions, effective upon receipt, of each Revolving Loan (which
shall be borrowed as a Base Rate Loan) prior to 10:30 A.M. and (iii) at least
one (1) Business Day's irrevocable written notice by telefacsimile transmission
of an Interest Rate Selection Notice with appropriate insertions, effective upon
receipt, of each Revolving Loan that is to be Converted into a Base Rate Loan
prior to 10:30 A.M. Each such notice shall (A) specify the name of the
respective Borrower, the amount of the borrowing, the date of borrowing or
Conversion (as applicable), type of Revolving Loan (Base Rate or Eurodollar
Rate), the date of borrowing and, if a Eurodollar Rate Loan, the Interest Period
to be used in the computation of interest and (B) identify the Financed Aircraft
the acquisition of which is to be financed with the proceeds of the borrowing.
Notice of receipt of such Borrowing Notice or Interest Rate Selection Notice, as
the case may be, together with the amount of each Lender's portion of a Loan
requested thereunder, shall be provided by the Agent to each Lender by
telefacsimile transmission with reasonable promptness, but (provided the Agent
shall have received such notice by 10:30 A.M.) not later than 1:00 P.M. on the
same day as the Agent's receipt of such notice.
(i) Promptly (and, to the extent feasible, not later than 2:00
P.M.) on the date specified for each borrowing under this Section 2.1,
each Lender shall, pursuant to the terms and subject to the conditions
of this Agreement, make the amount of the Loan or Loans to be made by
it on such day available by wire transfer to the Agent in the amount of
its pro rata share, determined according to such Lender's Applicable
Commitment Percentage of the Revolving Loan or Revolving Loans to be
made on such day. Such wire transfer shall be directed to the Agent at
the Principal Office and shall be in the form of Dollars constituting
immediately available funds. The amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made
available to the applicable Borrower by delivery of the proceeds
thereof to the Borrowers' Account or otherwise as shall be directed in
the applicable Borrowing Notice by an Authorized Representative and
reasonably acceptable to the Agent.
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(ii) Each Loan will be made initially as a Base Rate Loan. The
Borrowers shall have the option to elect the duration of the initial
and any subsequent Interest Periods and to Convert the Revolving Loans
in accordance with Section 2.8, provided that any Base Rate Loan must
be Converted within seven (7) Business Days after the date on which it
is borrowed into a Eurodollar Rate Loan and may thereafter be Converted
into a Base Rate Loan only in anticipation of a prepayment of such Loan
within one week after such Conversion into a Base Rate Loan. Eurodollar
Rate Loans and Base Rate Loans may be outstanding at the same time,
provided, however, there shall not be outstanding at any one time
Eurodollar Rate Loans for any or all of the Borrowers having more than
six (6) different Interest Periods. If the Agent does not receive an
Interest Rate Selection Notice giving notice of election of the
duration of an Interest Period by the time prescribed by Section 2.8,
the applicable Borrower shall be deemed to have elected for any
Eurodollar Loan an Interest Period of the duration provided in clause
(x) of the definition of Interest Period.
2.2 Payment of Interest. (a) The Borrowers, jointly and
severally, shall pay interest to the Agent for the account of each Lender on the
outstanding and unpaid principal amount of each Loan made by such Lender for the
period commencing on the date of such Loan until such Loan shall be due at the
then applicable Base Rate for Base Rate Loans or applicable Eurodollar Rate for
Eurodollar Rate Loans, as designated by the Authorized Representative pursuant
to Section 2.1; provided, however, that if any Event of Default shall occur and
be continuing, all amounts outstanding hereunder shall bear interest thereafter
at the Default Rate.
(b) Interest on each Loan shall be computed on the basis of a
year of 360 days and calculated in each case for the actual number of days
elapsed. Interest on each Loan shall be paid (x) monthly in arrears on the
fifteenth (15th) calendar day of each calendar month (or, if such day is not
Business Day, on the next succeeding Business Day), (y) upon payment or
prepayment of the principal amount of any Loan or any portion thereof, on the
amount so paid or prepaid and (z) at the Revolving Credit Termination Date.
2.3 Payment of Principal. (a) Scheduled Repayments; Voluntary
Prepayments. The principal amount of each Revolving Loan shall be due and
payable to the Agent for the benefit of each Lender in full on the Revolving
Credit Termination Date, or earlier as specifically provided herein. The
Borrower may prepay the outstanding principal amount of any Loan, in whole or in
part, upon one Business Day's notice to the Lender. All such prepayments must be
accompanied by accrued interest up to, and including, the date of such
prepayment and any compensation due under Section 4.5 hereof.
(b) Mandatory Prepayments. (i) Upon the sale of any Aircraft
or other asset by any Borrower, or upon the refinancing of any Indebtedness of
any Borrower arising from any Loan hereunder, the Borrowers, jointly and
severally, shall immediately pay to the Agent an amount equal to the net
proceeds of such sale or refinancing, which amount shall be applied by the Agent
to reduce outstanding principal and accrued interest on any Loans made to, or
for the benefit of, such Borrower. If any net proceeds of such sale or
refinancing remain after the repayment in full of all outstanding principal and
accrued interest on such Loans, if no Default or Event of Default exists at the
time, such excess proceeds shall be paid to the Applicable
<PAGE> 35
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Borrower and may be used by such Borrower in its discretion subject to
compliance with the terms of this Agreement and the other Loan Documents.
(ii) The Borrowers, jointly and severally, shall be required
to prepay the Loans, upon five Business Days' prior notice, in an amount equal
to any amount by which the aggregate outstanding principal amount of the Loans
exceeds the Borrowing Base. Alternatively, a Borrower may pledge additional
Collateral (valued in a manner reasonably acceptable to the Agent) to increase
the Borrowing Base and avoid such mandatory prepayment.
(iii) The Borrowers, jointly and severally, shall be required
to prepay the Loan relating to a Financed Aircraft, upon five Business Days'
prior notice, in an amount equal to any amount by which the estimated
out-of-pocket costs incurred by the Applicable Borrower in acquiring such
Financed Aircraft that were included in such Loan exceed the actual amount of
such expenses.
(iv) The Borrowers, jointly and severally, shall be required
to prepay the Loans upon the occurrence of an Event of Loss as, and on the date,
required by Section 3.8(b) of the Security Agreement.
(v) The Borrowers, jointly and severally, shall be required to
prepay the Loans in the amount distributed for that purpose under Section 5.1 of
the Lockbox Agreement.
2.4 Manner of Payment. Each payment of principal (including
any prepayment) and payment of interest and fees, and any other amount required
to be paid to the Lenders with respect to the Loans, shall be made to the Agent
at the Principal Office, for the account of each Lender, in Dollars and in
immediately available funds without setoff, deduction or counterclaim before
12:30 P.M. on the date such payment is due.
(i) The Agent shall deem any payment made by or on behalf of
any Borrower hereunder that is not made both in Dollars and in
immediately available funds and prior to 12:30 P.M. to be a
non-conforming payment. Any such payment shall not be deemed to be
received by the Agent until the time such funds become available funds.
Any non-conforming payment may constitute or become a Default or Event
of Default. Interest shall continue to accrue on any principal as to
which a non-conforming payment is made until the later of (x) the date
such funds become available funds or (y) the next Business Day at the
Default Rate from the date such amount was due and payable.
(ii) In the event that any payment hereunder or under the
Notes becomes due and payable on a day other than a Business Day, then
such due date shall be extended to the next succeeding Business Day
unless provided otherwise under clause (ii) of the definition of
"Interest Period"; provided that interest shall continue to accrue
during the period of any such extension and provided further, that in
no event shall any such due date be extended beyond the Revolving
Credit Termination Date.
(iii) Any payment or prepayment of any principal or interest
on any Loan hereunder shall be accompanied by a certificate signed by
an Authorized Representative
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35
and delivered to the Agent, which certificate shall identify such Loan,
the amount of principal and interest paid thereon, and the Borrower to
whom, or for whose benefit, such Loan was originally advanced.
2.5 Notes. Revolving Loans made by each Lender shall be
evidenced by the Note payable to the order of such Lender in the respective
amount of its Applicable Commitment Percentage of the Revolving Credit
Commitment, which Revolving Note shall be dated the Closing Date or a later date
pursuant to an Assignment and Acceptance and shall be duly completed, executed
and delivered by the Borrowers.
2.6 Pro Rata Payments. Except as otherwise provided herein,
(a) each payment on account of the principal of and interest on the Loans and
the fees described in Section 2.10 shall be made to the Agent for the account of
the Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by any Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from any Borrower.
2.7 Reductions. The Borrowers shall, by notice from an
Authorized Representative, have the right from time to time but not more
frequently than once each calendar month, upon not less than three (3) Business
Days' written notice to the Agent, effective upon receipt, to reduce the Total
Revolving Credit Commitment. The Agent shall give each Lender, within one (1)
Business Day of receipt of such notice, telefacsimile notice, or telephonic
notice (confirmed in writing), of such reduction. Each such reduction shall be
in the aggregate amount of $5,000,000 or such greater amount which is in an
integral multiple of $1,000,000, or the entire remaining Total Revolving Credit
Commitment, and shall permanently reduce the Total Revolving Credit Commitment.
Each reduction of the Total Revolving Credit Commitment shall be accompanied by
payment of the Revolving Loans to the extent that the principal amount of
Revolving Credit Outstandings exceeds the Total Revolving Credit Commitment
after giving effect to such reduction, together with accrued and unpaid interest
on the amounts prepaid. No such reduction shall result in the payment of any
Eurodollar Rate Loan other than on the last day of the Interest Period of such
Eurodollar Rate Loan unless such prepayment is accompanied by amounts due, if
any, under Section 4.5.
2.8 Conversions and Elections of Subsequent Interest Periods.
Subject to the limitations set forth below and in Article IV, the Borrowers
may:
(a) upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before
10:30 A.M. on any Business Day, Convert all or a part of Eurodollar
Rate Loans to Base Rate Loans on the last day of the Interest Period
for such Eurodollar Rate Loans; provided, that a Conversion of
Eurodollar Rate Loans into Base Rate Loans shall be made by Borrower
only in anticipation of a prepayment of such Base Rate Loans within one
week after such Conversion; and
<PAGE> 37
36
(b) provided that no Default or Event of Default shall have
occurred and be continuing and upon delivery, effective upon receipt,
of a properly completed Interest Rate Selection Notice to the Agent on
or before 10:30 A.M. three (3) Business Days' prior to the date of such
election or Conversion:
(i) 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
(ii) Convert Base Rate Loans to Eurodollar Rate
Loans on any Business Day (and shall so Convert any Base Rate
Loan to a Eurodollar Rate Loan within one week after the
borrowing date therefor).
Each election and Conversion pursuant to this Section 2.8
shall be subject to the limitations on Eurodollar Rate Loans set forth in the
definition of "Interest Period" herein and in Sections 2.1, 2.3 and Article IV.
The Agent shall give written notice to each Lender of such notice of election or
Conversion prior to 3:00 P.M. on the day such notice of election or Conversion
is received. All such Continuations or Conversions of Loans shall be effected
pro rata based on the Applicable Commitment Percentages of the Lenders.
2.9 Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment which shall be available to the Borrowers as Loans
shall be reduced by the aggregate amount of Revolving Credit Outstandings.
2.10 Fees. Borrower shall pay the fees specified in the Fee
Letter on the dates specified therein.
2.11 Deficiency Advances. No Lender shall be responsible for
any default of any other Lender in respect to such other Lender's obligation to
make any Loan hereunder nor shall the Revolving Credit Commitment of any Lender
hereunder be increased as a result of such default of any other Lender. Without
limiting the generality of the foregoing, in the event any Lender shall fail to
advance funds to any Borrower as herein provided, the Agent may in its
discretion, but shall not be obligated to, advance under the applicable Note in
its favor as a Lender all or any portion of such amount or amounts (each, a
"deficiency advance") and shall thereafter be entitled to payments of principal
of and interest on such deficiency advance in the same manner and at the same
interest rate or rates to which such other Lender would have been entitled had
it made such Loan under its Note; provided that, (i) such defaulting Lender
shall not be entitled to receive payments of principal, interest or fees with
respect to such deficiency advance until such deficiency advance shall be paid
by such Lender and (ii) upon payment to the Agent from such other Lender of the
entire outstanding amount of each such deficiency advance, together with accrued
and unpaid interest thereon, from the most recent date or dates interest was
paid to the Agent by a Borrower on each Loan comprising the deficiency advance
at the interest rate per annum for overnight borrowing by the Agent from the
Federal Reserve Bank, then such payment shall be credited against the applicable
Note of the Agent in full payment of such deficiency advance and such Borrower
shall be deemed to have borrowed the amount of such
<PAGE> 38
37
deficiency advance from such other Lender as of the most recent date or dates,
as the case may be, upon which any payments of interest were made by such
Borrower thereon.
2.12 Use of Proceeds. The proceeds of each Loan made pursuant
to the Revolving Credit Facility hereunder shall be used by the Applicable
Borrower to finance or to refinance the purchase by such Borrower of an Eligible
Aircraft.
2.13 Designation of Borrowing Affiliate; Releases. (a) An
Authorized Representative may from time to time designate any UniCapital
Subsidiary Trust or UniCapital Special Purpose Corporation which has not joined
in the execution of this Agreement as a "Borrowing Affiliate" hereunder by
causing such UniCapital Subsidiary Trust or UniCapital Special Purpose
Corporation to execute and deliver a duly completed Assumption Letter (in the
form attached hereto as Exhibit R) to the Agent with the written acknowledgment
of the Borrowers and the Agent at the foot thereof, together with (a) Facility
Guaranties executed by each Beneficial Owner of any such UniCapital Subsidiary
Trust, by each Subsidiary of any such Beneficial Owner (other than such
UniCapital Subsidiary Trust), by each Subsidiary of such UniCapital Subsidiary
Trust or of such UniCapital Special Purpose Corporation, and by the Applicable
Intermediary (if any), (b) Security Agreements signed by such UniCapital
Subsidiary Trust or UniCapital Special Purpose Corporation, by each Beneficial
Owner of any such UniCapital Subsidiary Trust, by each Subsidiary of any such
Beneficial Owner, by each Subsidiary of such UniCapital Subsidiary Trust or
UniCapital Special Purpose Corporation, and by the Applicable Intermediary (if
any), (c) Pledge Agreements signed by the respective Beneficial Owners and other
owners, granting a security interest in the Pledged Interests in such UniCapital
Subsidiary Trust or UniCapital Special Purpose Corporation, in any Subsidiary
thereof, in any Beneficial Owner and in any Subsidiary thereof, and in the
Applicable Intermediary (if any), and (d) all additional documents required
under such Assumption Letter. Upon such execution, delivery and consent, such
UniCapital Subsidiary Trust or UniCapital Special Purpose Corporation (as the
case may be) shall for all purposes be a party hereto as a Borrower as fully as
if it had executed and delivered this Agreement.
(b) So long as (w) all Loans made to or on behalf of any
Borrower, together with all accrued interest on such Loans, have been paid in
full, (x) all other outstanding Obligations of such Borrower (except Obligations
to pay principal and interest on Loans other than those Loans described in
clause (w)) have been paid in full, (y) no Default or Event of Default has
occurred and will be continuing after giving effect to such termination, and (z)
any prepayment required under Section 2.3(b) has been made, then such Borrower
may, by not less than fourteen (14) days prior notice to the Agent (which shall
promptly notify the Lenders thereof), (i) terminate its status as a "Borrowing
Affiliate" and "Borrower" hereunder and under the other Loan Documents, and (ii)
(with respect to any Beneficial Owner of such Borrower) unless such Person also
holds a beneficial interest in any other Borrower, to terminate the status of
such Person and any other Subsidiary of such Person as a "Guarantor" hereunder
and under the other Loan Documents, and (iii) to terminate the status of the
Applicable Intermediary (if any) and any other Subsidiary of such Borrower as a
"Guarantor" hereunder and under the other Loan Documents. Upon such terminations
(provided the conditions to such terminations are satisfied), the Agent shall
take all actions reasonably requested by such Borrower (A) to release the Liens
of the Agent on all Aircraft and other Collateral owned by such Borrower and its
Subsidiaries
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38
(including the Applicable Intermediary, if any) and to release such Borrower and
such Subsidiaries from all of their respective obligations under the Loan
Documents (including without limitation a written release to such effect), (B)
unless such Beneficial Owner also holds a beneficial interest in any other
Borrower, to release the Liens of the Agent on all Collateral owned by such
Beneficial Owner and its other Subsidiaries and to release such Beneficial Owner
and such other Subsidiaries from all of their respective obligations under the
Loan Documents (including without limitation a written release to such effect),
(C) to release the Lien of the Agent with respect to any Pledged Interests in
such Borrower, its Subsidiaries and the Applicable Intermediary, and (D) (unless
such Beneficiary Owner also holds a beneficial interest in any other Borrower)
to release the Lien of the Agent with respect to any Pledged Interests in such
Beneficial Owner. For the purposes of this Section 2.13, the Initial Borrower
shall not be deemed to be a "Borrowing Affiliate." Any provision of this Section
2.13 or any other provision of any Loan Document notwithstanding, in no event
shall UniCapital be released from its obligations to pay indemnification to, or
reimburse any costs or expenses of, the Agent or any Lender (including without
limitation the obligations under Article IV and Sections 4.6, 7.15, 11.5 and
11.9), which agreements and obligations shall survive any release or termination
of any Credit Party pursuant to this Section 2.12.
2.14 Joint and Several Liability. Each Borrower (including
without limitation the Initial Borrower and each Borrowing Affiliate) agrees and
acknowledges that the Obligations constitute and will constitute joint and
several obligations and liabilities of the Borrowers; provided, however, that
anything herein or in any other Loan Document to the contrary notwithstanding,
the maximum liability of each Borrower with respect to the joint and several
liability under this Section 2.14 shall in no event exceed the amount which can
be guaranteed by such Borrower under applicable federal and state laws relating
to the insolvency of debtors. Each Borrower further agrees and acknowledges that
all actions taken, elections made and notices and certificates furnished or
received by it under or pursuant to the Loan Documents shall constitute the
action, election, notice or certification of all of the Borrowers under the Loan
Documents, and that each Authorized Representative shall have full authority to
act for and on behalf of all of the Borrowers for all purposes of the Loan
Documents. Each Borrower agrees that the joint and several liability of the
Borrowers shall not be impaired or affected by any modification, supplement,
extension or amendment of any contract or agreement to which the parties thereto
may hereafter agree, nor by any modification, release or other alteration of any
of the rights of the Agent or any Lender with respect to the Collateral other
than as provided in Section 2.13(b) hereof, nor by any delay, extension of time,
renewal, compromise or other indulgence granted by the Agent, any Lender or any
other Person with respect to any of the Obligations, nor by any other agreements
or arrangements whatever with any other Borrower or with anyone else, each
Borrower hereby waiving all notice of any such delay, extension, release,
substitution, renewal, compromise or any such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consenting to
be bound thereby as fully and effectually as if it had expressly agreed thereto
in advance. The liability of each Borrower hereunder is direct and unconditional
as to all of the Obligations hereunder, and may be enforced without requiring
the Agent, any Lender or any other Person first to resort to any other right,
remedy or security; no Borrower shall have any right of subrogation,
reimbursement or indemnity whatsoever, nor any right of recourse to security for
indemnity whatsoever, nor any right of recourse to security for any of the
Obligations hereunder, unless and until all of said
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39
Obligations have been paid in full; except as provided in Section 2.13(b) hereof
and subject to the proviso to the first sentence of this Section 2.14, nothing
shall discharge or satisfy the liability of any Borrower hereunder except the
full payment and performance of all of the Obligations; any and all present and
future debts and obligations of each Borrower to the other Borrowers are hereby
waived and postponed in favor of and subordinated to the full payment and
performance of all present and future Obligations of the Borrowers to the Agent,
the Lenders and any other Person.
2.15 Eligible Lease Involving Eligible Intermediary. In lieu
of leasing a Financed Aircraft directly to an Eligible Carrier, a Borrower may
lease such Financed Aircraft directly to an Eligible Intermediary pursuant to an
Eligible Lease described in clause (X) of the proviso to the definition of
"Eligible Lease"; provided that
(a) such Eligible Intermediary simultaneously subleases such
Aircraft to an Eligible Carrier pursuant to an Eligible Lease described
in clause (Y) of the proviso to the definition of "Eligible Lease" that
is expressly stated to be subject and subordinate to the Borrower's
Lease and such sublease is pledged as collateral security for the
Obligations; provided that such Eligible Carrier is not a U.S. Carrier;
(b) in the case of any Loan with respect to such Aircraft, all
Loan conditions that pertain to any Eligible Lease or other Lease by a
Borrower of such Aircraft (including without limitation requirements
concerning the perfection of Liens on Collateral, and delivery of
originals of Leases and Lessee Estoppel Certificates) shall be
satisfied with respect to each such Lease to or by the Applicable
Intermediary;
(c) all provisions of any Loan Document that pertain to any
Eligible Lease or other Lease by a Borrower of such Aircraft shall
apply to each such Lease to or by the Applicable Intermediary; and
(d) the lease/sublease structure shall not result in adverse
tax or other consequences to the Agent or any Lender which have not
been indemnified or otherwise addressed to the reasonable satisfaction
of the Agent.
ARTICLE III
Security
3.1 Security. As security for the full and timely payment and
performance of all Obligations, the Credit Parties shall on or before the date
of the initial Loan do or cause to be done all things necessary in the opinion
of the Agent and its counsel to grant to the Agent for the benefit of the
Lenders a duly perfected first priority security interest under all applicable
laws (including without limitation under the FAA Act (in the case of an Aircraft
registered in the United States), or any Applicable Foreign Aviation Laws (in
the case of any other Aircraft)) in all Collateral subject to no prior Lien or
other encumbrance (that, in each case, has not previously been satisfied in
full) or restriction on transfer (other than Permitted Liens and restrictions on
<PAGE> 41
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transfer imposed by applicable laws or referred to in Schedule 6.7); provided,
however, that to the extent that a duly perfected, first priority Lien and
security interest on such Aircraft is not possible, or is impractical
(commercially or otherwise), then with the Agent's consent (which consent shall
not be unreasonably withheld), the Security Agreement with respect to such
Aircraft shall not be required or shall be modified to provide such Lien, such
priority and such perfection, if any, as shall not be impossible or impractical
(commercially or otherwise)
3.2 Further Assurances. At the request of the Agent, each
Borrower will, or will cause other Credit Parties (as the case may be), to,
execute, by its duly authorized officers, alone or with the Agent, any
certificate, instrument, statement or document, or to procure any such
certificate, instrument, statement or document, or to take such other action
(and pay all connected costs) which the Agent reasonably deems necessary from
time to time to create, continue or preserve the liens and security interests in
Collateral (and the perfection and priority thereof) of the Agent contemplated
hereby and by the other Loan Documents and specifically including all Collateral
acquired by any Borrower or any Guarantor or any other Credit Party after the
Closing Date.
3.3 Information Regarding Collateral. Each Borrower
represents, warrants and covenants that (i) the chief executive office of each
Borrower and each other Person providing Collateral pursuant to a Security
Instrument (each, a "Grantor") at the Closing Date is located at the address or
addresses specified on Schedule 3.3, and (ii) Schedule 3.3 contains a true and
complete list of (a) the name and address of each Grantor and of each other
Person that has effected any merger or consolidation with a Grantor or
contributed or transferred to a Grantor any property constituting Collateral at
any time since January 1, 1997 (excluding Persons making sales in the ordinary
course of their businesses to a Grantor of property constituting inventory in
the hands of such seller), (b) each location of the chief executive office and
principal place of business of each Grantor at any time since January 1, 1997,
(c) each location in which goods constituting Collateral (other than Aircraft)
are or have been located since January 1, 1997, (d) the country of registration
(if applicable) of each Aircraft; and (e) each trade name used by any Grantor
since January 1, 1997 and the purposes for which it was used. No Borrower shall
change, or permit any other Grantor to change, the location of its chief
executive office or principal place of business or any location specified in
clause (c) of the immediately preceding sentence, or use or permit any other
Grantor to use, any additional trade style, except upon giving not less than
thirty (30) days' prior written notice to the Agent and taking or causing to be
taken all such action at the Borrowers' or such other Grantor's expense as may
be reasonably requested by the Agent to perfect or maintain the perfection of
the Lien of the Agent in Collateral.
3.4 Quiet Enjoyment. The Agent and each Lender hereby agree
that, so long as no Lease Event of Default shall have occurred and be continuing
under an Eligible Lease, it will not interfere with the quiet enjoyment of the
possession and use of the Aircraft by the Applicable Carrier during the term of
such Eligible Lease and it will (subject to any requirements or restrictions
imposed by applicable law) dispose of its interest in the Eligible Aircraft
leased under such Eligible Lease expressly subject to such Eligible Lease and on
terms such that the purchaser provides a similar right of quiet enjoyment to
such Applicable Carrier. Upon the request of any Borrower, the Agent (on behalf
of itself and the Lenders) will confirm the immediately preceding sentence in
writing to any Applicable Carrier.
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ARTICLE IV
Change in Circumstances
4.1 Increased Cost and Reduced Return. (a) 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 Lending Office) with any request or
directive (whether or not having the force of law) of any such governmental
authority, central bank, or comparable agency issued after the date hereof:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
Rate Loans, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Rate Loans (other than taxes
covered by Section 4.6 and changes in the rate of tax imposed on the
overall net income of such Lender by the jurisdiction in which such
Lender has its principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, compulsory loan, 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 Lender (or its Applicable Lending Office),
including the Revolving Credit Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting this Agreement or its Loans or any of such extensions of
credit or liabilities or 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 Loans or to reduce any sum received or receivable by such Lender
(or its Applicable Lending Office) under this Agreement or its Note with respect
to any Eurodollar Rate Loans, then UniCapital and the Borrowers, jointly and
severally, shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction, provided that in
determining such costs, no Lender shall treat the Borrowers less favorably than
other borrowers of similar size and circumstances. If any Lender requests
compensation by UniCapital or any Borrower under this Section 4.1(a), the
Borrowers may, by notice to such Lender (with a copy to the 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
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(in which case the provisions of Section 4.4 shall be applicable); provided that
such suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) 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 issued after
the date hereof, 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 UniCapital and
the Borrowers, jointly and severally, shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.
(c) Each Lender shall promptly notify UniCapital, the Borrowers and the
Agent of any event of which it has knowledge occurring after the date hereof,
which will entitle a Lender to compensation pursuant to this Section 4.1, and
such Lender shall, upon written request by UniCapital or any Borrower, designate
a different Applicable Lending Office if such designation will avoid the need
for, or 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 4.1 shall furnish to the Borrowers and the Agent
a statement setting forth the additional amount or amounts to be paid 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.
4.2 Limitation on Types of Loans. If on or prior to the first
day of any Interest Period for any Eurodollar Rate Loan:
(a) the 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
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrowers 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 Borrowers shall, jointly and
severally, 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 Base Rate Loans in accordance with the terms of this Agreement.
<PAGE> 44
43
4.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate Loans
hereunder, then such Lender shall promptly notify the Borrowers thereof and such
Lender's obligation to make or Continue Eurodollar Rate Loans and to Convert
other Types of Loans into Eurodollar Rate Loans shall be suspended until such
time as such Lender may again make, maintain, and fund Eurodollar Rate Loans (in
which case the provisions of Section 4.4 shall be applicable).
4.4 Treatment of Affected Loans. If the obligation of any
Lender to make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any
other Type into, Loans of a particular Type shall be suspended pursuant to
Section 4.1 or 4.3 hereof (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 4.3 hereof, on such earlier date as
such Lender may specify to the Borrowers with a copy to the Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 4.1 or 4.3 hereof that gave rise to such Conversion no
longer exist:
(a) 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
(b) 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 Borrowers (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 4.4 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 Revolving
Credit Commitments.
4.5 Compensation. Upon the request of any Lender, UniCapital
and the Borrowers, jointly and severally, 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 incurred by it as a result of:
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44
(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 9.1) on a date other than
the last day of the Interest Period for such Loan; or
(b) any failure by any Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article V to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Rate 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.
4.6 Taxes. (a) Any and all payments by any Borrower to or for
the account of any Lender or the Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
taxes, duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, adopted after the date hereof, excluding, in
the case of each Lender and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office) or the 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 "Taxes"). If any Borrower shall be required by
law to deduct any Taxes adopted after the date hereof from or in respect of any
sum payable under this Agreement or any other Loan Document to any Lender or the
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 4.6) such Lender or the Agent receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Borrower shall make such deductions, (iii) such Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) such Borrower shall furnish to the
Agent, at its address referred to in Section 11.2, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, UniCapital and the Borrowers agree, jointly
and severally, to pay 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 Loan Document or from
the execution or delivery of, or otherwise with respect to, this Agreement or
any other Loan Document (hereinafter referred to as "Other Taxes").
(c) UniCapital and the Borrowers agree, jointly and severally,
to indemnify each Lender and the Agent for the full amount of Taxes and Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 4.6) paid by
such Lender or the 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
any Borrower or the Agent (unless such failure is due to a change in treaty, law
or regulation
<PAGE> 46
45
occurring subsequent to the date on which a form originally was required to be
provided), shall provide the Borrowers and the 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 and (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service.
(e) For any period with respect to which a Lender has failed
to provide the Borrowers and the Agent with the appropriate form pursuant to
Section 4.6(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 4.6(a) or 4.6(b) with respect to United States withholding taxes;
provided, however, that should a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to Taxes because of
its failure to deliver a form required hereunder, each Borrower shall take such
steps as such Lender shall reasonably request to assist such Lender to recover
such Taxes.
(f) If UniCapital or any Borrower is required to pay
additional amounts to or for the account of any Lender pursuant to this Section
4.6, then such Lender will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in the sole
judgment of such Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of
Taxes, UniCapital or the applicable Borrower shall furnish to the Agent the
original or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement
of UniCapital or any Borrower hereunder, the agreements and obligations of
UniCapital and each Borrower contained in this Section 4.6 shall survive the
termination of the Revolving Credit Commitments and the payment in full of the
Loans.
(i) UniCapital has executed this Credit Agreement to indicate
its agreement to be bound by the terms of this Article IV, Sections 2.13, 7.15,
11.5 and 11.9, and any other provision of this Agreement that is applicable to
UniCapital.
ARTICLE V
Conditions to Making Loans
5.1 Conditions of Closing. The obligation of the Lenders to
make the Revolving Credit Facility available to any Borrower is subject to the
conditions precedent that:
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46
(a) the Agent shall have received on the Closing Date, in form
and substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement, the
Notes, the initial Facility Guaranties, the initial Security
Instruments (but not a Security Agreement or Lockbox Agreement
unless Loans are to be made to the Initial Borrower), the
UniCapital Support Agreement and the other Loan Documents,
together with all schedules and exhibits thereto;
(ii) the favorable written opinion or opinions with
respect to the Loan Documents and the transactions
contemplated thereby of special counsel to the Credit Parties
dated the Closing Date, addressed to the Agent (on behalf of
itself and the Lenders), substantially in the form of Exhibit
G-1 or otherwise reasonably satisfactory to special counsel to
the Agent;
(iii) resolutions of the boards of directors or other
appropriate governing body (or of the appropriate committee
thereof) of UniCapital and each Credit Party (or, in the case
of a Credit Party that is a trust, resolutions of the
appropriate board or committee of each trustee thereof)
certified by its secretary or assistant secretary as of the
Closing Date, approving and adopting the Loan Documents to be
executed by such Person, and authorizing the execution and
delivery thereof;
(iv) specimen signatures of officers of UniCapital
and each of the Credit Parties executing the Loan Documents on
behalf of UniCapital or such Credit Party, certified by the
secretary or assistant secretary of UniCapital or such Credit
Party;
(v) the Organizational Documents of UniCapital and
each of the Credit Parties and each of the trustees for each
UniCapital Subsidiary Trust certified as of a recent date by
the Secretary of State or comparable official of its
jurisdiction of organization (provided that the trust
agreement of a UniCapital Subsidiary Trust may be certified by
the secretary or assistant secretary of its Beneficial Owner);
(vi) Operating Documents of UniCapital and each of
the Credit Parties and each of the trustees for each
UniCapital Subsidiary Trust certified as of the Closing Date
as true and correct by its secretary or assistant secretary;
(vii) certificates issued as of a recent date by the
Secretaries of State or comparable officials of the respective
jurisdictions of formation of UniCapital and each of the
Credit Parties (excluding UniCapital Subsidiary Trusts, but
including each trustee thereof) as to the due existence and
good standing of such Person;
(viii) appropriate certificates of qualification to
do business, good standing and, where appropriate, authority
to conduct business under assumed name, issued in respect of
UniCapital and each of the Credit Parties (excluding
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47
UniCapital Subsidiary Trusts, but including each trustee
thereof) as of a recent date by the Secretary of State or
comparable official of each jurisdiction in which the failure
to be qualified to do business or authorized so to conduct
business could have a Material Adverse Effect;
(ix) notice of appointment of the initial Authorized
Representative(s);
(x) fully-executed Uniform Commercial Code financing
statements appropriate for filing in all places required by
applicable law to perfect the Liens of the Agent under the
Security Instruments as a first priority Lien as to items of
Collateral in which a security interest may be perfected by
the filing of financing statements, and such other documents
and/or evidence of other actions as may be necessary under
applicable law to perfect the Liens of the Agent under the
Security Instruments as a first priority Lien in and to such
other Collateral as the Agent may require, including without
limitation:
(1) the delivery by the Borrowers of all
stock certificates and other certificates, if any,
evidencing ownership of any Pledged Interests,
accompanied in each case by duly executed stock or
transfer powers (or other appropriate transfer
documents) in blank affixed thereto; and
(2) the delivery by the Borrowers of
"control agreements" that have been executed by the
respective issuers (and consented to by the
respective Credit Parties) with respect to any
uncertificated Pledged Interests; and
(xi) evidence that all fees payable by the Borrowers
on the Closing Date to the Agent and the Lenders have been
paid in full; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) no litigation, action, suit, investigation or
other arbitral, administrative or judicial proceeding shall be
pending or threatened which could reasonably be likely to
result in a Material Adverse Effect; and
(ii) UniCapital and the Credit Parties shall have
received all approvals, consents and waivers, and shall have
made or given all necessary filings and notices as shall be
required to consummate the transactions contemplated hereby
without the occurrence of any default under, conflict with or
violation of (A) any applicable law, rule, regulation, order
or decree of any Governmental Authority or arbitral authority
or (B) any agreement, document or instrument to which any of
the Credit Parties is a party or by which any of them or their
properties is bound.
5.2 Conditions of Initial Loan. The obligation of the Lenders
to make the initial Loan under the Revolving Credit Facility is subject to the
conditions precedent that:
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48
(a) each of the conditions to making the Revolving Credit
Facility available to the Borrowers, as set forth in Section 5.1, shall
have been satisfied on or prior to the date of the initial Loan;
(b) the representations and warranties of UniCapital and the
Credit Parties set forth in Article VI and in each of the other Loan
Documents shall be true and correct in all material respects on and as
of the date of such Loan, with the same effect as though such
representations and warranties had been made on and as of such date,
except to the extent that such representations and warranties expressly
relate to an earlier date;
(c) the Borrowing Affiliate with respect to such Loan shall
have executed and delivered to the Agent an Assumption Letter, and each
Borrower and the Agent shall have executed such Assumption Letter and
the Borrowing Affiliate shall have delivered to the Agent all other
agreements, instruments and documents required by such Assumption
Letter;
(d) the Borrowing Affiliate with respect to such Loan shall
have delivered to the Agent (i) Facility Guaranties fully executed by
any Beneficial Owner of such Borrowing Affiliate, by each Subsidiary of
any such Beneficial Owner (other than such Borrowing Affiliate), by
each Subsidiary of such Borrowing Affiliate and by the Applicable
Intermediary (if any); (ii) Pledge Agreements fully executed by the
appropriate pledgors, granting a security interest in all Pledged
Interests with respect to each such Beneficial Owner, such Borrowing
Affiliate, each Subsidiary of any Beneficial Owner, each Subsidiary of
such Borrowing Affiliate, and the Applicable Intermediary (if any); and
(iii) Security Agreements fully executed by such Borrowing Affiliate,
any Beneficial Owner of such Borrowing Affiliate, each Subsidiary of
any Beneficial Owner, each Subsidiary of such Borrowing Affiliate, and
the Applicable Intermediary (if any);
(e) the Agent shall have received substantially final drafts
of the following a reasonable period of time prior to the date of the
Loan, an organized pre-closing of the required documentation shall have
occurred at least one Business Day prior to the date of the Loan, and
the Agent shall have received final versions of the following, in form
and substance satisfactory to the Agent and the Lenders, on or prior to
the date of the Loan:
(i) each of the documents and instruments (including
without limitation the opinions of counsel, the resolutions of
boards of directors or other appropriate governing bodies or
committees, the specimen signatures, officer's certificates,
Organizational Documents, Operating Documents, and
governmental certificates of existence, qualification, good
standing and assumed name) required by Section 5.1 as if such
Borrowing Affiliate had been a Borrowing Affiliate (and its
Beneficial Owner, their respective Subsidiaries and the
Applicable Intermediary (if any) had been in such positions)
on the Closing Date, provided that if UniCapital or any
Non-SPE Credit Party has previously delivered such opinions,
resolutions, specimen signatures, officer's certificates and
governmental certificates in connection with the Closing Date
or a Loan, it shall not be required to re-submit any such
documents in connection with a subsequent Loan except to
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49
the extent (1) the prior opinions or resolutions did not cover
any additional Loan Documents executed by UniCapital or
Non-SPE Credit Party in connection with such subsequent Loan,
or (2) the specimen signatures or officer's certificates are
no longer accurate, or (3) any Organizational Document or
Operating Agreement has been amended, modified or supplemented
or there are any additional Organizational Documents or
Operating Agreements;
(ii) with respect to each Financed Aircraft
registered in the United States, the favorable written opinion
with respect to the Loan Documents and the transactions
contemplated thereby of FAA Counsel dated the Closing Date,
addressed to the Agent (on behalf of itself and the Lenders),
substantially in the form of Exhibit G-2 or otherwise
reasonably satisfactory to special counsel to the Agent;
(iii) with respect to every other Financed Aircraft,
the favorable written opinion with respect to the Loan
Documents and the transactions contemplated thereby of local
counsel in each Applicable Foreign Jurisdiction dated the
Closing Date, addressed to the Agent (on behalf of itself and
the Lenders), substantially in the form of Exhibit G-3 or
otherwise reasonably satisfactory to special counsel to the
Agent;
(iv) certificates of insurance from qualified brokers
of aircraft insurance or other evidence satisfactory to the
Agent, evidencing all insurance required by the Loan Documents
(including without limitation all insurance required by
Exhibit M with respect to each Aircraft that is to be a
Financed Aircraft);
(v) an initial Borrowing Notice;
(vi) a certificate of an Authorized Representative
containing computations of the Borrowing Base, demonstrating
compliance with the Concentration Restrictions and providing
information about the Financed Aircraft, in each case after
giving effect to such Loan and any related Financed Aircraft;
(vii) fully-executed Uniform Commercial Code
financing statements appropriate for filing in all places
required by applicable law to perfect the Liens of the Agent
under the Security Instruments as a first priority Lien as to
items of Collateral in which a security interest may be
perfected by the filing of financing statements, and such
other documents and/or evidence of other actions as may be
necessary under applicable law to perfect the Liens of the
Agent under the Security Instruments as a first priority Lien
in and to such other Collateral as the Agent may require,
including without limitation:
(1) the delivery by the Borrowers of all
stock certificates and other certificates, if any,
evidencing ownership of any Pledged Interests,
accompanied in each case by duly executed stock or
transfer powers (or other appropriate transfer
documents) in blank affixed thereto; and
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50
(2) the delivery by the Borrowers of
"control agreements" that have been executed by the
respective issuers (and consented to by the
respective Credit Parties) with respect to any
uncertificated Pledged Interests;
(3) with respect to each Financed Aircraft
registered in the United States or the Lien on which
is to be recorded in the United States, evidence of
the filing with the FAA Recording Office of the
Security Agreement (and all supplements thereto)
executed by the Applicable Borrower and any
Applicable Intermediary and all other documents
required by such office or applicable law in order to
maintain a first priority perfected Lien on such
Financed Aircraft, and the Eligible Lease thereof;
(4) with respect to each other Financed
Aircraft, evidence of the filing with each applicable
recording office in each Applicable Foreign
Jurisdiction of all documents required by such office
or any Applicable Foreign Aviation Law in order to
maintain a first priority perfected Lien on such
Financed Aircraft, the Eligible Lease thereof or, if
applicable, the stock or beneficial interest in the
Applicable Borrower;
(5) a copy of the executed purchase
agreement and executed bill of sale evidencing the
purchase by the Applicable Borrower of each Financed
Aircraft;
(6) copies of the certificates of aircraft
registration issued by the FAA and certificates of
airworthiness issued by the FAA, in each case with
respect to each Aircraft registered in the United
States; and
(7) evidence of registration and other
applicable qualification issued by any Applicable
Foreign Jurisdiction to the extent such registration
or qualification is required by an Applicable Foreign
Aviation Law, in each case with respect to each
Aircraft not registered in the United States;
(viii) results of a search of Liens filed with the
FAA or any Applicable Foreign Jurisdiction with respect to any
Aircraft that is or is to be a Financed Aircraft under the
initial Loan;
(ix) three (3) Qualified Appraisals, each prepared by
a separate Qualified Appraiser and opining as to the Fair
Market Value of each Aircraft that is or is to be a Financed
Aircraft under the initial Loan;
(x) the fully-executed originals of the Eligible
Lease relating to each Aircraft that is or is to be a Financed
Aircraft under the initial Loan and the chattel paper
originals thereof pursuant to Section 3.5 of Security
Agreement;
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(xi) a Lessee Estoppel Certificate or other evidence
reasonably satisfactory to the Agent that any such Eligible
Lease is valid and binding; and
(xii) a fully-executed copy of the Servicing
Agreement certified by a Secretary or Assistant Secretary of
the Initial Borrower, and certification of the amount of fees
to be payable to UniCapital, CLA, Cauff Lippman or any
Affiliate in connection with such Servicing Agreement, which
agreement and fees shall be acceptable to the Agent in its
sole reasonable discretion;
(f) at the time of (and after giving effect to) the initial
Loan, no Default or Event of Default specified in Article IX shall have
occurred and be continuing; and
(g) immediately after giving effect to the initial Loan;
(i) the aggregate principal balance of all
outstanding Revolving Loans for each Lender shall not exceed
such Lender's Revolving Credit Commitment;
(ii) the Revolving Credit Outstandings shall not
exceed the lesser of the Borrowing Base or the Total Revolving
Credit Commitment; and
(iii) no Concentration Restriction shall be exceeded
or otherwise violated.
5.3 Conditions of Revolving Loans. The obligations of the
Lenders to make any Revolving Loans hereunder on or subsequent to the Closing
Date are subject to the satisfaction of the following conditions:
(a) the Agent shall have received (1) a Borrowing Notice if
required by Article II and (2) a certificate of an Authorized
Representative containing computations of the Borrowing Base,
demonstrating compliance with the Concentration Restrictions and
providing information about the Financed Aircraft, in each case after
giving effect to such Loan and any related Financed Aircraft;
(b) the representations and warranties of the Credit Parties
set forth in Article VI, in Section 3.6(g) of the Security Agreement
with respect to the Eligible Lease of the Financed Aircraft being
financed on such borrowing date, and elsewhere in the Loan Documents
shall be true and correct in all material respects on and as of the
date of such Loan, with the same effect as though such representations
and warranties had been made on and as of such date, except to the
extent that such representations and warranties expressly relate to an
earlier date and except that (from the date that financial statements
are delivered to the Agent and the Lenders pursuant to Section 7.1) the
representation and warranty contained in Section 6.6(a) shall be deemed
to be a representation and warranty that the financial statements of
the Borrowers and their respective Subsidiaries most recently delivered
to the Agent and the Lender pursuant to Section 7.1 present fairly the
financial condition of such Borrowers and Subsidiaries as of the period
reported therein, all in conformity with GAAP applied on a Consistent
Basis;
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52
(c) at the time of the initial Loan to any Borrowing
Affiliate, such Borrowing Affiliate (including the Borrower with
respect to such Loan) shall have executed and delivered to the Agent an
Assumption Letter, and each of the Borrowers and the Agent shall have
executed each such Assumption Letter;
(d) at the time of the initial Loan to any Borrowing
Affiliate, such Borrowing Affiliate shall have delivered to the Agent
(i) Facility Guaranties fully executed by each Beneficial Owner of such
Borrowing Affiliate, by each Subsidiary of any such Beneficial Owner
(other than such Borrowing Affiliate), by each Subsidiary of such
Borrowing Affiliate and by each Applicable Intermediary (if any); (ii)
Pledge Agreements fully executed by the appropriate pledgors, granting
a security interest in all Pledged Interests with respect to each such
Beneficial Owner, such Borrowing Affiliate, each Subsidiary of any such
Beneficial Owner, each Subsidiary of such Borrowing Affiliate, and each
Applicable Intermediary (if any); (iii) Security Agreements fully
executed by such Borrowing Affiliate, each Beneficial Owner of such
Borrowing Affiliate, each Subsidiary of any such Beneficial Owner, each
Subsidiary of each such Borrowing Affiliate, and each Applicable
Intermediary (if any); and (iv) Collateral Assignments with respect to
any Eligible Lease fully executed by such Borrowing Affiliate, each
Applicable Intermediary (if any) and each Applicable Carrier;
(e) at the time of the initial Loan to any Borrowing
Affiliate, such Borrowing Affiliate (including the Borrower with
respect to such Loan) shall have delivered to the Agent all other
agreements, instruments and documents required by each such Assumption
Letter;
(f) without limiting the generality of the foregoing, the
Agent shall have received on or prior to the date of such advance, each
of the documents and instruments required by Section 5.2 as if such
Borrowing Affiliate had been a Borrower at the time of the initial
Loan, and as if each Financed Aircraft financed by such Loan had been
financed by the initial Loan; and
(g) at the time of (and after giving effect to) each Loan, no
Default or Event of Default specified in Article IX shall have occurred
and be continuing; and
(h) immediately after giving effect to a Revolving Loan:
(i) the aggregate principal balance of all
outstanding Revolving Loans for each Lender shall not exceed
such Lender's Revolving Credit Commitment;
(ii) the Revolving Credit Outstandings shall
not exceed the lesser of the Borrowing Base or the Total
Revolving Credit Commitment; and
(iii) no Concentration Restriction shall be
exceeded or otherwise violated; and
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(iv) the Weighted Average Lease Factor of all Leases
of Financed Aircraft (excluding the Sabena Portfolio so long
as the Weighted Average Lease Factor of the Financed Aircraft
in the Sabena Portfolio is at least 1.00 to 100) shall be at
least equal to 1.05 to 100, determined as of the date such
Loan is made.
5.4 Appraisal Procedure. In order to determine the Fair Market
Value of any Financed Aircraft at the time of any Loan hereunder with respect to
such Aircraft, the Applicable Borrower and the Agent shall follow the following
procedure (an "Appraisal Procedure"): Prior to the date of such Loan, the
Applicable Borrower shall deliver to the Agent three (3) Qualified Appraisals of
such Aircraft, each prepared by a separate Qualified Appraiser and dated as of a
date reasonably close to the date of such Loan, and each opining as to the Fair
Market Value of such Aircraft. If all three Qualified Appraisals state the same
Fair Market Value, then such value shall be deemed to be the Fair Market Value
of such Aircraft at the time of such Loan; and, for the purposes of this
Agreement, the latest of such appraisals stating the same value shall be
referred to as the "Original Qualified Appraisal" for such Aircraft. If the
three Qualified Appraisals do not state the same Fair Market Value, then the
lower of (a) the arithmetic mean of the Fair Market Values in the three (3)
Qualified Appraisals and (b) the median value of the Fair Market Values in the
three (3) Qualified Appraisals shall be deemed to be the Fair Market Value of
such Aircraft at the time of such Loan; and the Qualified Appraisal stating such
value (or, if such value is based on the arithmetic mean of such Qualified
Appraisals, the latest such Qualified Appraisal having a value not exceeding
such value and which shall be deemed to state such arithmetic mean value) shall
be referred to as the "Original Qualified Appraisal" for such Aircraft.
ARTICLE VI
Representations and Warranties
Each Borrower represents and warrants with respect to itself, its
Subsidiaries (if any) and each other Credit Party (which representations and
warranties shall survive the delivery of the documents mentioned herein and the
making of Loans), that:
6.1 Organization and Authority.
(a) Each Borrower, each Subsidiary, each other Credit Party
and UniCapital is a trust, corporation, partnership or limited
liability company duly organized and validly existing under the laws of
the jurisdiction of its formation;
(b) Each Borrower, each Subsidiary, each other Credit Party
and UniCapital (x) has the requisite power and authority to own its
properties and assets and to carry on its business as now being
conducted and as contemplated in the Loan Documents, and (y) is
qualified to do business in every jurisdiction in which failure so to
qualify would have a Material Adverse Effect;
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(c) Each Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) Each Credit Party (other than the Borrowers) and
UniCapital has the power and authority to execute, deliver and perform
each of the Loan Documents to which it is a party; and
(e) When executed and delivered, each of the Loan Documents to
which any Credit Party or UniCapital is a party will be the legal,
valid and binding obligation or agreement, as the case may be, of such
Credit Party or UniCapital (as the case may be), enforceable against
such Credit Party or UniCapital (as the case may be) in accordance with
its terms, subject to the effect of any applicable bankruptcy,
moratorium, insolvency, reorganization or other similar law 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);
6.2 Loan Documents. The execution, delivery and performance by
each Credit Party and UniCapital of each of the Loan Documents to which it is a
party:
(a) have been duly authorized by all requisite Organizational
Action of such Credit Party or UniCapital (as the case may be) required
for the lawful execution, delivery and performance thereof;
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority
binding on such Credit Party or UniCapital or their respective
properties, or (iii) the Organizational Documents or Operating
Documents of such Credit Party or UniCapital;
(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time or both, would constitute an event of default,
under any contract, indenture, agreement or other instrument or
document to which such Credit Party or UniCapital is a party, or by
which the properties or assets of such Credit Party or UniCapital are
bound; and
(d) does not and will not result in the creation or imposition
of any Lien upon any of the properties or assets of such Credit Party
or UniCapital or any Subsidiary except any Liens in favor of the Agent
and the Lenders created by the Security Instruments;
6.3 Solvency. At the time of each Loan to a Borrower, such
Borrower and each Beneficial Owner of such Borrower and each Eligible
Intermediary, if any, is Solvent after giving effect to the transactions
contemplated by the Loan Documents;
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6.4 Subsidiaries and Stockholders. No Borrower or Guarantor
has any Subsidiaries, except that a Guarantor may have a beneficial interest in
a Borrower, and a Borrower may own an Eligible Intermediary;
6.5 Ownership Interests. No Borrower or Guarantor owns any
interest in any Person, except that a Guarantor may have a beneficial interest
in a Borrower, and a Borrower may own an Eligible Intermediary;
6.6 Financial Condition.
(a) The Initial Borrower has heretofore furnished to each
Lender (x) a copy of the UniCapital Registration Statement which
contains (i) the unaudited pro forma combined balance sheet and related
statement of operations for UniCapital, Cauff Lippman and certain
affiliates thereof, NSJ and certain of their Affiliates for the year
ended December 31, 1997, (ii) the audited balance sheet of UniCapital
at December 31, 1997, (iii) the audited combined balance sheet and
related statements of income, changes in equity and cash flows for
Cauff Lippman and certain affiliates thereof for the year ended
December 31, 1997, and (iv) the audited combined balance sheet and
related statements of operations, stockholders' equity and cash flows
for NSJ for the year ended December 31, 1997, and (y) the unaudited
balance sheet of UniCapital at June 30, 1998. Such balance sheets,
statements of operations and income and other financial statements
(including the notes thereto) present fairly the financial condition of
UniCapital, Cauff Lippman and NSJ as of the period reported therein,
all in conformity with GAAP;
(b) since June 30, 1998 there has been no material adverse
change in the (1) the business, properties, prospects, operations or
condition, financial or otherwise, of NSJ and its Subsidiaries, taken
as a whole, Cauff Lippman and its Subsidiaries, taken as a whole, or of
the Borrowers and their respective Subsidiaries (if any), taken as a
whole, (2) the ability of any Credit Party to pay or perform its
respective obligations, liabilities and indebtedness under the Loan
Documents as such payment or performance becomes due in accordance with
the terms thereof, or (3) the rights, powers and remedies of the Agent
or any Lender under any Loan Document or the validity, legality or
enforceability thereof; and
(c) except as set forth in the financial statements referred
to in Section 6.6(a) or permitted by Section 8.5, neither any Borrower
nor any Beneficial Owner or any Subsidiary has incurred, other than in
the ordinary course of business, any material Indebtedness, Contingent
Obligation or other commitment or liability which remains outstanding
or unsatisfied.
6.7 Title to Properties. (a) Each Borrower and each of its
Subsidiaries and each other Credit Party has good and marketable title to all
its real and personal properties, subject to no transfer restrictions or Liens
of any kind, except for the transfer restrictions and Liens described in
Schedule 6.7 and Permitted Liens; and
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(b) each Non-SPE Credit Party has good and marketable title to
all Collateral under the Security Instruments to which it is a party,
subject to no transfer restrictions or Liens of any kind, except for
the transfer restrictions and Liens described in Schedule 6.7 and
Permitted Liens;
6.8 Taxes. Except as set forth in Schedule 6.8, each Borrower,
each of its Subsidiaries and each Credit Party (other than Non-SPE Credit
Parties) has filed or caused to be filed all federal, state and local tax
returns (and each Non-SPE Credit Party has filed or caused to be filed all
federal and state income tax returns and all other material federal, state and
local tax returns) in each case which are required to be filed by it and, except
for taxes and assessments being contested in good faith by appropriate
proceedings diligently conducted and against which reserves reflected in the
financial statements described in Section 6.6(a) (or the financial statements
most recently delivered pursuant to Section 7.1(a)) and satisfactory to the
Borrowers' independent certified public accountants have been established, have
paid or caused to be paid all taxes as shown on said returns or on any
assessment received by it, to the extent that such taxes have become due;
6.9 Other Agreements. No Credit Party nor any Subsidiary is
(i) a party to or subject to any judgment, order,
decree, agreement, lease or instrument, or subject to other
restrictions, which individually or in the aggregate could reasonably
be expected to have a Material Adverse Effect; or
(ii) in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which such Credit Party or
any Subsidiary is a party, which default has, or if not remedied within
any applicable grace period could reasonably be likely to have, a
Material Adverse Effect;
6.10 Litigation. Except as set forth in Schedule 6.10, there
is no action, suit, investigation or proceeding at law or in equity or by or
before any governmental instrumentality or agency or arbitral body pending, or,
to the knowledge of any Borrower, threatened by or against any Borrower or any
Subsidiary or other Credit Party or affecting any Borrower or any Subsidiary or
other Credit Party or any properties or rights of any Borrower or any Subsidiary
or other Credit Party, which could reasonably be likely to have a Material
Adverse Effect;
6.11 Margin Stock. The proceeds of the borrowings made
hereunder will be used by the Borrowers only for the purposes expressly
authorized herein. None of such proceeds will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute any of the
Loans under this Agreement a "purpose credit" within the meaning of said
Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither any
Borrower nor any agent acting in its behalf has taken or will take any action
which might cause this Agreement or any of the documents or instruments
delivered pursuant hereto to violate any regulation of the Board or to violate
the
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57
Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as
amended, or any state securities laws, in each case as in effect on the date
hereof;
6.12 Investment Company. No Credit Party is an "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (15 U.S.C. Section 80a-1, et seq.). The
application of the proceeds of the Loans and repayment thereof by each Borrower
and the performance by each Borrower and the other Credit Parties of the
transactions contemplated by the Loan Documents will not violate any provision
of said Act, or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder, in each case as in effect on the date hereof;
6.13 Patents, Etc. Each Borrower and each other Credit Party
(other than a Non-SPE Credit Party) owns or has the right to use, under valid
license agreements or otherwise, all material patents, licenses, franchises,
trademarks, trademark rights, trade names, trade name rights, trade secrets and
copyrights necessary to or used in the conduct of its businesses as now
conducted and as contemplated by the Loan Documents, without known conflict with
any patent, license, franchise, trademark, trade secret, trade name, copyright,
other proprietary right of any other Person;
6.14 No Untrue Statement. Neither (a) this Agreement nor any
other Loan Document or certificate or document executed and delivered by or on
behalf of any Borrower or any other Credit Party in accordance with or pursuant
to any Loan Document nor (b) any statement, representation, or warranty provided
to the Agent in connection with the negotiation or preparation of the Loan
Documents contains any misrepresentation or untrue statement of material fact or
omits to state a material fact necessary, in light of the circumstance under
which it was made, in order to make any such warranty, representation or
statement contained therein not misleading;
6.15 No Consents, Etc. Neither the respective businesses or
properties of the Credit Parties or any Subsidiary, nor any relationship among
the Credit Parties or any Subsidiary and any other Person, nor any circumstance
in connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of any Credit Party as a
condition to the execution, delivery and performance of, or consummation of the
transactions contemplated by the Loan Documents, which, if not obtained or
effected, would be reasonably likely to have a Material Adverse Effect, or if
so, such consent, approval, authorization, filing, registration or qualification
has been duly obtained or effected, as the case may be;
6.16 Employee Benefit Plans. (a) Neither any Guarantor nor
any Borrower or any of their respective Subsidiaries has or has ever had any
Employee Benefit Plan, any Multiemployer Plan or any Pension Plan, or any
obligation to fund any such plan;
(b) Each Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and published
interpretations thereunder and in
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compliance with all Foreign Benefit Laws with respect to all Employee Benefit
Plans except for any required amendments for which the remedial amendment period
as defined in Section 401(b) of the Code has not yet expired. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of the Code
has been determined by the Internal Revenue Service to be so qualified, and each
trust related to such plan has been determined to be exempt under Section 501(a)
of the Code. No material liability has been incurred by any Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties with
respect to any Employee Benefit Plan or any Multiemployer Plan;
(c) Neither any Borrower nor any ERISA Affiliate has (i)
engaged in a nonexempt prohibited transaction described in Section 4975 of the
Code or Section 406 of ERISA affecting any of the Employee Benefit Plans or the
trusts created thereunder which could subject any such Employee Benefit Plan or
trust to a material tax or penalty on prohibited transactions imposed under
Internal Revenue Code Section 4975 or ERISA, (ii) incurred any accumulated
funding deficiency with respect to any Employee Benefit Plan, whether or not
waived, or any other liability to the PBGC which remains outstanding other than
the payment of premiums and there are no premium payments which are due and
unpaid, (iii) failed to make a required contribution or payment to a
Multiemployer Plan, or (iv) failed to make a required installment or other
required payment under Section 412 of the Code, Section 302 of ERISA or the
terms of such Employee Benefit Plan;
(d) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer Plan, and
neither any Borrower nor any ERISA Affiliate has incurred any unpaid withdrawal
liability with respect to any Multiemployer Plan;
(e) The present value of all vested accrued benefits under
each Employee Benefit Plan which is subject to Title IV of ERISA, 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 Plan allocable to such benefits;
(f) To the best of each Borrower's knowledge, each Employee
Benefit Plan subject to Title IV of ERISA, maintained by any ERISA Affiliate,
has been administered in accordance with its terms in all material respects and
is in compliance in all material respects with all applicable requirements of
ERISA and other applicable laws, regulations and rules;
(g) The consummation of the Loans provided for herein will not
involve any prohibited transaction under ERISA which is not subject to a
statutory or administrative exemption; and
(h) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of any Borrower after due
inquiry, is threatened concerning or involving any Employee Benefit Plan;
6.17 No Default. As of the date hereof, there does not exist
any Default or Event of Default hereunder;
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6.18 Environmental Laws. Except as listed on Schedule 6.18,
each Borrower, each Guarantor and each Subsidiary is in compliance with all
applicable Environmental Laws and has been issued and currently maintains all
required federal, state and local permits, licenses, certificates and approvals.
Except as listed on Schedule 6.18, neither any Borrower, any Guarantor nor any
Subsidiary has been notified of any pending or threatened action, suit,
proceeding or investigation, and neither any Borrower, any Guarantor nor any
Subsidiary is aware of any facts, which (a) calls into question, or could
reasonably be expected to call into question, compliance by any Borrower, any
Guarantor or any Subsidiary with any Environmental Laws, (b) seeks, or could
reasonably be expected to form the basis of a meritorious proceeding, to
suspend, revoke or terminate any license, permit or approval necessary for the
operation of any Borrower's, any Guarantor's or any Subsidiary's business or
facilities or for the generation, handling, storage, treatment or disposal of
any Hazardous Materials, or (c) seeks to cause, or could reasonably be expected
to form the basis of a meritorious proceeding to cause, any property of any
Borrower, any Guarantor or any Subsidiary or other Credit Party to be subject to
any restrictions on ownership, use, occupancy or transferability under any
Environmental Law;
6.19 Employment Matters. No Borrower or Guarantor has or has
ever had any employee other than officers thereof; and
6.20 RICO. Neither any Borrower nor any Subsidiary is engaged
in or has engaged in any course of conduct that could subject any of their
respective properties to any Lien, seizure or other forfeiture under any
criminal law, racketeer influenced and corrupt organizations law, civil or
criminal, or other similar laws; and
6.21 Liens. Subject to the proviso to clause (f) of the
definition of "Eligible Aircraft" in Section 1.1, the Agent (for itself and on
behalf of the Lenders) has a first priority perfected Lien (subject to Permitted
Liens) on all Financed Aircraft and all other Collateral under the Security
Instruments.
ARTICLE VII
Affirmative Covenants
Until the Facility Termination Date, unless the Required
Lenders shall otherwise consent in writing, each Borrower will, and where
applicable will cause each Guarantor and each Subsidiary (if any) to:
7.1 Financial Reports, Etc. (a) As soon as practical and in
any event within 90 days after the end of each Fiscal Year, deliver or cause to
be delivered to the Agent and each Lender (i) audited consolidated balance
sheets of UniCapital and its Subsidiaries as at the end of such Fiscal Year, and
the notes thereto (if any), and the related audited consolidated statements of
income,changes in stockholders' equity and cash flows, and the respective notes
thereto (if any), for such Fiscal Year, setting forth comparative financial
statements for the preceding year, reported on by PriceWaterhouse Coopers or
other independent certified public accountants of nationally recognized
standing, together with the unaudited consolidating income statements
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relating to such audited income statements, all prepared in accordance with GAAP
applied on a Consistent Basis, and in the case of unaudited consolidating
statements accompanied by a certificate of an Authorized Representative to the
effect that such financial statements present fairly the financial position of
UniCapital and its Subsidiaries as of the end of such Fiscal Year and the
results of their operations for such Fiscal Year, (ii) consolidated balance
sheets of the Borrowers and their respective Subsidiaries as at the end of such
Fiscal Year, and the notes thereto (if any), and the related consolidated
statements of income and the respective notes thereto (if any), for such Fiscal
Year, accompanied by a certificate of an Authorized Representative to the effect
that such financial statements present fairly the financial position of the
Borrowers and their respective Subsidiaries as of the end of such Fiscal Year
and the results of their operations for such Fiscal Year and (iii) a certificate
of an Authorized Representative demonstrating compliance with Section 8.1 and
the Concentration Restrictions, and providing information about the Financed
Aircraft, which certificate shall be in the form of Exhibit H;
(b) as soon as practical and in any event within 60 days after
the end of each fiscal quarter (except the last fiscal quarter of the Fiscal
Year), deliver to the Agent and each Lender (i) consolidated and consolidating
income statements of UniCapital and its Subsidiaries and consolidated income
statements of the Borrowers and their respective Subsidiaries for such fiscal
quarter and for the period from the beginning of the then current Fiscal Year
through the end of such reporting period, all prepared in accordance with GAAP
applied on a Consistent Basis and accompanied by a certificate of an Authorized
Representative to the effect that such financial statements present fairly the
financial position of UniCapital and its Subsidiaries and of the Borrowers and
their respective Subsidiaries as of the end of such fiscal period and the
results of their operations for such fiscal period, and (ii) a certificate of an
Authorized Representative containing computations for such quarter comparable to
that required pursuant to Section 7.1(a)(iii);
(c) together with each delivery of the financial statements
required by Section 7.1(a)(i), deliver to the Agent and each Lender a letter
from the independent certified accountants of UniCapital stating that in
performing the audit necessary to render an opinion on the financial statements
of UniCapital for such Fiscal Year, they obtained no knowledge of any Default or
Event of Default by any Borrower in the fulfillment of the terms and provisions
of this Agreement insofar as they relate to financial covenants (which at the
date of such statement remains uncured); or if the accountants have obtained
knowledge of such Default or Event of Default, a statement specifying the nature
and period of existence thereof;
(d) as soon as practical and in any event within 30 days after
the end of each calendar month, deliver or cause to be delivered to the Agent
and each Lender a certificate of an Authorized Representative containing
computations of the Borrowing Base, demonstrating compliance with the
Concentration Restrictions, providing information about the Financed Aircraft,
and stating that each Borrower is in compliance with the covenants and terms
hereof and that no Event of Default has occurred and is continuing, in each case
as of the end of such month, which certificate shall be in the form of Exhibit
S;
(e) promptly upon their becoming available to any Borrower,
such Borrower shall deliver to the Agent and each Lender a copy of (i) all
regular or special reports or effective
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registration statements which any Borrower, any Guarantor or any Subsidiary
shall file with the Securities and Exchange Commission (or any successor
thereto) or any securities exchange, (ii) any proxy statement distributed by any
Borrower, any Guarantor or any Subsidiary to its shareholders, bondholders or
the financial community in general, and (iii) any management letter or other
report submitted to any Borrower, any Guarantor or any Subsidiary by independent
accountants in connection with any annual, interim or special audit of any
Borrower or any Subsidiary; and
(f) promptly, from time to time, deliver or cause to be
delivered to the Agent and each Lender such other information regarding any
Borrower's, any Guarantor's and any Subsidiary's operations, business affairs
and financial condition as the Agent or such Lender may reasonably request.
Subject to Section 11.15, the Agent and the Lenders are hereby
authorized to deliver a copy of any such financial or other information
delivered hereunder to the Lenders (or any affiliate of any Lender) or to the
Agent, to any Governmental Authority having jurisdiction over the Agent or any
of the Lenders pursuant to any written request therefor or in the ordinary
course of examination of loan files, or to any other Person who shall acquire or
consider the assignment of, or acquisition of any participation interest in, any
Obligation permitted by this Agreement;
7.2 Maintain Properties. Maintain or cause each Applicable
Carrier to maintain and make repairs to each Financed Aircraft in compliance
with the requirements set forth in Schedule 7.2 hereto; and each Borrower,
Guarantor and Subsidiary shall maintain all other properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such other properties, and maintain free from Liens
all trademarks, trade names, patents, copyrights, trade secrets, know-how, and
other intellectual property and proprietary information (or adequate licenses
thereto), in each case as are reasonably necessary to conduct its business as
currently conducted or as contemplated hereby, all in accordance with customary
and prudent business practices;
7.3 Existence, Qualification, Etc. Except as otherwise
expressly permitted under Section 8.8, do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and all
material rights and franchises, and maintain its license or qualification to do
business as a foreign corporation and good standing in each jurisdiction in
which its ownership or lease of property or the nature of its business makes
such license or qualification necessary;
7.4 Regulations and Taxes. Comply in all material respects
with or contest in good faith all statutes and governmental regulations and pay
all taxes, assessments, governmental charges, claims for labor, supplies, rent
and any other obligation which, if unpaid, would become a Lien other than a
Permitted Lien against any of its properties;
7.5 Insurance. Maintain or cause to be maintained with
respect to each Financed Aircraft and all other Collateral the insurance
described on Exhibit M;
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7.6 True Books. Keep true books of record and account in which
full, true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by GAAP
with respect to doubtful accounts and all taxes, assessments, charges, levies
and claims and with respect to its business in general, and include such
reserves in interim as well as year-end financial statements;
7.7 Right of Inspection. Permit any Person designated by any
Lender or the Agent to visit and inspect any Aircraft, or any other property,
corporate book or financial report of any Borrower or any Subsidiary and to
discuss its affairs, finances and accounts with its principal officers and
independent certified public accountants; and cause each Eligible Carrier to
permit any Person designated by any Lender or any Agent to inspect any Financed
Aircraft, all at reasonable times, at reasonable intervals and with reasonable
prior notice, subject to any restriction on inspection contained in an Eligible
Lease with respect to such Financed Aircraft, provided that notwithstanding any
such Lease, (a) any Person designated by a Lender or the Agent may inspect such
Financed Aircraft at any reasonable time upon an event of default under such
Lease, and (b) upon any Event of Default, the Applicable Borrower will use its
best efforts to cause the Applicable Carrier (and any other Person) to permit
any Person designated by a Lender or the Agent to inspect such Financed Aircraft
at any time;
7.8 Observe all Laws. Conform to and duly observe in all
material respects all laws, rules and regulations and all other valid
requirements of any Governmental Authority with respect to the conduct of its
business;
7.9 Governmental Licenses. Obtain and maintain all licenses,
permits, certifications and approvals of all applicable Governmental Authorities
as are required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents;
7.10 Covenants Extending to Other Persons. Cause each
Guarantor and each of their respective Subsidiaries (if any) to do with respect
to itself, its business and its assets, each of the things required of any
Borrower in Sections 7.2 through 7.9, and 7.18 inclusive;
7.11 Officer's Knowledge of Default. Upon any officer of any
Guarantor or any Borrower obtaining knowledge of any Default or Event of Default
hereunder or under any other obligation of any Borrower or any Subsidiary or
other Credit Party to any Lender, or any event, development or occurrence which
could reasonably be expected to have a Material Adverse Effect, cause such
officer or an Authorized Representative to promptly notify the Agent of the
nature thereof, the period of existence thereof, and what action such Borrower
or such Subsidiary or other Credit Party proposes to take with respect thereto;
7.12 Suits or Other Proceedings. Upon any officer of any
Guarantor or any Borrower obtaining knowledge of any action, suit, litigation,
investigation, or other proceeding being instituted or threatened against any
Borrower or any Subsidiary or other Credit Party, in any court or before any
Governmental Authority, or any attachment, levy, execution or other process
being instituted against any assets of any Borrower or any Subsidiary or other
Credit Party, making a claim or claims in an aggregate amount greater than
$100,000 (or, in the case of a Non-SPE Credit Party, greater than $2,000,000),
in each case exclusive of punitive damages,
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not otherwise covered by insurance or that would otherwise be reasonably
expected to have a Material Adverse Effect, promptly deliver to the Agent
written notice thereof stating the nature and status of such action, suit,
litigation, investigation, dispute, proceeding, levy, execution or other
process;
7.13 Notice of Environmental Complaint or Condition. Promptly
provide to the Agent true, accurate and complete copies of any and all notices,
complaints, orders, directives, claims or citations received by any Borrower,
any Guarantor or any Subsidiary relating to any (a) violation or alleged
violation by any Borrower, any Guarantor or any Subsidiary of any applicable
Environmental Law; (b) release or threatened release by any Borrower, any
Guarantor or any Subsidiary, or by any Person handling, transporting or
disposing of any Hazardous Material on behalf of any Borrower, any Guarantor or
any Subsidiary, or at any facility or property owned or leased or operated by
any Borrower, any Guarantor or any Subsidiary, of any Hazardous Material, except
where occurring legally pursuant to a permit or license; or (c) liability or
alleged liability of any Borrower, any Guarantor or any Subsidiary for the costs
of cleaning up, removing, remediating or responding to a release of Hazardous
Materials;
7.14 Environmental Compliance. If any Borrower, any Guarantor
or any Subsidiary shall receive any letter, notice, complaint, order, directive,
claim or citation alleging that any Borrower, any Guarantor or any Subsidiary
has violated any Environmental Law, has released any Hazardous Material, or is
liable for the costs of cleaning up, removing, remediating or responding to a
release of Hazardous Materials, any Borrower, any Guarantor and any Subsidiary
shall, within the time period permitted and to the extent required by the
applicable Environmental Law or the Governmental Authority responsible for
enforcing such Environmental Law, remove or remedy, or cause the applicable
Subsidiary to remove or remedy, such violation or release or satisfy such
liability;
7.15 Indemnification. Without limiting the generality of
Section 11.9, UniCapital and each Borrower hereby agrees jointly and severally
to indemnify and hold the Agent and the Lenders, and their respective officers,
directors, employees and agents, harmless from and against any and all claims,
losses, penalties, liabilities, damages and expenses (including assessment and
cleanup costs and reasonable attorneys', consultants' or other expert fees,
expenses and disbursements) arising directly or indirectly from, out of or by
reason of (a) the violation of any Environmental Law by any Borrower or any
Subsidiary or with respect to any property owned, operated or leased by any
Borrower or any Subsidiary or (b) the handling, storage, transportation,
treatment, emission, release, discharge or disposal of any Hazardous Materials
by or on behalf of any Borrower or any Subsidiary, or on or with respect to
property owned or leased or operated by any Borrower or any Subsidiary. The
provisions of this Section 7.15 shall survive repayment of the Obligations and
expiration or termination of this Agreement;
7.16 Further Assurances. At the Borrowers' cost and expense,
upon request of the Agent, duly execute and deliver or cause to be duly executed
and delivered, to the Agent such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the
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reasonable opinion of the Agent to carry out more effectively the provisions and
purposes of this Agreement, the Security Instruments and the other Loan
Documents;
7.17 Swap Agreements. The Borrowers shall maintain Swap
Agreements in an amount mutually agreed to by the Agent and the Borrowers;
7.18 Continued Operations. Subject to Section 8.16, continue
at all times to conduct its business and engage principally in the same line or
lines of business substantially as heretofore conducted;
7.19 Semi-Annual Appraisal of Aircraft and Leases. On or
within 30 days prior to each half-year anniversary of each Loan with respect to
a Financed Aircraft, deliver or cause to be delivered to the Agent and each
Lender three separate Qualified Appraisals, dated no earlier than 30 days prior
to the date of delivery, of each Financed Aircraft. Such appraisals shall be
conducted every 6 months unless (on or within 30 days prior to each date that is
an even multiple of six months from the date of Loan with respect to such
Financed Aircraft), in the Agent's sole discretion, it becomes advisable to have
such appraisals conducted every 3 months, in which case the Agent shall notify
Borrower of same and the Agent shall pay the cost of the additional appraisals.)
If all three Qualified Appraisals state the same Fair Market Value, then such
value shall be deemed to be the Fair Market Value of such Aircraft. If the three
Qualified Appraisals do not state the same Fair Market Value, then the lower of
(a) the arithmetic mean of the Fair Market Values in the three (3) Qualified
Appraisals and (b) the median value of the Fair Market Values in the three (3)
Qualified Appraisals shall be deemed to be the Fair Market Value of such
Aircraft at the time of such Loan.
7.20 Semi-Annual Review of Rated Carriers and Aircraft Models.
Permit the Agent to conduct, and cooperate with the Agent in conducting, a
semi-annual review of each Rated Carrier and each model of Aircraft listed on
Exhibit L, such review to be conducted during the 30 days prior to April 5 and
October 5 of each year. In the event that the Agent determines, based on an
affirmative statement of Moody's or S&P, that any such Rated Carrier or Aircraft
model is no longer acceptable for the purposes of this Agreement, the Agent may
amend Exhibit K or Exhibit L (as the case may be) to remove such Rated Carrier
or Aircraft model from the respective Exhibit. Thereafter, any Rated Carrier or
Aircraft model removed from such a list shall cease to qualify as a Rated
Carrier or model of Eligible Aircraft, and the Borrowing Base and Eligible
Aircraft Borrowing Bases shall be reduced accordingly. In the event that the
Agent reasonably determines that any carrier should be added as a Rated Carrier
or that any Aircraft model should be added to the list of permitted equipment,
the Agent may amend Exhibit K or Exhibit L (as the case may be) to add such
carrier or model of Aircraft to the respective Exhibit. Thereafter, any carrier
Aircraft added or moved to such a list shall qualify as a Rated Carrier or
Eligible Aircraft, and the Borrowing Base and Eligible Aircraft Borrowing Bases
shall be modified accordingly. The Borrowers may from time to time request a
review of Rated Carriers or Aircraft types and seek the consent of the Agent to
the modification of Exhibits K or L (as the case may be) to add or move carriers
or Aircraft types, which consent the Agent may withhold in its sole discretion.
Adjustments of the Borrowing Base pursuant to this Section 7.20 shall be
applicable to any advance of Loans subsequent to such adjustment but shall not
be applied to require a prepayment of Loans under Section 2.3(b)(ii).
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7.21 Maintenance of Aircraft; Other Covenants and
Restrictions; Non-Discrimination.
(a) Ensure that any Lease with respect to any Financed
Aircraft contains covenants and restrictions regarding the maintenance,
alteration, replacement, pooling, sublease and (in the case of a Lease) return
of such Aircraft by the Applicable Carrier, which covenants and restrictions
satisfy the requirements of Schedule 7.21(a) hereto;
(b) Promptly and diligently take or cause to be taken all
steps which a prudent international aircraft lessor or financier would
reasonably take in light of all of the relevant circumstances to compel the
relevant Eligible Carrier to comply with the terms of any Lease, or, if
applicable and the Applicable Borrower is entitled to do so, to repossess the
applicable Financed Aircraft (and, if a prudent international aircraft lessor or
financier would determine it necessary or desirable, to de-register and export
the same to a safe location) if any failure to comply with such Lease is not
promptly remedied.
7.22 Re-registration of Aircraft. Ensure that any Lease with
respect to any Aircraft contain covenants and restrictions regarding
re-registration of such Aircraft, which covenants and restrictions satisfy the
requirements of the Security Agreement.
7.23 Servicer. Ensure that the Servicer continues to serve in
compliance with the Servicing Agreement.
7.24 Employee Benefit Plans.
(a) (Without limiting the generality of Section 8.10(a)) with
reasonable promptness, and in any event within thirty (30) days
thereof, give notice to the Agent of (a) the establishment of any new
Pension Plan (which notice shall include a copy of such plan), (b) the
commencement of contributions to any Employee Benefit Plan to which any
Borrower or any of its ERISA Affiliates was not previously
contributing, (c) any material increase in the benefits of any existing
Employee Benefit Plan, (d) each funding waiver request filed with
respect to any Employee Benefit Plan and all communications received or
sent by any Borrower or any ERISA Affiliate with respect to such
request and (e) the failure of any Borrower or any ERISA Affiliate to
make a required installment or payment under Section 302 of ERISA or
Section 412 of the Code by the due date;
(b) (Without limiting the generality of Section 8.10(a))
promptly and in any event within fifteen (15) days of becoming aware of
the occurrence or forthcoming occurrence of any (a) Termination Event
or (b) nonexempt "prohibited transaction," as such term is defined in
Section 406 of ERISA or Section 4975 of the Code, in connection with
any Pension Plan or any trust created thereunder, deliver to the Agent
a notice specifying the nature thereof, what action any Borrower or any
ERISA Affiliate has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect
thereto; and
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(c) (Without limiting the generality of Section 8.10(a)) with
reasonable promptness but in any event within fifteen (15) days for
purposes of clauses (a), (b) and (c), deliver to the Agent copies of
(a) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under
Section 401(a) of the Code, (b) all notices received by any Borrower or
any ERISA Affiliate of the PBGC's intent to terminate any Pension Plan
or to have a trustee appointed to administer any Pension Plan, (c) each
Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by any Borrower or any ERISA Affiliate with the Internal
Revenue Service with respect to each Pension Plan and (d) all notices
received by any Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA. Each Borrower will notify
the Agent in writing within five (5) Business Days of such Borrower or
any ERISA Affiliate obtaining knowledge or reason to know that such
Borrower or any ERISA Affiliate has filed or intends to file a notice
of intent to terminate any Pension Plan under a distress termination
within the meaning of Section 4041(c) of ERISA.
7.25 Collection Accounts. The Borrowers shall establish the
Collection Account and the Cash Collateral Account as provided in the Lockbox
Agreement. Each Borrower shall immediately deposit in the Collection Account as
provided in the Lockbox Agreement all proceeds (including without limitation
rent) from any Lease of any Financed Aircraft.
ARTICLE VIII
Negative Covenants
Until the Obligations have been paid and satisfied in full and
this Agreement has been terminated in accordance with the terms hereof, unless
the Required Lenders shall otherwise consent in writing, no Borrower will, nor
will it permit any Guarantor or any Subsidiary (if any) to:
8.1 EBITDA-to-Interest Ratio. Permit the Consolidated
EBITDA-to-Interest Ratio for the Borrowers and their respective Subsidiaries
(other than any Borrower that acquired its Eligible Aircraft during such
Quarterly Period) as of the end of any Quarterly Period to be less than 1.75 to
1.00;
8.2 Acquisitions. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, except for Acquisition of a Subsidiary as
permitted by Section 8.7;
8.3 Capital Expenditures. Make or become committed to make
any Capital Expenditures, except for Capital Expenditures to maintain or
purchase Eligible Aircraft;
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8.4 Liens. Incur, create or permit to exist any Lien, charge
or other encumbrance of any nature whatsoever with respect to (a) any property
or assets now owned or hereafter acquired by any Borrower, any Guarantor or any
Subsidiary or (b) any Financed Aircraft, other than
(i) Liens created under the Security Instruments in
favor of the Agent and the Lenders; and Liens arising under the
Eligible Leases in favor of the Applicable Intermediary (as lessor) or
the Applicable Borrower which Liens in each case have been assigned to
the Agent;
(ii) Liens set forth in Schedule 6.7;
(iii) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which
are being contested in good faith by appropriate proceedings diligently
conducted, each of which Liens shall be fully bonded over, to the
reasonable satisfaction of the Agent;
(iv) statutory Liens of landlords and Liens of
mechanics, materialmen and other Liens imposed by law or created in the
ordinary course of business and (i) in existence less than 90 days from
the date of creation thereof for amounts not yet due or (ii) which are
being contested in good faith by appropriate proceedings diligently
conducted, which are inferior in respect of the Collateral to the Liens
conferred under the Security Instruments or have been fully bonded over
to the reasonable satisfaction of the Agent, and with respect to which
adequate reserves or other appropriate provisions are being maintained
in accordance with GAAP;
(v) Liens arising out of any judgment or award with
respect to which an appeal or proceeding for review is being prosecuted
in good faith by appropriate proceedings diligently conducted, and with
respect to which a stay of execution is in effect;
(vi) Liens created by the Applicable Carrier under an
Eligible Lease, which Liens are created without the knowledge of the
Applicable Borrower and are released or fully bonded over to the
reasonable satisfaction of the Agent within 30 days after the
Applicable Borrower has notice or knowledge of any such Lien; and
(vii) Liens securing Indebtedness described in
Section 8.5(b).
8.5 Indebtedness. Incur, create, assume or permit to exist any
Indebtedness of any Borrower, any Guarantor or any Subsidiary, howsoever
evidenced, except:
(a) Indebtedness owing to (including guaranties in favor of)
the Agent or any Lender in connection with this Agreement, any Note or
other Loan Document;
(b) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
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(c) Indebtedness arising from Swap Agreements permitted under
Section 7.17; and
(d) unsecured intercompany Indebtedness for loans and advances
made by UniCapital, CLA, Cauff Lippman or NSJ or any Beneficial Owner
to a Borrower or a Guarantor, provided that such intercompany
Indebtedness is evidenced by a promissory note or similar written
instrument acceptable to the Agent which provides that such
Indebtedness is subordinated to obligations, liabilities and
undertakings of the holder or owner thereof under the Loan Documents on
terms acceptable to the Agent.
8.6 Transfer of Assets. Sell, lease, transfer or otherwise
dispose of any assets of any Borrower, any Guarantor or any Subsidiary other
than (a) leases of Aircraft under Eligible Leases or (b) sales of Aircraft, or
sales of the beneficial interest or ownership of a Beneficial Owner or a
Borrower, provided in each case that (i) the net proceeds of such sales are
promptly applied in accordance with Section 2.3(b), and (ii) at the time of any
such sale the requirements of Section 2.13 for release of the respective
Borrower or Guarantor have been satisfied.
8.7 Subsidiaries; Investments. Own, create or permit to exist
any Subsidiary (except that a Guarantor may own beneficial interests in, or
(subject to Section 8.5(d)) make advances to, a Borrower and a Borrower may own
the Applicable Intermediary), or otherwise purchase, own, invest in or otherwise
acquire, directly or indirectly, any stock or other securities, or make or
permit to exist any interest whatsoever in any other Person or permit to exist
any loans or advances to any Person, other than loans referred to in Section
8.5(d);
8.8 Merger or Consolidation. (a) Consolidate with or merge
into any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets without the consent of the Agent,
except as permitted by Section 8.6 and except in the case of a Borrower or
Guarantor that simultaneously terminates its status as a Borrower or Guarantor
hereunder in accordance with Section 2.13.
8.9 Transactions with Affiliates. Other than transactions
permitted under Section 8.8, enter into any transaction after the Closing Date,
including, without limitation, the purchase, sale, lease or exchange of
property, real or personal, or the rendering of any service, with any Affiliate
of any Borrower or of any Guarantor, except (a) that such Persons may render
services to a Borrower, a Guarantor or their Subsidiaries for compensation at
the same rates generally paid by Persons engaged in the same or similar
businesses for the same or similar services, (b) that a Borrower, a Guarantor or
any Subsidiary may render services to such Persons for compensation at the same
rates generally charged by such Borrower, such Guarantor or such Subsidiary, (c)
in either case in the ordinary course of business and pursuant to the reasonable
requirements of a Borrower's (or a Guarantor's or any Subsidiary's) business
consistent with past practice of such Borrower or such Guarantor and its
Subsidiaries and upon fair and reasonable terms no less favorable to such
Borrower (or such Guarantor or any Subsidiary) than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate, and (d)
subject to Section 8.19, the Manager may render the services described in the
Servicing Agreement for the fees set forth therein;
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8.10 Employee Benefit Plans; ERISA Affiliates; Employees.
(a) Have (i) any Employee Benefit Plan, any Multiemployer Plan
or any Pension Plan, or any obligation to fund any such plan, or (ii)
any employee other than officers thereof; or
(b) (without limiting the generality of Section 8.10(a)) with
respect to any Pension Plan, Employee Benefit Plan or Multiemployer
Plan:
(c) permit the occurrence of any Termination Event which would
result in a liability on the part of any Borrower or any ERISA
Affiliate to the PBGC; or
(d) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such
Pension Plans allocable to such benefit liabilities; or
(e) permit any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any
Pension Plan, whether or not waived; or
(f) permit any ERISA Affiliate to fail to make any
contribution or payment to any Multiemployer Plan which such ERISA
Affiliate may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto; or
(g) engage, or permit any Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to Section
502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
(h) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to any Borrower or any ERISA Affiliate or any obligation of
any Borrower to any Multiemployer Plan or increase the obligation of
any ERISA Affiliate to a Multiemployer Plan; or
(i) fail, or permit any Borrower or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code, all applicable Foreign Benefit Laws and all other applicable laws
and the regulations and interpretations thereof;
8.11 Fiscal Year. Change its Fiscal Year, or have any fiscal
year other than the Fiscal Year;
8.12 Dissolution, etc. Wind up, liquidate or dissolve
(voluntarily or involuntarily) or commence or suffer any proceedings seeking any
such winding up, liquidation or dissolution, except in connection with a
transaction permitted pursuant to Section 8.8;
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8.13 Change in Control. Cause, suffer or permit to exist or
occur any Change of Control;
8.14 Negative Pledge Clauses. Enter into or cause, suffer or
permit to exist any agreement with any Person other than the Agent and the
Lenders pursuant to this Agreement or any other Loan Documents which prohibits
or limits the ability of any Borrower or any Subsidiary to create, incur, assume
or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired; provided that any Eligible Lease may
contain such a prohibition or limitation so long as the prohibition or
limitation does not apply to any Lien granted in favor of the Agent or any
Lender pursuant to the Loan Documents;
8.15 Partnerships. Become a general partner in any general
or limited partnership;
8.16 Business and Operations. Engage in any business or
operations other than the ownership, financing and leasing of Aircraft or the
ownership of a Borrower or Applicable Intermediary engaged in such business or
operations, or matters reasonably incidental thereto, or the performance of the
Loan Documents, provided, however, that no Borrower that owns or is the
Applicable Borrower with respect to any Aircraft may own or be the Applicable
Borrower with respect to any other Aircraft;
8.17 Ownership, Operation and Leasing of Financed Aircraft.
(a) Permit any Person other than a Borrower (or a Beneficial Owner solely by
virtue of its beneficial interest in the respective Borrower) to own
beneficially or of record any Financed Aircraft;
(b) Permit any Financed Aircraft to be leased, subleased or
chartered to any Person other than the Applicable Carrier or the Applicable
Intermediary, or to be operated by any Person other than the Applicable Borrower
or the Applicable Carrier, except as permitted in the Security Agreement;
(c) Permit any Financed Aircraft to be leased to an Eligible
Carrier except under the terms of an Eligible Lease;
(d) Permit any Financed Aircraft to be flown into or located
in any country (or part thereof) designated by any insurance company providing
insurance with respect to such Aircraft as a war zone, a recognized area of
hostilities or an area threatened with war or hostilities unless (in addition to
any other insurance that may be required by Section 3.7 of the Security
Agreement) such Aircraft is covered by hijacking (air piracy), governmental
confiscation, nationalization, expropriation and restraint insurance, in each
case in the amount (and with the provisions) required by Section 3.7 of the
Security Agreement (as if the Applicable Carrier were not a Rated Carrier,
except that a Rated Carrier may self-insure for such risks to the extent
permitted by (and subject to the overall limits on self-insurance contained in)
Section 3.7(c) of the Security Agreement);
8.18 Concentration Restrictions. Subject to Section 7.20,
permit any Concentration Restriction to be exceeded or otherwise violated;
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8.19 Servicing Agreement. (a) Amend, modify or supplement
the Servicing Agreement in any material respect without the consent of the
Agent;
(b) Pay any management or other fee to UniCapital, CLA, Cauff
Lippman or any Affiliate other than payment of servicing fees under the
Servicing Agreement to the extent permitted in the Lockbox Agreement; or
(c) Commit or permit any material breach of the Servicing
Agreement.
8.20 Representations regarding Agent and Lenders. Represent or
hold out, or permit any Applicable Carrier to represent or hold out, the Agent
or any Lender as (a) the owner of any Financed Aircraft, (b) carrying goods or
passengers on any such Financed Aircraft, or (c) being in any way responsible
for any operation of carriage (whether for hire or reward or gratuitously) which
may be undertaken by any Borrower, Guarantor, Subsidiary or Applicable Carrier.
ARTICLE IX
Events of Default and Acceleration
9.1 Events of Default. If any one or more of the following
events (herein called "Events of Default") shall occur for any reason whatsoever
(and whether such occurrence shall be voluntary or involuntary or come about or
be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment
of the principal of any Loan or other Obligation, when and as the same
shall be due and payable whether pursuant to any provision of Article
II, at maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment
of any amount of interest on any Loan or other Obligation or of any
fees or other amounts payable to any of the Lenders or the Agent within
three (3) Business Days after the date on which the same shall be due
and payable; or
(c) if default shall be made in the performance or observance
of any covenant set forth in Section 7.5, 7.11, 7.12, 7.19 or Article
VIII;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a), (b) or (c) above), or if a default shall be
made in the performance or observance of, or shall occur under, any
covenant, agreement or provision contained in any of the other Loan
Documents (beyond any applicable grace period, if any, contained
therein) or in any instrument or document evidencing or creating any
obligation, guaranty, or Lien in favor of the Agent (acting in any
capacity) or any of
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the Lenders or delivered to the Agent (acting in any capacity) or any
of the Lenders in connection with or pursuant to this Agreement or any
of the Obligations, and such default shall continue for 30 or more days
after the earlier of receipt of notice of such default to an Authorized
Representative from the Agent (acting in any capacity) or an officer of
any Borrower becomes aware of such default, or if any Loan Document
ceases to be in full force and effect (other than by reason of any
action by the Agent (acting in any capacity)), or if without the
written consent of the Lenders, this Agreement or any other Loan
Document shall be disaffirmed or shall terminate, be terminable or be
terminated or become void or unenforceable for any reason whatsoever
(other than in accordance with its terms in the absence of default or
by reason of any action by the Lenders or the Agent (acting in any
capacity)); or
(e) if there shall occur (i) a default, which is not waived,
in the payment of any principal, interest, premium or other amount with
respect to any Indebtedness or Rate Hedging Obligation (other than the
Loans and other Obligations) of any Borrower or any Subsidiary, or (ii)
a 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 or Rate
Hedging Obligation may have been issued, created, assumed, guaranteed
or secured by any Borrower or any Subsidiary, or (iii) any other event
of default as specified in any agreement or instrument under or
pursuant to which any such Indebtedness or Rate Hedging Obligation may
have been issued, created, assumed, guaranteed or secured by any
Borrower or any Subsidiary, and such default or event of default under
clause (i), (ii) or (iii) above shall continue for more than the period
of grace, if any, therein specified, or such default or event of
default under clause (i), (ii) or (iii) above 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
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report
or statement at any time furnished to the Agent (acting in any
capacity) or any Lender by or on behalf of any Borrower or any other
Credit Party pursuant to or in connection with any Loan Document, or
otherwise, shall be false or misleading in any material respect when
given; or
(g) if any Borrower, any Subsidiary or other Credit Party
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; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of any Borrower, any Subsidiary or other
Credit Party 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 any
Borrower, any Subsidiary
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or other Credit Party 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
any Borrower, any Subsidiary or other Credit Party 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
any Borrower, any Subsidiary or other Credit Party 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 any
Borrower, any Subsidiary or other Credit Party takes any action to
indicate its consent to or approval of any such proceeding or petition;
or
(i) if (i) one or more judgments or orders where the amount
not covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $10,000 is rendered against any Borrower or
any Subsidiary, or (ii) there is any attachment, injunction or
execution against any of a Borrower's or Subsidiaries' properties for
any amount in excess of $10,000 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
(j) if any Borrower or any Subsidiary shall, other than in the
ordinary course of business (as determined by past practices), suspend
all or any part of its operations material to the conduct of the
business of any Borrower or such Subsidiary for a period of more than
60 days; or
(k) if there shall occur and not be waived an "Event of
Default" as defined in any of the other Loan Documents or in any credit
agreement or other document evidencing or securing the NationsBank
Facility or in one or more other documents or instruments evidencing or
securing any Indebtedness for Money Borrowed of NSJ, Cauff Lippman or
any of their respective Subsidiaries in an aggregate amount of
$10,000,000 or more; or
(l) if this Agreement or any other Loan Document shall for any
reason not be, or be asserted by any Borrower or any other Credit Party
or Subsidiary not to be, a legal, valid and binding obligation of any
Borrower or any Credit Party (as the case may be) enforceable in
accordance with its terms; or
(m) if any Lien of the Agent pursuant to any Loan Document
shall for any reason not be, or be asserted by any Borrower or any
other Credit Party or Subsidiary not to be, a valid, first priority
perfected Lien on the Collateral identified therein (except to the
extent that such Lien is not required hereunder to be a valid, first
priority perfected Lien on such Collateral), subject to no other Liens
except Permitted Liens;
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then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,
(A) either or both of the following actions may be
taken: (i) the Agent, with the consent of the Required
Lenders, may, and at the direction of the Required Lenders
shall, declare any obligation of the Lenders to make further
Loans terminated, whereupon the obligation of each Lender to
make further Loans hereunder shall terminate immediately, and
(ii) the Agent shall at the direction of the Required Lenders,
at their option, declare by notice to the Borrowers any or all
of the Obligations to be immediately due and payable, and the
same, including all interest accrued thereon and all other
obligations of any Borrower to the Agent and the Lenders,
shall forthwith become immediately due and payable without
presentment, demand, protest, notice or other formality of any
kind, all of which are hereby expressly waived, anything
contained herein or in any instrument evidencing the
Obligations to the contrary notwithstanding; provided,
however, that notwithstanding the above, if there shall occur
an Event of Default under clause (g) or (h) above, then the
obligation of the Lenders to make Loans hereunder shall
automatically terminate and any and all of the Obligations
shall be immediately due and payable without the necessity of
any action by the Agent or the Required Lenders or notice to
the Agent or the Lenders;
(B) each Borrower shall, upon demand of the Agent or
the Required Lenders, promptly cause to be performed at
Borrowers' expense by independent certified public accountants
acceptable to the Agent an audit of all Financed Aircraft; and
(C) the Agent and each of the Lenders shall have all
of the rights and remedies available under the Loan Documents
or under any applicable law, including without limitation all
of the rights and remedies of a secured party under any
applicable Uniform Commercial Code, the FAA Act, the Mortgage
Convention or any Applicable Foreign Aviation Law.
9.2 Agent to Act. In case any one or more Events of Default
shall occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
9.3 Cumulative Rights. No right or remedy herein conferred
upon the Lenders or the Agent is intended to be exclusive of any other rights or
remedies contained herein or in any other Loan Document, and every such right or
remedy shall be cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.
<PAGE> 76
75
9.4 No Waiver. No course of dealing between any Borrower and
any Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
9.5 Allocation of Proceeds. If an Event of Default has
occurred and not been waived, and the maturity of the Loans has been accelerated
pursuant to Article IX hereof, all payments received by the Agent hereunder, in
respect of any principal of or interest on the Obligations or any other amounts
payable by any Borrower hereunder, shall be applied by the Agent in the
following order (or in such manner as the Required Lenders may determine):
(a) amounts due to the Lenders pursuant to Sections 2.10
and 11.5;
(b) amounts due to the Agent pursuant to Section 10.8;
(c) payments of interest on Loans, to be applied for the
ratable benefit of the Lenders;
(d) payments of principal of Loans, to be applied for the
ratable benefit of the Lenders;
(e) amounts due to the Lenders pursuant to Sections 7.15
and 11.9;
(f) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the
Lenders;
(g) amounts due to any of the Lenders in respect of
Obligations consisting of liabilities under any Swap Agreement with any
of the Lenders on a pro rata basis according to the amounts owed; and
(h) any surplus remaining after application as provided for
herein, to any Borrower or otherwise as may be required by applicable
law.
9.6 Activities of Eligible Carriers. Notwithstanding anything
contained in this Agreement or any other Loan Document, the Credit Parties shall
not be deemed to be in breach of their respective obligations hereunder or
thereunder with respect to the care, maintenance, alteration, possession,
return, replacement, pooling, subleasing, use or operation of any Financed
Aircraft or any part thereof subject to an Eligible Lease by virtue of a default
by the Applicable Carrier under such Eligible Lease so long as each of the
following conditions is satisfied:
(a) such default by the Applicable Carrier is not within the
control of any Credit Party,
(b) the Credit Parties are in compliance with Section 7.21,
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(c) such default does not relate to any use or location of an
Aircraft in any jurisdiction that constitutes an Event of Default
hereunder, any failure to make any payment required by this Agreement
or any other Loan Document when due hereunder or thereunder, or any
failure to maintain any insurance required under this Agreement or any
other Loan Document, or any failure to maintain perfection of the
Agent's Lien on any Collateral,
(d) within 60 days (or, if the Applicable Carrier is a U.S.
Carrier, 90 days) after any Credit Party has notice or knowledge of
such default (such 60 or 90-day period, as the case may be, being
referred to as the "Applicable Lease Cure Period"), such default is
completely cured or all conditions under Section 2.13 for the release
of the Applicable Borrower with respect to such Aircraft (including
without limitation all payments required under such Section with
respect to Loans, other Obligations, equity contributions and other
loans and interest) have been satisfied in full, and
(e) during the Applicable Lease Cure Period, the Applicable
Borrower shall not request or receive any Loan hereunder.
ARTICLE X
The Agent
10.1 Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents, as "Mortgagee" under each Security
Agreement and as "Security Agent" under each Lockbox Agreement (references in
this Article X to the term "Agent" being deemed to include as well such other
capacities), with such powers and discretion as are specifically delegated to
the Agent by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in Section 10.5 and the first sentence of
Section 10.6 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 the Loan Documents 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 Loan Document or any certificate or other
document referred to or provided for in, or received by any of them
under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or
any other document referred to or provided for therein or for any
failure by any Credit Party or any other 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 Credit Party
<PAGE> 78
77
or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any of its
Subsidiaries or affiliates;
(d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted
to be taken by it under or in connection with any Loan Document, except
for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
10.2 Reliance by Agent. The 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 Credit Party), independent
accountants, and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until the Agent receives and accepts an Assignment and Acceptance executed
in accordance with Section 11.1 hereof. As to any matters not expressly provided
for by the Loan Documents, the 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 Required Lenders, and such instructions shall be
binding on all of the Lenders; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to any Loan Document 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.
10.3 Defaults. The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default or Event of Default unless the Agent
has received written notice from a Lender or a Borrower specifying such Default
or Event of Default and stating that such notice is a "Notice of Default". In
the event that the Agent receives such a notice of the occurrence of a Default
or Event of Default, the Agent shall give prompt notice thereof to the Lenders.
The Agent shall (subject to Section 10.2 hereof) take such action with respect
to such Default or Event of Default as shall reasonably be directed by the
Required Lenders, provided that, unless and until the Agent shall have received
such directions, the 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.
10.4 Rights as Lender. With respect to its Revolving Credit
Commitment and the Loans made by it, Lehman (and any successor acting as 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 Agent, and the term "Lender" or "Lenders" shall,
<PAGE> 79
78
unless the context otherwise indicates, include the Agent in its individual
capacity. The 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 Credit Party or any of its Subsidiaries or affiliates as if it
were not acting as Agent, and Lehman (and any successor acting as Agent) and its
affiliates may accept fees and other consideration from any Credit Party or any
of its Subsidiaries or affiliates for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.
10.5 Indemnification. The Lenders agree to indemnify the Agent
(to the extent not reimbursed under Section 11.9 hereof, but without limiting
the obligations of any Borrower under such Section) ratably in accordance with
their respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including reasonable attorneys' fees), or disbursements of any kind
and nature whatsoever that may be imposed on, incurred by or asserted against
the Agent (including by any Lender) in any way relating to or arising out of any
Loan Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Loan Document; 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 Agent promptly
upon demand for its ratable share of any costs or expenses payable by any
Borrower under Section 11.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by any Borrower. The agreements contained
in this Section 10.5 shall survive payment in full of the Loans and all other
amounts payable under this Agreement.
10.6 Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the 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 Loan Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the 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 any Credit Party or any of its Subsidiaries or
affiliates that may come into the possession of the Agent or any of its
affiliates.
10.7 Resignation of Agent. The Agent may resign at any time by
giving notice thereof to the Lenders and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent, subject (so long as no Default or Event of Default has occurred and is
continuing) to the written consent of an Authorized Representative, which
consent shall not be unreasonably withheld. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized
<PAGE> 80
79
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
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 Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article X 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 Agent.
10.8 Fees. The Borrowers agree, jointly and severally, to pay
to the Agent, for its individual account, an annual Agent's fee as from time to
time agreed to by any Borrower and Agent in writing.
ARTICLE XI
Miscellaneous
11.1 Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Loans, its Note, and its Revolving Credit Commitment); provided,
however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least
equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Agreement and the Note; and
(iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the
form of Exhibit B hereto, together with any Note subject to such
assignment and a processing fee of $3,500 (which amount shall not be
payable by any Borrower);
(v) any assignment of all or any portion of the Revolving
Credit Commitment shall require the consent of an Authorized
Representative, such consent not to be unreasonably withheld; and
(vi) neither any Borrower nor UniCapital shall incur any
greater expense or liabilities (including, without limitation,
indemnities and increased costs) than it would have incurred had such
assignment not taken place.
<PAGE> 81
80
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrowers shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrowers and the Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 4.6.
(b) The Agent shall maintain at its address referred to in
Section 11.2 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Revolving Credit Commitment of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by any Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit B
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
parties thereto.
(d) Each Lender may sell participations to one or more Persons
in all or a portion of its rights, obligations or rights and obligations under
this Agreement (including all or a portion of its Revolving Credit Commitment or
its Loans); provided, however, that (i) such Lender s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article IV and the right of set-off contained in Section
11.3, and (iv) each Borrower shall continue to deal solely and directly with
such Lender in connection with such Lender s rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of any Borrower relating to its Loans and its Note and to approve
any amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount of principal of
or the rate at which interest or fees are payable on such Loans or Note,
extending any scheduled principal payment date or date fixed for the payment of
interest on such Loans or Note, releasing all or substantially all of the
Collateral (except for a release of Collateral in accordance with Section 2.13),
releasing any Guarantor (except for a release of a Guarantor in accordance with
Section 2.13), or extending or increasing its Revolving Credit Commitment).
<PAGE> 82
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(e) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any portion of
its Loans and its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(f) Any Lender may furnish any information concerning any
Borrower or any of its Subsidiaries in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.15.
11.2 Notices. Any notice shall be conclusively deemed to have
been received by any party hereto and be effective (i) on the day on which
delivered (including hand delivery by commercial courier service) to such party
(against receipt therefor), (ii) on the date of receipt at such address,
telefacsimile number or telex number as may from time to time be specified by
such party in written notice to the other parties hereto or otherwise received),
in the case of notice by telegram, telefacsimile or telex, respectively (where
the receipt of such message is verified by return), or (iii) on the fifth
Business Day after the day on which mailed, if sent prepaid by certified or
registered mail, return receipt requested, in each case delivered, transmitted
or mailed, as the case may be, to the address, telex number or telefacsimile
number, as appropriate, set forth below or such other address or number as such
party shall specify by notice hereunder:
(a) if to UniCapital or any Borrower:
to UniCapital or such Borrower
c/o UniCapital Corporation
10800 Biscayne Boulevard
Miami, Florida 33161
Attn: Treasurer
Telephone: (305) 899-5000
Telefacsimile: (305) 899-5050
with a copy to:
Cauff, Lippman Aviation, Inc.
9420 S.W. 77th Avenue
Miami, Florida 33156
Attn: Wayne Lippman
Telephone: (305) 274-7277
Telefacsimile: (305) 271-1339
and, if such Borrower is a UniCapital Subsidiary Trust,
a copy to:
First Security Bank, National Association
79 South Main Street
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82
Salt Lake City, Utah 84111
Attn: Corporate Trust Department
Telephone: (801) 246-5630
Telefacsimile: (801) 246-5053
(b) if to the Agent:
Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attn: Vincent Primiano
with a copy to:
Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attn: Chris Czako
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance;
(d) if to any other Credit Party, at the address set forth on
the signature page of the Facility Guaranty or Security Instrument executed by
such Credit Party, as the case may be.
11.3 Right of Set-off; Adjustments. (a) Upon the occurrence
and during the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its affiliates)
to or for the credit or the account of any Borrower against any and all of the
obligations of any Borrower now or hereafter existing under this Agreement and
the Note held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or such Note and although such obligations
may be unmatured. Each Lender agrees promptly to notify the applicable Borrower
after any such set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section 11.3 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of the Loans owing to it, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, or otherwise), in a greater proportion than any such
payment to or collateral received by any other Lender, if any, in respect
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of such other Lender's Loans owing to it, 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 owing to it, 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; provided, however, that if all or any portion of such excess
payment or benefits 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. Each Borrower agrees that any
Lender so purchasing a participation from a Lender pursuant to this Section 11.3
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 Borrowers in the amount
of such participation.
11.4 Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the execution and delivery to the Lenders of this Agreement and the Notes and
shall continue in full force and effect so long as any of Obligations remain
outstanding or any Lender has any Loan hereunder or any Borrower has continuing
obligations hereunder unless otherwise provided herein. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such party and all
covenants, provisions and agreements by or on behalf of any Borrower which are
contained in the Loan Documents shall inure to the benefit of the successors and
permitted assigns of the Lenders or any of them.
11.5 Expenses. UniCapital and each Borrower agrees, jointly
and severally, to pay on demand (subject, in the case of preparation, execution,
delivery and administration costs, to the Fee Letter), all costs and expenses of
the Agent in connection with the preparation, execution, delivery,
administration, modification, and amendment of this Agreement, the other Loan
Documents, and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for the Agent (excluding
the cost of internal counsel) with respect thereto and with respect to advising
the Agent as to its rights and responsibilities under the Loan Documents;
provided, however, that UniCapital and the Borrower shall not be obligated to
reimburse the Agent for the fees of Simpson Thacher & Bartlett related to the
documentation and negotiation of the initial Loan Documents in an amount in
excess of $75,000 plus disbursements. UniCapital and each Borrower further
agrees, jointly and severally, to pay on demand all costs and expenses of the
Agent and the Lenders, if any (including, without limitation, reasonable
external attorneys' fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the Loan
Documents and the other documents to be delivered hereunder.
11.6 Amendments and Waivers. Any provision of this Agreement
or any other Loan Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrowers and the
Required Lenders (and, if Article X or the rights or duties of the Agent are
affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all the Lenders, (i) increase the Revolving Credit
Commitment of the Lenders, (ii) reduce the principal of or rate of interest on
any Loan or any fees or other amounts payable hereunder, (iii) postpone any date
fixed for the payment of any scheduled
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84
installment of principal of or interest on any Loan or any fees or other amounts
payable hereunder or for termination of any Revolving Credit Commitment, or (iv)
change the percentage of the Revolving Credit Commitment or of the unpaid
principal amount of the Notes, or the number of Lenders, which shall be required
for the Lenders or any of them to take any action under this Section 11.6 or any
other provision of this Agreement or (v) release any Guarantor or all or
substantially all of the Collateral (except for a release of a Guarantor or
Collateral in accordance with Section 2.14);
No notice to or demand on any Borrower in any case shall
entitle such Borrower or any other Borrower to any other or further notice or
demand in similar or other circumstances, except as otherwise expressly provided
herein. No delay or omission on any Lender's or the Agent's part in exercising
any right, remedy or option shall operate as a waiver of such or any other
right, remedy or option or of any Default or Event of Default.
11.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such fully-executed
counterpart.
11.8 Return of Funds. If after receipt of any payment of all
or any part of the Obligations, any Lender is for any reason compelled to
surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
each Borrower, jointly and severally, shall be liable to, and shall indemnify
and hold the Agent or such Lender harmless for, the amount of such payment
surrendered until the Agent or such Lender shall have been finally and
irrevocably paid in full. The provisions of the foregoing sentence shall be and
remain effective notwithstanding any contrary action which may have been taken
by the Agent or the Lenders in reliance upon such payment, and any such contrary
action so taken shall be without prejudice to the Agent or the Lenders' rights
under this Agreement and shall be deemed to have been conditioned upon such
payment having become final and irrevoc able.
11.9 Indemnification; Limitation of Liability. (a) UniCapital
and each Borrower, jointly and severally, agrees to indemnify and hold harmless
the Agent (which term for purposes of this Section 11.9 includes the "Mortgagee"
under each Security Agreement and the "Security Agent" under each Lockbox
Agreement) and each Lender and each of their affiliates and their respective
officers, directors, employees, agents, and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities,
costs, and expenses (including, without limitation, reasonable external
attorneys' fees, but excluding principal and accrued interest on any Loan) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or proceeding or
preparation of defense in connection therewith) the Loan Documents, any of the
transactions contemplated herein, any Aircraft or other Collateral, any
possession, performance, transportation, management, sale, ownership,
registration, mortgage, charging, control, maintenance, service, repair, design,
testing, defect, overhaul, purchase, bearing, use or operation
<PAGE> 86
85
of any Aircraft or other Collateral, or the actual or proposed use of the
proceeds of the Loans, except to the extent such claim, damage, loss, liability,
cost, or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation, litigation or
other proceeding to which the indemnity in this Section 11.9 applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by UniCapital, any Borrower, its directors, shareholders
or creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. UniCapital and each Borrower agrees that no
Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to it, any of its Subsidiaries, any Guarantor or
any security holders or creditors thereof arising out of, related to or in
connection with the transactions contemplated in any Loan Document, except to
the extent that such liability directly results from such Indemnified Party's
gross negligence or willful misconduct. UniCapital and each Borrower agrees not
to assert any claim against the Agent, any Lender, any of their affiliates, or
any of their respective directors, officers, employees, attorneys, agents, and
advisers, on any theory of liability, for special, indirect, consequential, or
punitive damages arising out of or otherwise relating to the Loan Documents, any
of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Loans.
(b) Without prejudice to the survival of any other agreement
of UniCapital or any Borrower hereunder, the agreements and obligations of
UniCapital and each Borrower contained in this Section 11.9 shall survive the
payment in full of the Loans and all other amounts payable under this Agreement.
(c) Except as expressly provided herein, each Lender, each
Borrower and the Agent agree that this Agreement and each other Loan Document
entered into by a Borrower is executed by a Qualified Trustee, not individually
but solely as Trustee under a Trust Agreement in the exercise of the power and
authority conferred and vested in it as such Trustee, that each and all of the
representations, undertakings and agreements by a Qualified Trustee, or for the
purpose or with the intention of binding a Qualified Trustee, are made and
intended for the purpose of binding only the Trust Estates (and, to the extent
any Lender, Borrower or Agent has an interest therein, any liability insurance
proceeds), and that in no case whatsoever shall any Qualified Trustee be
personally liable for any loss in respect of such representations, undertakings
and agreements, that nothing herein contained shall be construed as creating any
liability on any Qualified Trustee individually or personally, to perform any
covenant, either express or implied, herein, all such liability, if any, being
expressly waived by each Lender, each Borrower and the Agent and by each and
every Person now or hereafter claiming by, through or under such Persons except
with respect to the gross negligence or willful misconduct of such Qualified
Trustee or for any Liens on the Collateral arising from, through or under such
Qualified Trustee in its individual capacity, and that so far as any Qualified
Trustee, individually or personally is concerned, each Lender, each Borrower and
the Agent and any Person claiming by, through or under such Persons shall look
solely, except as provided above, to the Trust Estates (and, to the extent any
Lender, Borrower or Agent has an interest therein, any liability insurance
proceeds), for the performance of any obligation under this Credit Agreement and
the other Loan Documents. The term "Trustee" as used in this Section 11.9(c)
shall include any
<PAGE> 87
86
Qualified Trustee succeeding a Qualified Trustee, as trustee under a Trust
Agreement. Any obligation of any Borrower hereunder or under the other Loan
Documents may be performed by a Beneficial Owner, and any such performance shall
not be construed as revocation of the trust created by any Trust Agreement.
11.10 Severability. If any provision of this Agreement or the
other Loan Documents shall be determined to be illegal or invalid as to one or
more of the parties hereto, then such provision shall remain in effect with
respect to all parties, if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall remain effective and
binding on the parties hereto.
11.11 Entire Agreement. This Agreement, together with the
other Loan Documents, constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all previous proposals,
negotiations, representations, and other communications between or among the
parties, both oral and written, with respect thereto.
11.12 Usury Savings Clause. Notwithstanding any other
provision herein, the aggregate interest rate charged under any of the Notes or
this Agreement, 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 any Note or this 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 had at all times been in effect. In addition, if when
the Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, the Borrowers, jointly and severally, 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 Borrowers 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 applicable 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.
11.13 Payments. All principal, interest, and other amounts to
be paid by any Borrower under this Agreement and the other Loan Documents shall
be paid to the Agent at the Principal Office in Dollars and in immediately
available funds, without setoff, deduction or counterclaim. Subject to the
definition of "Interest Period" herein, whenever any payment under
<PAGE> 88
87
this Agreement or any other Loan Document shall be stated to be due on a day
that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time in such case shall be included in the
computation of interest and fees, as applicable, and as the case may be.
11.14 Confidentiality. The Agent and each Lender (each, a
"Lending Party") agrees to keep confidential any information furnished or made
available to it by UniCapital or any Affiliate of UniCapital pursuant to or in
connection with this Agreement or the other Loan Documents which is clearly
labeled as "confidential material"; provided that nothing herein shall prevent
any Lending Party from disclosing such information (a) to any other Lending
Party or any affiliate of any Lending Party, or any officer, director, employee,
agent, or advisor of any Lending Party or affiliate or any Lending Party, (b) to
any other Person if reasonably incidental to the administration of the credit
facility provided herein, (c) as required by any law, rule, or regulation, (d)
upon the order of any court or administrative agency, (e) upon the request or
demand of any regulatory agency or authority, (f) that is or becomes available
to the public or that is or becomes available to any Lending Party other than as
a result of a disclosure by any Lending Party prohibited by this Agreement, (g)
in connection with any litigation to which such Lending Party or any of its
affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Loan Document, and (i)
subject to provisions substantially similar to those contained in this Section,
to any actual or proposed participant or assignee.
11.15 GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
(b) UNICAPITAL AND EACH BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK,
STATE OF NEW YORK, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY
OF THIS AGREEMENT, UNICAPITAL AND EACH BORROWER EXPRESSLY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE EXERCISE
OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING, AND UNICAPITAL AND EACH BORROWER HEREBY IRREVOCABLY
SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) UNICAPITAL AND EACH BORROWER AGREES THAT SERVICE OF
PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT
OR OTHER LEGAL PROCESS IN ANY SUCH
<PAGE> 89
88
SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID)
TO THE ADDRESS OF UNICAPITAL OR SUCH BORROWER PROVIDED IN SECTION 11.2, OR BY
ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (a) OR (b) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY OTHER
JURISDICTION. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH
JURISDICTION, UNICAPITAL AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH
SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT
AND ITS PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE
AVAILABLE UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE
DELIVERED IN CONNECTION THEREWITH, UNICAPITAL, THE BORROWERS, THE AGENT AND THE
LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND
HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
<PAGE> 90
89
[SIGNATURE PAGES FOLLOW]
<PAGE> 91
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as
expressly specified herein, but solely as trustee,
as the Initial Borrower
By:
----------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
<PAGE> 92
LEHMAN COMMERCIAL PAPER INC., as Agent
and as a Lender
By:
----------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
<PAGE> 93
UniCapital has caused this instrument to be made, executed and
delivered by its duly authorized officer as of the day and year first written
above, in order to indicate UniCapital's agreement to be bound by each of the
terms of the Credit Agreement that are applicable to UniCapital.
UNICAPITAL CORPORATION
By:
----------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
<PAGE> 94
EXHIBIT A
Applicable Commitment Percentages
Applicable
Revolving Credit Commitment
Lender Commitment Percentage
- - ------ ---------- ----------
<PAGE> 95
Schedule 6.7
Transfer Restrictions to Sale or Assignment of Financed Aircraft
1. Transfer will be subject to the Applicable Carrier's right
of quiet enjoyment described in Section 3.4 hereof.
2. Such transfer shall not violate, and shall be in accordance
with, any applicable laws.
3. Transferee may be required to be an institutional investor
and/or have a specified minimum net worth or have its obligations
guaranteed by a Person with a specified minimum net worth.
4. Transfers to competitors or other restricted persons may
be prohibited.
5. Transferee may be required to make customary covenants and
representations and provide counsel opinions.
6. Transfers may be limited as to aggregate number of persons
who may hold interests in the Financed Aircraft.
7. Transfers may be limited to persons organized, domiciled or
resident in certain jurisdictions or so as otherwise to prevent or
limit taxes.
8. Transferee may be required to pay all fees, costs and
taxes related to the transfer.
9. Transferee may be required to make certain filings and
recordations.
10. Transferee may be required to provide certain indemnities
in connection with the transfer.
The foregoing notwithstanding, the restrictions in items 3
through 10 shall only apply to a transfer of an Aircraft, or an interest in the
owner of an Aircraft, to the extent (a) such Aircraft is subject to an Eligible
Lease, (b) such Eligible Lease contains such restrictions, and (c) such Eligible
Lease has not been terminated.
<PAGE> 96
Schedule 7.21(a)
Maintenance, Return, Alteration, Replacement, Pooling and Lease
Any Lease respect to any Financed Aircraft shall require the
Applicable Carrier to meet standards with respect to the maintenance and
alteration of such Financed Aircraft, and with respect to the replacement of
parts and pooling of parts and engines, which standards in each case meet the
requirements of the Security Agreement and are at least as restrictive as the
obligations of the Applicable Borrower with respect to such Aircraft under the
Security Agreement.
Any Lease with respect to any Financed Aircraft shall also
require that such Financed Aircraft be returned to the Applicable Borrower (i)
in compliance with the maintenance requirements set forth in the Security
Agreement, and (ii) in the case of an Aircraft, in such condition as to enable
an airworthiness certificate to be obtained from the FAA or (in the case of
Aircraft not registered in the United States) any Applicable Foreign
Jurisdiction with respect to such Aircraft.
Any Lease with respect to any Financed Aircraft shall also
contain restrictions on the leasing, subleasing and chartering of such Financed
Aircraft that are at least as restrictive as the terms of Section 8.17 and the
Security Agreement.
<PAGE> 97
TABLE OF CONTENTS
<TABLE>
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ARTICLE I
Definitions and Terms............................................ 1
1.1 Definitions................................................................................... 1
ARTICLE II
The Revolving Credit Facility........................................ 32
2.1 Revolving Loans............................................................................... 32
2.2 Payment of Interest........................................................................... 34
2.3 Payment of Principal.......................................................................... 34
2.4 Manner of Payment............................................................................. 35
2.5 Notes......................................................................................... 36
2.6 Pro Rata Payments............................................................................. 36
2.7 Reductions.................................................................................... 36
2.8 Conversions and Elections of Subsequent Interest Periods...................................... 36
2.9 Increase and Decrease in Amounts.............................................................. 37
2.10 Fees.......................................................................................... 37
2.11 Deficiency Advances........................................................................... 37
2.12 Use of Proceeds............................................................................... 38
2.13 Designation of Borrowing Affiliate; Releases.................................................. 38
2.14 Joint and Several Liability................................................................... 39
2.15 Eligible Lease Involving Eligible Intermediary................................................ 40
ARTICLE III
Security................................................... 40
3.1 Security...................................................................................... 40
3.2 Further Assurances............................................................................ 41
3.3 Information Regarding Collateral.............................................................. 41
3.4 Quiet Enjoyment............................................................................... 41
ARTICLE IV
Change in Circumstances........................................... 42
4.1 Increased Cost and Reduced Return............................................................. 42
4.2 Limitation on Types of Loans.................................................................. 43
4.3 Illegality.................................................................................... 44
4.4 Treatment of Affected Loans................................................................... 44
4.5 Compensation.................................................................................. 44
4.6 Taxes......................................................................................... 45
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<TABLE>
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ARTICLE V
Conditions to Making Loans.......................................... 47
5.1 Conditions of Closing......................................................................... 47
5.2 Conditions of Initial Loan.................................................................... 49
5.3 Conditions of Revolving Loans................................................................. 52
5.4 Appraisal Procedure........................................................................... 54
ARTICLE VI
Representations and Warranties........................................ 55
6.1 Organization and Authority.................................................................... 55
6.2 Loan Documents................................................................................ 55
6.3 Solvency...................................................................................... 56
6.4 Subsidiaries and Stockholders................................................................. 56
6.5 Ownership Interests........................................................................... 56
6.6 Financial Condition........................................................................... 56
6.7 Title to Properties........................................................................... 57
6.8 Taxes......................................................................................... 57
6.9 Other Agreements.............................................................................. 57
6.10 Litigation.................................................................................... 58
6.11 Margin Stock.................................................................................. 58
6.12 Investment Company............................................................................ 58
6.13 Patents, Etc.................................................................................. 58
6.14 No Untrue Statement........................................................................... 58
6.15 No Consents, Etc.............................................................................. 59
6.16 Employee Benefit Plans........................................................................ 59
6.17 No Default.................................................................................... 60
6.18 Environmental Laws............................................................................ 60
6.19 Employment Matters............................................................................ 60
6.20 RICO.......................................................................................... 60
6.21 Liens......................................................................................... 61
ARTICLE VII
Affirmative Covenants............................................ 61
7.1 Financial Reports, Etc........................................................................ 61
7.2 Maintain Properties........................................................................... 63
7.3 Existence, Qualification, Etc................................................................. 63
7.4 Regulations and Taxes......................................................................... 63
7.5 Insurance..................................................................................... 63
7.6 True Books.................................................................................... 63
7.7 Right of Inspection........................................................................... 63
7.8 Observe all Laws.............................................................................. 64
7.9 Governmental Licenses......................................................................... 64
7.10 Covenants Extending to Other Persons.......................................................... 64
</TABLE>
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<TABLE>
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7.11 Officer's Knowledge of Default................................................................ 64
7.12 Suits or Other Proceedings.................................................................... 64
7.13 Notice of Environmental Complaint or Condition................................................ 64
7.14 Environmental Compliance...................................................................... 65
7.15 Indemnification............................................................................... 65
7.16 Further Assurances............................................................................ 65
7.17 Swap Agreements............................................................................... 65
7.18 Continued Operations.......................................................................... 65
7.19 Semi-Annual Appraisal of Aircraft and Leases.................................................. 65
7.20 Semi-Annual Review of Rated Carriers and Aircraft Models...................................... 66
7.21 Maintenance of Aircraft; Other Covenants and Restrictions; Non-
Discrimination................................................................................ 66
7.22 Re-registration of Aircraft................................................................... 67
7.23 Servicer...................................................................................... 67
7.24 Employee Benefit Plans........................................................................ 67
7.25 Collection Account............................................................................ 68
ARTICLE VIII
Negative Covenants.............................................. 68
8.1 EBITDA-to-Interest Ratio...................................................................... 68
8.2 Acquisitions.................................................................................. 68
8.3 Capital Expenditures.......................................................................... 68
8.4 Liens......................................................................................... 68
8.5 Indebtedness.................................................................................. 69
8.6 Transfer of Assets............................................................................ 69
8.7 Subsidiaries; Investments..................................................................... 70
8.8 Merger or Consolidation....................................................................... 70
8.9 Transactions with Affiliates.................................................................. 70
8.10 Employee Benefit Plans; ERISA Affiliates; Employees........................................... 70
8.11 Fiscal Year................................................................................... 71
8.12 Dissolution, etc.............................................................................. 71
8.13 Change in Control............................................................................. 71
8.14 Negative Pledge Clauses....................................................................... 71
8.15 Partnerships.................................................................................. 72
8.16 Business and Operations....................................................................... 72
8.17 Ownership, Operation and Leasing of Financed Aircraft......................................... 72
8.18 Concentration Restrictions.................................................................... 72
8.19 Servicing Agreement........................................................................... 72
8.20 Representations regarding Agent and Lenders................................................... 73
ARTICLE IX
Events of Default and Acceleration...................................... 73
9.1 Events of Default............................................................................. 73
</TABLE>
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9.2 Agent to Act.................................................................................. 76
9.3 Cumulative Rights............................................................................. 76
9.4 No Waiver..................................................................................... 77
9.5 Allocation of Proceeds........................................................................ 77
9.6 Activities of Eligible Carriers............................................................... 77
ARTICLE X
The Agent.................................................. 78
10.1 Appointment, Powers, and Immunities........................................................... 78
10.2 Reliance by Agent............................................................................. 79
10.3 Defaults...................................................................................... 79
10.4 Rights as Lender.............................................................................. 80
10.5 Indemnification............................................................................... 80
10.6 Non-Reliance on Agent and Other Lenders....................................................... 80
10.7 Resignation of Agent.......................................................................... 80
10.8 Fees.......................................................................................... 81
ARTICLE XI
Miscellaneous................................................ 81
11.1 Assignments and Participations................................................................ 81
11.2 Notices....................................................................................... 83
11.3 Right of Set-off; Adjustments................................................................. 84
11.4 Survival...................................................................................... 85
11.5 Expenses...................................................................................... 85
11.6 Amendments and Waivers........................................................................ 86
11.7 Counterparts.................................................................................. 86
11.8 Return of Funds............................................................................... 86
11.9 Indemnification; Limitation of Liability...................................................... 86
11.10 Severability.................................................................................. 88
11.11 Entire Agreement.............................................................................. 88
11.12 Usury Savings Clause.......................................................................... 88
11.13 Payments...................................................................................... 89
11.14 Confidentiality............................................................................... 89
11.15 GOVERNING LAW; WAIVER OF JURY TRIAL........................................................... 89
</TABLE>
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<PAGE> 101
<TABLE>
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EXHIBIT A Applicable Commitment Percentages A-1
EXHIBIT B Form of Assignment and Acceptance B-1
EXHIBIT C Notice of Appointment (or Revocation) of
Authorized Representative C-1
EXHIBIT D Form of Borrowing Notice D-1
EXHIBIT E Form of Interest Rate Selection Notice E-1
EXHIBIT F Form of Note F-1
EXHIBIT G-1 Form of Domestic Counsel Opinion G-1-1
EXHIBIT G-2 Form on FAA Counsel Opinion at Funding G-2-1
EXHIBIT G-3 Form of Foreign Counsel Opinion G-3-1
EXHIBIT G-4 Form of Post-Funding FAA Counsel Opinion G-4-1
EXHIBIT H Compliance Certificate H-1
EXHIBIT I Form of Facility Guaranty I-1
EXHIBIT J Form of Security Agreement J-1
EXHIBIT K List of Rated Carriers
EXHIBIT L List of Approved Aircraft Models L-1
EXHIBIT M Required Insurance on Each Aircraft M-1
EXHIBIT N Form of Lessee Estoppel Certificate N-1
EXHIBIT O Form of UniCapital Parent Support Agreement
EXHIBIT P Description of Sabena Portfolio
EXHIBIT Q Form of Servicing Agreement Q-1
EXHIBIT R Form of Assumption Letter R-1
EXHIBIT S Borrowing Base Certificate S-1
EXHIBIT T-1 Form of Pledge and Security Agreement(for
pledged beneficial interest in UniCapital
Subsidiary Trust) T-1-1
EXHIBIT T-2 Form of Pledge and Security Agreement (for
pledged interest in UniCapital Special Purpose
Corporation, Beneficial Owner, Applicable
Intermediary or other
Subsidiary) T-2-1
EXHIBIT U Form of Lockbox Agreement U-1
Schedule 3.3 Information Regarding Collateral
Schedule 6.7 Transfer Restrictions to Sale or Assignment of Financed Aircraft
Schedule 6.8 Tax Matters
Schedule 6.10 Litigation
Schedule 7.2 Maintenance
Schedule 7.21(a) Maintenance, Return, Alteration, Replacement, Pooling and Lease
</TABLE>
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<PAGE> 1
Exhibit 10.06
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of the 1st day of February, 1999,
is by and between (i) UniCapital Corporation, a Delaware corporation (the
"Company"), and (ii) Edward A. Jaeckel ("Employee").
RECITALS
The Company desires to employ Employee and to have the benefit of his
skills and services, and Employee desires to accept employment with the Company,
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein, and the performance of each, the
parties hereto, intending legally to be bound, hereby agree as follows:
AGREEMENTS
1. EMPLOYMENT; TERM. The Company hereby employs Employee to perform the
duties described herein, and Employee hereby accepts employment with the
Company, for a term beginning on the date hereof and expiring on April 1, 2000,
unless sooner terminated (the "Term").
2. POSITION AND DUTIES. The Company hereby employs Employee as
Executive Vice President and Chief Credit Policy Officer. Employee will report
directly to, and will be subject to the authority of, the Chief Operating
Officer of the Company. Employee hereby accepts this employment upon the terms
and conditions herein contained and agrees to devote all of his professional
time, attention, and efforts to promote and further the business of the Company.
Employee shall faithfully adhere to, execute, and fulfill all policies
established by the Company.
3. COMPENSATION. For all services rendered by Employee, the Company
shall compensate Employee as follows:
(a) Base Salary. Effective on the date hereof, the base salary
payable to Employee shall be $250,000 per year, payable on a regular basis in
accordance with the Company's standard payroll procedures, but not less than
monthly.
(b) Incentive Bonus. During the Term, Employee shall be eligible to
receive an incentive bonus up to the amount, based upon the criteria, and
payable at such times, as may be determined by the Chief Executive Officer, upon
the advice and with the consent of the Company's Board of Directors (the
"Board") or the Compensation Committee thereof. To the extent that such bonus is
to be determined in light of Employee's performance during a specified fiscal
period and this Agreement commences on a date after the start of such fiscal
period, any bonus payable in respect of such fiscal period's results may be
prorated. In addition, if the period of Employee's employment hereunder expires
before the end of a fiscal period, and if Employee is eligible to receive a
bonus at such time (such eligibility being subject to the restrictions set forth
in Section 6 below), any bonus payable in respect of such fiscal period's
results may be prorated.
<PAGE> 2
(c) Perquisites, Benefits, and Other Compensation. During the Term,
Employee shall be entitled to receive all perquisites and benefits as are
customarily provided by the Company to similarly situated employees, subject to
such changes, additions, or deletions as the Company may make generally from
time to time, as well as such other perquisites or benefits as may be specified
from time to time by the Board.
4. EXPENSE REIMBURSEMENT. The Company shall reimburse Employee for (or,
at the Company's option, pay) all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of his services
hereunder during the Term. All reimbursable expenses shall be appropriately
documented in reasonable detail by Employee upon submission of any request for
reimbursement, and in a format and manner consistent with the Company's expense
reporting policy, as well as applicable federal and state tax record keeping
requirements.
5. PLACE OF PERFORMANCE. Employee understands that he may be requested
by the Company to relocate from his present residence to another geographic
location in order to more efficiently carry out his duties and responsibilities
under this Agreement or as part of a promotion or a change in duties and
responsibilities. In such event, if Employee agrees to relocate, the Company
will provide Employee with a relocation allowance, in an amount determined by
the Company, to assist Employee in covering the costs of moving himself, his
immediate family, and their personal property and effects. The total amount and
type of costs to be covered shall be determined by the Company, in light of
prevailing Company policy at the time.
6. TERMINATION; RIGHTS ON TERMINATION. Employee's employment may be
terminated in any one of the following ways, prior to the expiration of the
Term:
(a) Death. The death of Employee shall immediately terminate the
Term, and no Severance Compensation (as defined below) or other compensation
shall be owed to Employee's estate.
(b) Disability. If, as a result of incapacity due to physical or
mental illness or injury, Employee shall have been unable to perform the
essential functions of his position, with or without reasonable accommodation,
on a full-time basis for a period of four consecutive months, or for a total of
four months in any six-month period, then 30 days after written notice to
Employee (which notice may be given before or after the end of the
aforementioned periods, but which shall not be effective earlier than the last
day of the applicable period), the Company may terminate Employee's employment
hereunder if Employee is unable to resume his full-time duties at the conclusion
of such notice period. If Employee's employment is terminated as a result of
Employee's disability, the Company shall continue to pay Employee his base
salary at the then-current rate for the lesser of (i) three months from the
effective date of termination, or (ii) whatever time period is remaining under
the then-current period of the Term (without regard to renewals thereof). Such
payments shall be made in accordance with the Company's regular payroll cycle.
2
<PAGE> 3
(c) Termination by the Company for "Cause." The Company may
terminate the Term 10 days after written notice to Employee for "cause," which
shall be: (i) Employee's material breach of this Agreement, which breach is not
cured within 10 days of receipt by Employee of written notice from the Company
specifying the breach; (ii) Employee's gross negligence in the performance of
his duties hereunder, intentional nonperformance or misperformance of such
duties, or refusal to abide by or comply with the directives of the Board, his
superior officers, or the Company's policies and procedures, which actions
continue for a period of at least 10 days after receipt by Employee of written
notice of the need to cure or cease; (iii) Employee's willful dishonesty, fraud,
or misconduct with respect to the business or affairs of the Company, and that
in the judgment of the Company materially and adversely affects the operations
or reputation of the Company; (iv) Employee's conviction of a felony or other
crime involving moral turpitude; or (v) Employee's abuse of alcohol or drugs
(legal or illegal) that, in the Company's judgment, materially impairs
Employee's ability to perform his duties hereunder. In the event of a
termination for "cause," as enumerated above, Employee shall have no right to
any Severance Compensation or other compensation.
(d) Without Cause. At any time after the commencement of employment,
the Company may, without "cause", terminate the Term and Employee's employment,
effective 30 days after written notice is provided to Employee. Should Employee
be terminated by the Company without "cause", Employee shall receive from the
Company compensation ("Severance Compensation") equal to the base salary at the
rate then in effect for the lesser of (i) eight months from the effective date
of termination, or (ii) whatever time period is remaining under the then-current
period of the Term (without regard to renewals thereof). Such payments shall be
made in accordance with the Company's regular payroll cycle. If Employee resigns
or otherwise terminates his employment for any reason or for no reason, other
than for disability pursuant to Section 6(b), Employee shall receive no
Severance Compensation or other compensation.
(e) Payment Through Termination. Upon termination of Employee's
employment, Employee shall be entitled to receive all compensation earned and
all benefits and reimbursements (including payments for accrued vacation and
sick leave, in each case in accordance with applicable policies of the Company)
due through the effective date of termination. Additional compensation
subsequent to termination, if any, will be due and payable to Employee only to
the extent and in the manner expressly provided above in this Section 6. With
respect to incentive bonus compensation, Employee shall be entitled to receive
any bonus declared but not paid prior to termination. In addition, in the event
of a termination by the Company under Sections 6(b) or 6(d), Employee shall be
entitled to receive incentive bonus compensation through the end of the
Company's fiscal year in which termination occurs, and paid in such amounts, at
such times, and in such forms as are determined pursuant to Section 3(b) above.
Except as specified in the preceding two sentences, Employee shall not be
entitled to receive any incentive bonus compensation after the effective date of
termination of his employment. All other rights and obligations of the Company
and Employee under this Agreement shall cease as of the effective date of
termination, except that Employee's obligations under Sections 7, 8, 9 and 10
below shall survive such termination in accordance with their terms.
3
<PAGE> 4
7. RESTRICTION ON COMPETITION.
(a) During the Term, and thereafter, if Employee continues to be
employed by the Company and/or any other entity owned by or affiliated with the
Company on an "at will" basis, for the duration of such period, and thereafter
for a period of two years, Employee shall not, directly or indirectly, for
himself or on behalf of or in conjunction with any other person, company,
partnership, corporation, business, group, or other entity (each, a "Person"):
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant, advisor, lender or sales representative, in
any business engaged in providing or servicing equipment leasing or speciality
finance products or services in direct competition with the Company, or any
business engaging in the consolidation of the equipment leasing or speciality
finance industry, within the United States of America (the "Territory");
(ii) call upon any Person who is, at that time, within the
Territory, an employee of the Company for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company;
(iii) call upon any Person who or that is, at that time, or has
been, within one year prior to that time, a customer of the Company within the
Territory for the purpose of soliciting or selling products or services in
direct competition with the Company within the Territory; or
(iv) on Employee's own behalf or on behalf of any competitor,
call upon any Person that, during Employee's employment by the Company was
either called upon by the Company as a prospective acquisition candidate or was
the subject of an acquisition analysis conducted by the Company.
(b) The foregoing covenants shall not be deemed to prohibit Employee
from acquiring as an investment not more than one percent (1%) of the capital
stock of a competing business, whose stock is traded on a national securities
exchange or through the automated quotation system of a registered securities
association.
(c) It is further agreed that, in the event that Employee shall
cease to be employed by the Company and enters into a business or pursues other
activities that, at such time, are not in competition with the Company, Employee
shall not be chargeable with a violation of this Section 7 if the Company
subsequently enters the same (or a similar) competitive business or activity.
(d) For purposes of this Section 7 and Sections 8, 9 and 10,
references to the "Company" shall mean UniCapital Corporation, together with its
subsidiaries and affiliates.
(e) The covenants in this Section 7 are severable and separate, and
the unenforceability of any specific covenant shall not affect the provisions of
any other covenant. If any provision of this Section 7 relating to the time
period or geographic area of the restrictive covenants shall be declared by a
court of competent jurisdiction to exceed the maximum time period or geographic
area, as applicable, that such court deems reasonable and enforceable, said
4
<PAGE> 5
time period or geographic area shall be deemed to be, and thereafter shall
become, the maximum time period or largest geographic area that such court deems
reasonable and enforceable and this Agreement shall automatically be considered
to have been amended and revised to reflect such determination.
(f) All of the covenants in this Section 7 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants; provided, that upon
the failure of the Company to make any payments required under this Agreement,
Employee may, upon 30 days' prior written notice to the Company, waive his right
to receive any additional compensation pursuant to this Agreement and engage in
any activity prohibited by the covenants of this Section 7. It is specifically
agreed that the period of two years stated at the beginning of this Section 7,
during which the agreements and covenants of Employee made in this Section 7
shall be effective, shall be computed by excluding from such computation any
time during which Employee is in violation of any provision of this Section 7.
(g) If the time period specified by this Section 7 shall be reduced
by law or court decision, then, notwithstanding the provisions of Section 6
above, Employee shall be entitled to receive from the Company his base salary at
the rate then in effect solely for the longer of (i) the time period during
which the provisions of this Section 7 shall be enforceable under the provisions
of such applicable law, or (ii) the time period during which Employee is not
engaging in any competitive activity, but in no event longer than the applicable
period provided in Section 6 above.
(h) Employee has carefully read and considered the provisions of
this Section 7 and, having done so, agrees that the restrictive covenants in
this Section 7 impose a fair and reasonable restraint on Employee and are
reasonably required to protect the interests of the Company, and their
respective officers, directors, employees, and stockholders. It is further
agreed that the Company and Employee intend that such covenants be construed and
enforced in accordance with the changing activities, business, and locations of
the Company throughout the term of these covenants.
8. CONFIDENTIAL INFORMATION. Employee hereby agrees to hold in strict
confidence and not to disclose to any third party any of the valuable,
confidential, and proprietary business, financial, technical, economic, sales,
and/or other types of proprietary business information relating to the Company
(including all trade secrets), in whatever form, whether oral, written, or
electronic (collectively, the "Confidential Information"), to which Employee
has, or is given (or has had or been given), access as a result of his
employment by the Company. It is agreed that the Confidential Information is
confidential and proprietary to the Company because such Confidential
Information encompasses technical know-how, trade secrets, or technical,
financial, organizational, sales, or other valuable aspects of the Company's
business and trade, including, without limitation, technologies, products,
processes, plans, clients, personnel, operations, and business activities. This
restriction shall not apply to any Confidential Information that (a) becomes
known generally to the public through no fault of Employee; (b) is required by
applicable law, legal process, or any order or mandate of a court or other
governmental authority to be disclosed; or (c) is reasonably believed by
Employee, based upon the advice of legal
5
<PAGE> 6
counsel, to be required to be disclosed in defense of a lawsuit or other legal
or administrative action brought against Employee; provided, that in the case of
clauses (b) or (c), Employee shall give the Company reasonable advance written
notice of the Confidential Information intended to be disclosed and the reasons
and circumstances surrounding such disclosure, in order to permit the Company to
seek a protective order or other appropriate request for confidential treatment
of the applicable Confidential Information.
9. INVENTIONS. Employee shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements, and valuable
discoveries, whether patentable or not, that are conceived or made by Employee,
solely or jointly with another, during the period of employment or within one
year thereafter, and that are directly related to the business or activities of
the Company and that Employee conceives as a result of his employment by the
Company, regardless of whether or not such ideas, inventions, or improvements
qualify as "works for hire". Employee hereby assigns and agrees to assign all
his interests therein to the Company or its nominee. Whenever requested to do so
by the Company, Employee shall execute any and all applications, assignments, or
other instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.
10. RETURN OF COMPANY PROPERTY; ACCESS TO RECORDS. Promptly upon
termination of Employee's employment by the Company for any reason or no reason,
Employee or Employee's personal representative shall return to the Company (a)
all Confidential Information; (b) all other records, designs, patents, business
plans, financial statements, manuals, memoranda, lists, correspondence, reports,
records, charts, advertising materials, and other data or property delivered to
or compiled by Employee by or on behalf of the Company or its representatives,
vendors, or customers that pertain to the business of the Company, whether in
paper, electronic, or other form; and (c) all keys, credit cards, vehicles, and
other property of the Company. Employee shall not retain or cause to be retained
any copies of the foregoing. Employee hereby agrees that all of the foregoing
shall be and remain the property of the Company, as the case may be, and be
subject at all times to their discretion and control.
11. NO PRIOR AGREEMENTS. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee, his employment by the
Company, and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client, or any other Person.
Further, Employee agrees to indemnify and hold harmless the Company and its
officers, directors, and representatives for any claim, including, but not
limited to, reasonable attorneys' fees and expenses of investigation, of any
such third party that such third party may now have or may hereafter come to
have against the Company or such other persons, based upon or arising out of any
non-competition agreement, invention, secrecy, or other agreement between
Employee and such third party that was in existence as of the date of this
Agreement. To the extent that Employee had any oral or written employment
agreement or understanding with the Company, this Agreement shall automatically
supersede such agreement or understanding, and upon execution of this Agreement
by Employee and the Company, such prior agreement or understanding automatically
shall be deemed to have been terminated and shall be null and void.
6
<PAGE> 7
12. ASSIGNMENT; BINDING EFFECT. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience, and skills. Employee agrees, therefore, that he
cannot assign all or any portion of his performance under this Agreement. This
Agreement may not be assigned or transferred by the Company without the prior
written consent of Employee. Subject to the preceding two sentences, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective heirs, legal representatives, and
assigns. Notwithstanding the foregoing, if Employee accepts employment with a
subsidiary or affiliate of the Company, unless Employee and his new employer
agree otherwise in writing, this Agreement shall automatically be deemed to have
been assigned to such new employer (which shall thereafter be an additional or
substitute beneficiary of the covenants contained herein, as appropriate), with
the consent of Employee, such assignment shall be considered a condition of
employment by such new employer, and references to the "Company" in this
Agreement shall be deemed to refer to such new employer. If the Company is
merged with or into one of its subsidiaries or affiliates, such action shall not
be considered to cause an assignment of this Agreement, and the surviving or
successor entity shall become the beneficiary of this Agreement and all
references to the "Company" shall be deemed to refer to such surviving or
successor entity.
13. COMPLETE AGREEMENT WAIVER; AMENDMENT. This Agreement is not a
promise of future employment. Employee has no oral representations,
understandings, or agreements with the Company or any of its officers,
directors, or representatives covering the same subject matter as this
Agreement. This Agreement is the final, complete, and exclusive statement and
expression of the agreement between the Company and Employee with respect to the
subject matter hereof, and cannot be varied, contradicted, or supplemented by
evidence of any prior or contemporaneous oral or written agreements. This
written Agreement may not be later modified except by a further writing signed
by a duly authorized officer of the Company and Employee, and no term of this
Agreement may be waived except by a writing signed by the party waiving the
benefit of such term.
14. NOTICE. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To the Company: UniCapital Corporation
10800 Biscayne Boulevard
Miami, Florida 33161
Attention: Martin Kalb
To Employee: Edward A. Jaeckel
9630 N. W. 2nd Street
Unit 305
Pembroke Pines, Florida 33024
7
<PAGE> 8
Notice shall be deemed given and effective three days after the deposit in the
U.S. mail of a writing addressed as above and sent first class mail, certified,
return receipt requested, or, if sent by express delivery, hand delivery, or
facsimile, when actually received. Either party may change the address for
notice by notifying the other party of such change in accordance with this
Section 14.
15. SEVERABILITY; HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. This
severability provision shall be in addition to, and not in place of, the
provisions of Section 7(e) above. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.
16. EQUITABLE REMEDY. Because of the difficulty of measuring economic
losses to the Company as a result of a breach of the restrictive covenants set
forth in Sections 7, 8, 9 and 10, and because of the immediate and irreparable
damage that would be caused to the Company for which monetary damages would not
be a sufficient remedy, it is hereby agreed that in addition to all other
remedies that may be available to the at law or in equity, the Company shall be
entitled to specific performance and any injunctive or other equitable relief as
a remedy for any breach or threatened breach of the aforementioned restrictive
covenants.
17. ARBITRATION. Any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to, detract
from, or modify any provision hereof nor to award punitive damages to any
injured party. A decision by a majority of the arbitration panel shall be final
and binding. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The direct expense of any arbitration proceeding shall be
borne by the party or parties designated by the arbitration panel. Each party
shall bear its own counsel fees. The arbitration proceeding shall be held in
Miami, Florida. Notwithstanding the foregoing, the Company shall be entitled to
seek injunctive or other equitable relief, as contemplated by Section 16 above,
from any court of competent jurisdiction, without the need to resort to
arbitration.
18. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of the State of Florida, without giving effect to any
conflicts of laws principles thereof that would compel the application of the
substantive laws of any other jurisdiction.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed as of the date first written above.
UNICAPITAL CORPORATION
By: /s/ MARTIN KALB
--------------------------------------
Name: Martin Kalb
---------------------------------
Title: Executive Vice President
-------------------------------
EMPLOYEE:
/s/ EDWARD A. JAECKEL
- - --------------------------------------
EDWARD A. JAECKEL
9
<PAGE> 1
Exhibit 10.11(a)
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") is made and
entered into as of the 16th day of September, 1998 by and between UniCapital
Corporation, a Delaware corporation (the "Company"), and Jonathan New
("Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee entered into an Employment Agreement (the
"Agreement") dated May 20th, 1998; and
WHEREAS, the parties hereto desire to amend the Agreement in the manner
hereinafter set forth;
NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties intending to be bound legally, hereby agree as
follows:
1. Section 4.1 is hereby amended to read as follows:
"4.1 SALARY. The Employee shall receive an annual salary of Three
Hundred Thousand Dollars ($300,000.00) during the Term of this
Agreement, and such salary shall be payable in installments consistent
with the Company's normal payroll schedule commencing on either the
first or fifteenth day of the month, as the case may be, following the
Effective Date."
Except as otherwise provided in Section 1 hereof, all of the terms and
provisions of the Agreement shall remain unchanged.
IN WITNESS WHEREOF, the Company and Employee have caused this instrument to
be executed the day and year first above written.
UNICAPITAL CORPORATION:
By: /s/ THEODORE J. ROJENSKI
-------------------------------
Title: Chief Operating Officer
----------------------------
EMPLOYEE:
/s/ JONATHAN NEW
----------------------------------
Jonathan New
<PAGE> 1
Exhibit 21.01
<TABLE>
<CAPTION>
Subsidiaries
<S> <C> <C>
- - ---------------------------------------- ------------------------------------- -------------------------------------
SUBSIDIARY JURISDICTION OF ORGANIZATION D/B/A NAMES
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircorp II, Inc. Texas
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 347, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 373, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 11111, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 20527, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 20622, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 20624 and 20626, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 20627, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 21801, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 21805, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 21955, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 22055, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 22620, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 23345, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 23377, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 23455, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 23506, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 23772, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 23623, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 23830, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 23922, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 24474, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 24837, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 25221, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 26537, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 45775, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 46095, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 46941, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 48008, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 48009, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 49104, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 49176, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 49178, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 49262, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 49263, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 49368, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 49632, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Aircraft 53015, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
American Capital Resources New York NY American Capital Resources
- - ---------------------------------------- ------------------------------------- -------------------------------------
American Video Games and Computers, Missouri
Inc.
- - ---------------------------------------- ------------------------------------- -------------------------------------
Avalon Leasing Corporation Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
B&A Leasing Corporation Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Bionic Leasing Corporation Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Boulder Capital Group, Inc. Colorado
- - ---------------------------------------- ------------------------------------- -------------------------------------
Boulder Capital Mortgage Corporation Colorado
- - ---------------------------------------- ------------------------------------- -------------------------------------
Boulder Capital of New York, Inc. Colorado
- - ---------------------------------------- ------------------------------------- -------------------------------------
Cauff, Lippman Aviation, Inc. Florida UniCapital Air Group
- - ---------------------------------------- ------------------------------------- -------------------------------------
CLA Canada, Inc. Florida
- - ---------------------------------------- ------------------------------------- -------------------------------------
CLA-DOA, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
CLA Enterprises, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
CLA Holdings, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
CLA Support, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
CL Aircraft Marketing, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
CLC 747, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
CLC Engine Leasing, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
CL Aircraft VIII, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
CL Aircraft XXXIV, Inc. Florida
- - ---------------------------------------- ------------------------------------- -------------------------------------
ESN 721150, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
- - ---------------------------------------- ------------------------------------- -------------------------------------
European Aircraft Acquisition Corp. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Galaxy Aircraft Corp. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
HLC Financial, Inc. Delaware HLC Financial Service
- - ---------------------------------------- ------------------------------------- -------------------------------------
Information Control Systems, Inc. Missouri
- - ---------------------------------------- ------------------------------------- -------------------------------------
JJ Leasing, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
JT9 Engine Corp. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Jacom Computer Services, Inc. New York
- - ---------------------------------------- ------------------------------------- -------------------------------------
Jetz, Inc. Delaware Jetz of Delaware, Inc.
- - ---------------------------------------- ------------------------------------- -------------------------------------
Jumbo Jet, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Jumbo Jet Leasing, LP Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
K.L.C. Inc. Connecticut Keystone Leasing
K.L.C., Inc. Connecticut
K.L.C. Leasing
K.L.C. of Connecticut
Keystone K.L.C., Inc.
- - ---------------------------------------- ------------------------------------- -------------------------------------
Matcan International, Inc. Barbados
- - ---------------------------------------- ------------------------------------- -------------------------------------
Matcan Leasing, Inc. Utah
- - ---------------------------------------- ------------------------------------- -------------------------------------
Matrix Credit Corporation Utah
- - ---------------------------------------- ------------------------------------- -------------------------------------
Matrix Funding Corporation Utah
- - ---------------------------------------- ------------------------------------- -------------------------------------
Merrimac Financial Associates, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Municipal Capital Markets Group, Inc. Texas
- - ---------------------------------------- ------------------------------------- -------------------------------------
The Myerson Companies, Inc. Delaware BSB Leasing
- - ---------------------------------------- ------------------------------------- -------------------------------------
NSJ-DOA, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
The NSJ Group, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
NSJ Support, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
Portfolio Financial Servicing Company, Delaware
L.P.
- - ---------------------------------------- ------------------------------------- -------------------------------------
Saddleback Financial Corporation Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
SFC Capital Group Corporation Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
SLC International Trading Corporation Missouri
- - ---------------------------------------- ------------------------------------- -------------------------------------
Stuie II Corp. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
- - ---------------------------------------- ------------------------------------- -------------------------------------
Stuie III Corp. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
SWR Aircraft Group, Inc. Florida
- - ---------------------------------------- ------------------------------------- -------------------------------------
SWR 767, Inc. Florida
- - ---------------------------------------- ------------------------------------- -------------------------------------
SWR Brazil 767, Inc. Florida
- - ---------------------------------------- ------------------------------------- -------------------------------------
UCP GP SPE 1998-1 LLC Nevada
- - ---------------------------------------- ------------------------------------- -------------------------------------
UCP Operating SPE 1998-1 Limited Nevada
Partnership
- - ---------------------------------------- ------------------------------------- -------------------------------------
UCP Borrowing SPE 1998-1 Limited Nevada
Partnership
- - ---------------------------------------- ------------------------------------- -------------------------------------
UCP Qualifying SPE 1998-1 Limited Nevada
Partnership
- - ---------------------------------------- ------------------------------------- -------------------------------------
UniCapital Aircraft Engine Group, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
UniCapital Air Group, Inc. Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
UniCapital Funding Corporation Delaware
- - ---------------------------------------- ------------------------------------- -------------------------------------
UniCapital Operations Group, Inc. Delaware PFSC
Portfolio Financial Servicing Co.
Parrish Financial Servicing Co.
- - ---------------------------------------- ------------------------------------- -------------------------------------
UniCapital Rail Group
- - ---------------------------------------- ------------------------------------- -------------------------------------
UniCapital Technology Corporation UniCapital IT Solutions
- - ---------------------------------------- ------------------------------------- -------------------------------------
Varilease Canada Incorporated Nova Scotia
- - ---------------------------------------- ------------------------------------- -------------------------------------
Varilease Capital Corporation Michigan
- - ---------------------------------------- ------------------------------------- -------------------------------------
Varilease Corporation Michigan UniCapital IT Solutions
- - ---------------------------------------- ------------------------------------- -------------------------------------
The Walden Asset Group, Inc. Massachusetts
- - ---------------------------------------- ------------------------------------- -------------------------------------
</TABLE>
<PAGE> 1
Exhibit 23.01
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No.333-61353) of UniCapital Corporation of our report
dated February 3, 1999 appearing on page F-2 of UniCapital Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
Fort Lauderdale, Florida
March 31, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNICAPITAL
CORPORATION CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 9,772
<SECURITIES> 3,417
<RECEIVABLES> 424,747
<ALLOWANCES> 4,838
<INVENTORY> 79,897
<CURRENT-ASSETS> 0
<PP&E> 9,341
<DEPRECIATION> 908
<TOTAL-ASSETS> 1,669,523
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 51
<OTHER-SE> 817,237
<TOTAL-LIABILITY-AND-EQUITY> 1,669,523
<SALES> 365,306
<TOTAL-REVENUES> 510,930
<CGS> 318,383
<TOTAL-COSTS> 455,143
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 814
<INTEREST-EXPENSE> 35,453
<INCOME-PRETAX> 56,800
<INCOME-TAX> 32,007
<INCOME-CONTINUING> 24,793
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,793
<EPS-PRIMARY> 0.73
<EPS-DILUTED> 0.72
</TABLE>
