CREDIT AGREEMENT
DATED AS OF AUGUST 24, 2000
BY AND AMONG
EDO CORPORATION
AND
AIL SYSTEMS INC.
WITH
EUROPEAN AMERICAN BANK
AS ADMINISTRATIVE AGENT
AND
MELLON BANK, N.A.
AS DOCUMENTATION AGENT
AND
THE LENDERS PARTY HERETO
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . - 1 -
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . - 1 -
SECTION 1.02. Terms Generally. . . . . . . . . . . . . . .- 16 -
ARTICLE II
LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- 16 -
SECTION 2.01. Revolving Credit Loans . . . . . . . . . . .- 16 -
SECTION 2.02. Revolving Credit Note. . . . . . . . . . . .- 18 -
SECTION 2.03. Term Loan. . . . . . . . . . . . . . . . . .- 18 -
SECTION 2.04. Term Note. . . . . . . . . . . . . . . . . .- 18 -
SECTION 2.05. Letters of Credit. . . . . . . . . . . . . .- 19 -
ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . .- 22 -
SECTION 3.01. Interest Rate;
Continuation and Conversion of Loans. . . .- 22 -
SECTION 3.02. Use of Proceeds. . . . . . . . . . . . . . .- 24 -
SECTION 3.03. Optional Prepayments . . . . . . . . . . . .- 24 -
SECTION 3.04. Fees.. . . . . . . . . . . . . . . . . . . .- 25 -
SECTION 3.05. Inability to Determine Interest Rate. . . .- 26 -
SECTION 3.06. Illegality. . . . . . . . . . . . . . . . .- 26 -
SECTION 3.07. Increased Costs. . . . . . . . . . . . . . .- 26 -
SECTION 3.08. Indemnity. . . . . . . . . . . . . . . . . .- 28 -
SECTION 3.09. Taxes. . . . . . . . . . . . . . . . . . . .- 28 -
SECTION 3.10. Pro Rata Treatment and Payments. . . . . . .- 29 -
SECTION 3.11. Funding and Disbursement of Loans. . . . . .- 30 -
SECTION 3.12. Change of Lending Office . . . . . . . . . .- 31 -
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . .- 31 -
SECTION 4.01. Organization Powers. . . . . . . . . . . .- 31 -
SECTION 4.02. Authorization of Borrowing,
Enforceable Obligations . . . . . . . . . .- 31 -
SECTION 4.03. Financial Condition. . . . . . . . . . . . .- 32 -
SECTION 4.04. Taxes. . . . . . . . . . . . . . . . . . . .- 32 -
SECTION 4.05. Title to Properties. . . . . . . . . . . . .- 32 -
SECTION 4.06. Litigation . . . . . . . . . . . . . . . . .- 33 -
SECTION 4.07. Agreements.. . . . . . . . . . . . . . . . .- 33 -
SECTION 4.08. Compliance with ERISA. . . . . . . . . . . .- 33 -
SECTION 4.09. Federal Reserve Regulations;
Use of Proceeds . . . . . . . . . . . . . .- 33 -
SECTION 4.10. Approval . . . . . . . . . . . . . . . . . .- 34 -
SECTION 4.11. Subsidiaries.. . . . . . . . . . . . . . . .- 34 -
SECTION 4.12. Hazardous Materials. . . . . . . . . . . . .- 34 -
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SECTION 4.13. Investment Company Act . . . . . . . . . . .- 34 -
SECTION 4.14. Security Documents.. . . . . . . . . . . . .- 34 -
SECTION 4.15. No Default.. . . . . . . . . . . . . . . . .- 34 -
SECTION 4.16. Permits and Licenses.. . . . . . . . . . . .- 35 -
SECTION 4.17. No Other Ventures. . . . . . . . . . . . . .- 35 -
SECTION 4.18. Compliance with Law. . . . . . . . . . . . .- 35 -
SECTION 4.19. Non-Operating Subsidiaries . . . . . . . . .- 35 -
SECTION 4.20. Subordinated Debentures. . . . . . . . . . .- 35 -
ARTICLE V
CONDITIONS OF LENDING. . . . . . . . . . . . . . . . . . . . . .- 36 -
SECTION 5.01. Conditions to Initial Extension of Credit. .- 36 -
SECTION 5.02. Conditions to All Extensions of Credit . . .- 38 -
ARTICLE VI
AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . .- 39 -
SECTION 6.01. Existence, Properties, Insurance . . . . . .- 39 -
SECTION 6.02. Payment of Indebtedness and Taxes. . . . . .- 39 -
SECTION 6.03. Financial Statements, Reports, etc.. . . . .- 40 -
SECTION 6.04. Books and Records; Access to Premises. . . .- 41 -
SECTION 6.05. Notice of Adverse Change . . . . . . . . . .- 41 -
SECTION 6.06. Notice of Default. . . . . . . . . . . . . .- 42 -
SECTION 6.07. Notice of Litigation . . . . . . . . . . . .- 42 -
SECTION 6.08. Notice of Default in Other Agreements. . . .- 42 -
SECTION 6.09. Notice of ERISA Event. . . . . . . . . . . .- 42 -
SECTION 6.10. Notice of Environmental Law Violations.. . .- 42 -
SECTION 6.11. Compliance with Applicable Laws. . . . . . .- 43 -
SECTION 6.12. Subsidiaries . . . . . . . . . . . . . . . .- 43 -
SECTION 6.13. Environmental Laws.. . . . . . . . . . . . .- 43 -
SECTION 6.14. Interest Rate Protection . . . . . . . . . .- 43 -
ARTICLE VII
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . .- 44 -
SECTION 7.01. Liens. . . . . . . . . . . . . . . . . . . .- 44 -
SECTION 7.02. Indebtedness . . . . . . . . . . . . . . . .- 45 -
SECTION 7.03. Guaranties . . . . . . . . . . . . . . . . .- 46 -
SECTION 7.04. Sale of Assets . . . . . . . . . . . . . . .- 46 -
SECTION 7.05. Sales of Receivables.. . . . . . . . . . . .- 46 -
SECTION 7.06. Loans and Investments. . . . . . . . . . . .- 46 -
SECTION 7.07. Nature of Business.. . . . . . . . . . . . .- 47 -
SECTION 7.08. Sale and Leaseback.. . . . . . . . . . . . .- 47 -
SECTION 7.09. Federal Reserve Regulations. . . . . . . . .- 47 -
SECTION 7.10. Accounting Policies and Procedures . . . . .- 47 -
SECTION 7.11. Hazardous Materials. . . . . . . . . . . . .- 47 -
SECTION 7.12. Limitations on Fundamental Changes . . . . .- 47 -
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SECTION 7.13. Financial Covenants. . . . . . . . . . . . .- 48 -
SECTION 7.14. Subordinated Debt. . . . . . . . . . . . . .- 49 -
SECTION 7.15. Dividends. . . . . . . . . . . . . . . . . .- 49 -
SECTION 7.16. Transactions with Affiliates . . . . . . . .- 50 -
SECTION 7.17. Impairment of Security Interest. . . . . . .- 50 -
SECTION 7.18 Borrowing Base . . . . . . . . . . . . . . .- 50 -
SECTION 7.19 No Amendments . . . . . . . . . . . .- 50 -
ARTICLE VIII
EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . .- 51 -
SECTION 8.01. Events of Default. . . . . . . . . . . . . .- 51 -
ARTICLE IX
THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . .- 53 -
SECTION 9.01. Appointment, Powers and Immunities . . . . .- 53 -
SECTION 9.02. Reliance by Agents . . . . . . . . . . . . .- 54 -
SECTION 9.03. Events of Default. . . . . . . . . . . . . .- 54 -
SECTION 9.04. Rights as a Lender . . . . . . . . . . . . .- 55 -
SECTION 9.05. Indemnification. . . . . . . . . . . . . . .- 55 -
SECTION 9.06. Non-Reliance on Agents and Other Lenders . .- 55 -
SECTION 9.07. Failure to Act . . . . . . . . . . . . . . .- 56 -
SECTION 9.08. Resignation of Agents. . . . . . . . . . . .- 56 -
SECTION 9.09. Sharing of Collateral and Payments . . . . .- 56 -
ARTICLE X
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . .- 57 -
SECTION 10.01. Notices. . . . . . . . . . . . . . . . . . .- 57 -
SECTION 10.02. Effectiveness; Survival. . . . . . . . . . .- 58 -
SECTION 10.03. Indemnity and Expenses . . . . . . . . . . .- 58 -
SECTION 10.04. Amendments and Waivers . . . . . . . . . . .- 59 -
SECTION 10.05. Successors and Assigns; Participations . . .- 59 -
SECTION 10.06. No Waiver; Cumulative Remedies . . . . . . .- 62 -
SECTION 10.07. APPLICABLE LAW . . . . . . . . . . . . . . .- 63 -
SECTION 10.08. SUBMISSION TO JURISDICTION . . . . . . . . .- 63 -
SECTION 10.09. Severability . . . . . . . . . . . . . . . .- 63 -
SECTION 10.10. Right of Setoff. . . . . . . . . . . . . . .- 63 -
SECTION 10.11. Confidentiality.. . . . . . . . . . . .- 64 -
SECTION 10.12. Headings . . . . . . . . . . . . . . . . . .- 64 -
SECTION 10.13. Construction . . . . . . . . . . . . . . . .- 64 -
SECTION 10.14. Counterparts . . . . . . . . . . . . . . . .- 64 -
SECTION 10.15. JOINT AND SEVERAL OBLIGATIONS. . . . . . . .- 64 -
SCHEDULES
Schedule I - Subsidiaries
Schedule II - Existing Liens
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Schedule III - Existing Indebtedness
Schedule IV - Existing Guarantees
Schedule V - Non-Operating Subsidiaries
Schedule VI - Existing Letters of Credit
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Note
Exhibit C-1 - Form of Company Security Agreement
Exhibit C-2 - Form of Guarantor Security Agreement
Exhibit D - Form of Guaranty
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Opinion of Counsel
Exhibit G - Form of Assignment and Acceptance Agreement
Exhibit H - Form of Mortgage
Exhibit I - Form of Assignment of Leases and Rents
Exhibit J - Form of Intercreditor Agreement
Exhibit K-1 - Form of EDO and AIL Pledge Agreement
Exhibit K-2 - Form of Guarantor Pledge Agreement
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CREDIT AGREEMENT dated as of August 24, 2000, by and among EDO CORPORATION, a
New York corporation ("EDO"), AIL SYSTEMS INC., a Delaware corporation ("AIL"),
jointly and severally, (EDO and AIL, each a "Company" and collectively the
"Companies"), the LENDERS which from time to time are parties to this Agreement
(individually, a "Lender" and, collectively, the "Lenders") and EUROPEAN
AMERICAN BANK, a New York banking corporation as Administrative Agent for the
Lenders and MELLON BANK, N.A., a national banking association organized under
the laws of the United States of America, as Documentation Agent for the
Lenders.
RECITALS
The Companies have requested the Lenders to extend credit from time to time and
the Lenders are willing to extend such credit to the Companies, subject to the
terms and conditions hereinafter set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINITIONS. As used herein, the following words and terms
shall have the following meanings:
"Adjusted Libor Loans" shall mean Loans at such time as they are made and/or
being maintained at a rate of interest based upon Reserve Adjusted Libor.
"Administrative Agent" shall mean European American Bank in its capacity as
administrative agent for the Lenders under this Agreement or its successor
Administrative Agent permitted pursuant to Section 9.08.
"Affiliate" shall mean with respect to a specified Person, another Person
which, directly or indirectly, controls or is controlled by or is under common
control with such specified Person. For the purpose of this definition,
"control" of a Person shall mean the power, direct or indirect, to direct or
cause the direction of the management or policies of such Person whether
through the ownership of voting securities, by contract or otherwise; provided
that, in any event, any Person who owns directly or indirectly 15% or more of
the securities having ordinary voting power for the election of directors or
other governing body of a corporation or 15% or more of the partnership or
other ownership interest of any Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.
"Agents" shall mean, collectively, the Administrative Agent and the
Documentation Agent, and each, individually, an "Agent".
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"Aggregate Letters of Credit Outstandings" shall mean, at a particular time,
the sum of (a) the aggregate maximum stated amount at such time which is
available or available in the future to be drawn under all outstanding Letters
of Credit and (b) the aggregate amount of all payments made by the Issuing
Lender on behalf of the Lenders under any Letter of Credit that has not been
reimbursed by the Companies.
"Aggregate Outstandings" shall mean, at a particular time, the sum of (a) the
Aggregate Letters of Credit Outstandings and (b) the aggregate outstanding
principal amount of all Revolving Credit Loans at such time.
"Agreement" shall mean this Credit Agreement dated as of August 24, 2000, as it
may hereafter be amended, restated, supplemented or otherwise modified from
time to time.
"AIL" shall mean AIL Systems Inc., a Delaware corporation.
"AIL Property" shall mean the parcel of real estate owned by AIL, and the
improvements thereon, located at 455 Commack Road, Deer Park, New York and,
more particularly, described in the Mortgage.
"Applicable Margin" shall mean (a) with respect to Revolving Credit Loans, the
percentage set forth below under the heading "Revolving Credit Loans" opposite
the applicable ratio, (b) with respect to Term Loans the percentage set forth
below under the heading "Term Loan" opposite the applicable ratio and (c) with
respect to calculation of the Letter of Credit fees payable pursuant to Section
3.04(b), the percentage set forth below under the heading "Letter of Credit".
Consolidated Revolving Term Letters of
Leverage Credit Loans Loans Credit
Ratio (360 day basis) (360 day basis) (360 day basis)
Greater than or equal 1.75% 2.00% 1.50%
to 2:00:1.00
Less than 2.00:1.00 1.50% 1.75% 1.25%
but greater than or
equal to 1:00:1.00
Less than 1.00:1.00 1.25% 1.50% 1.00%
Notwithstanding the foregoing, during the period commencing on the Closing Date
and ending on the date of reset of the Applicable Margin in accordance with
this paragraph the Applicable Margin shall be based on a Consolidated Leverage
Ratio of 2.00:1.00. The Applicable Margin will be set or
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reset with respect to each Loan on the date which is fifteen (15) days
following the date of receipt by the Administrative Agent of the financial
statements referred to in Section 6.03(a) and Section 6.03(c) together with a
certificate of the Chief Financial Officer of each Company certifying the
Consolidated Leverage Ratio and setting forth the calculation thereof in
detail; provided, however, (a) the Applicable Margin will first be reset based
on the financial statements for the fiscal quarter ending September 30, 2001,
and (b) if any such financial statement and certificate are not received by the
Administrative Agent within the time period required pursuant to Section
6.03(a) or Section 6.03(b), as the case may be, the Applicable Margin will be
set or reset, based on a Consolidated Leverage Ratio of greater than 2.00:1.00
from the date such financial statements and certificate were due until the date
which is fifteen (15) days following the receipt by the Administrative Agent of
such financial statements and certificate. The Lenders shall not in any way be
deemed to have waived any Default or Event of Default, including without
limitation, an Event of Default resulting from the failure of the Companies to
comply with Section 7.13 of this Agreement, or any rights or remedies hereunder
or under any other Loan Document in connection with the foregoing proviso.
During the occurrence and continuance of an Event of Default, no downward
adjustment, and only upward adjustments, shall be made to the Applicable
Margin.
"ASI ESOP" shall mean the AIL Systems Inc. Employee Stock Plan dated January
1, 1989, as amended.
"ASI ESOT" shall mean the trust created under the ASI ESOP.
"Assignment and Acceptance Agreement" shall mean an Assignment and Acceptance
entered into by a Lender and an assignee and accepted by the Administrative
Agent, in the form attached hereto as Exhibit G or any other form approved by
the Administrative Agent.
"Assignment of Leases and Rents" shall mean the Amended and Restated Assignment
of Leases and Rents with respect to the AIL Property in the form attached
hereto as Exhibit I, as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"ATI ESOP" shall mean AIL Technologies Inc. Employee Stock Ownership Plan
dated September 30, 1997.
"ATI ESOP Loan" shall mean the loan in the original principal amount of
$16,844,012 funded on September 30, 1997 pursuant to the terms of the ATI ESOP
Loan Agreement.
"ATI ESOT" shall mean the AIL Technologies Inc. Employee Stock Ownership Trust
dated September 30, 1997.
"ATI Loan Agreement" shall mean the agreement dated September 30, 1997 by and
between AIL and the ATI ESOT governing the terms and conditions of the ATI ESOP
Loan.
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"Available Revolving Credit Commitment" shall mean the Total Revolving Credit
Commitment reduced by the Aggregate Outstandings.
"Borrowing Base" shall mean an amount equal to the sum of (a) the consolidated
inventory of EDO and its Subsidiaries as reflected on the books and records of
EDO and its Subsidiaries, net of reserves and net of obsolete or unmerchantable
inventory, (b) the consolidated receivables of EDO and its Subsidiaries with
respect to goods shipped or work performed, which has not been and is not
required to be charged off or written off as uncollectible in accordance with
Generally Accepted Accounting Principles or with the customary business
practices of the Companies, and (c) the aggregate cash and Eligible Investments
of EDO and its Subsidiaries.
"Borrowing Base Certificate" shall mean the Borrowing Base Certificate in the
form set forth as Exhibit E attached hereto.
"Borrowing Date" shall mean, with respect to any Loan, the date on which such
Loan is disbursed to the applicable Company.
"Business Day" shall mean (a) any day not a Saturday, Sunday or legal holiday,
on which banks in New York City are open for business and (b) as it relates to
any payment, determination, funding or notice to be made or given in connection
with any Adjusted Libor Loan, any day specified in clause (a) on which trading
is carried on by and between banks in Dollar deposits in the London interbank
eurodollar market.
"Capital Expenditures" shall mean additions to property and equipment of EDO
and its Subsidiaries which, in conformity with Generally Accepted Accounting
Principles, are included as "additions to property, plant or equipment" or
similar items which would be reflected in the Consolidated statement of cash
flow of EDO and its Subsidiaries, including without limitation, property and
equipment which are the subject of Capital Leases.
"Capital Lease" shall mean any lease the obligations of which are required to
be capitalized on the balance sheet of EDO and its Subsidiaries in accordance
with Generally Accepted Accounting Principles.
"Cash Collateral" shall mean the pledge and deposit with the Administrative
Agent for the benefit of the Agents and the Lenders, as collateral for the
Obligations, cash or deposit account balances pursuant to documentation in form
and substance satisfactory to the Administrative Agent.
"Chief Financial Officer" shall mean the Chief Financial Officer of EDO.
"Closing Date" shall mean August 24, 2000.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.
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"Commitment Proportion" shall mean, with respect to each Lender at the time of
determination thereof the ratio, expressed as a percentage, which such Lender's
commitments bear to the Total Commitment or if the Commitments have expired or
have been terminated, the ratio, expressed as a percentage, which the aggregate
principal amount of the Loans outstanding of such Lender bears to the Aggregate
Outstandings plus the aggregate principal amount of Term Loans outstanding at
such time.
"Commitments" shall mean, collectively, the Revolving Credit Commitments and
the Term Loan Commitments.
"Company" and "Companies" shall have the meaning set forth in the preamble
hereto.
"Consolidated" or "Consolidating" shall mean, as applied to any financial or
accounting term, such term determined on a consolidated basis, or consolidating
basis, in accordance with Generally Accepted Accounting Principles applied on a
consistent basis for EDO and its Subsidiaries.
"Consolidated EBIT" shall mean for any period, Consolidated Net Income (or net
loss) for such period, plus to the extent deducted in determining Consolidated
Net Income, the sum of (a) Consolidated Interest Expense, (b) all income taxes
to any government or governmental instrumentality (whether paid or accrued),
(c) restructuring charges incurred in EDO's fiscal year ending December 31,
2000, (d) non-cash restructuring charges incurred in EDO's fiscal year ending
December 31, 2001 and (e) non-cash expenses pertaining to the ESOPS, in each
case, determined on a Consolidated basis for EDO and its Subsidiaries in
accordance with Generally Accepted Accounting Principles applied on a
consistent basis. All of the foregoing categories shall be calculated (without
duplication) over the four fiscal quarters next preceding the date of
calculation thereof.
"Consolidated EBITDA" shall mean for any period, Consolidated Net Income (or
net loss) for such period, plus to the extent deducted in determining
Consolidated Net Income, the sum of (a) Consolidated Interest Expense, (b)
depreciation and amortization expenses and charges and (c) all income taxes to
any government or governmental instrumentality (whether paid or accrued), (d)
restructuring charges incurred in EDO's fiscal year ending December 31, 2000,
(e) non-cash restructuring charges incurred in EDO's fiscal year ending
December 31, 2001 and (f) non-cash expenses pertaining to the ESOPS, in each
case, determined on a Consolidated basis for EDO and its Subsidiaries in
accordance with Generally Accepted Accounting Principles applied on a
consistent basis. All of the foregoing categories shall be calculated (without
duplication) over the four fiscal quarters next preceding the date of
calculation thereof.
"Consolidated Fixed Charge Coverage Ratio" shall mean for any period (a)
Consolidated EBITDA less Consolidated Capital Expenditures divided by (b) the
sum of (i) the current portion of long term indebtedness (including obligations
under Capital Leases), (ii) Consolidated Interest Expense, (iii) all income
taxes to any government or governmental instrumentality paid and (iv) all
dividends and distributions made with respect to outstanding stock of EDO, in
each case determined
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on a consolidated basis for EDO and its Subsidiaries in accordance with
Generally Accepted Accounting Principles applied on a consistent basis. All
the foregoing categories shall be calculated (without duplication) over the
four fiscal quarters next preceding the date of calculation thereof.
"Consolidated Interest Expense" shall mean the consolidated gross interest
expense of EDO and its Subsidiaries determined in accordance with Generally
Accepted Accounting Principles, applied on a consistent basis and shall be
calculated over the four fiscal quarters next preceding the date of calculation
thereof.
"Consolidated Leverage Ratio" shall mean the ratio of (a) the total
Consolidated Indebtedness less Subordinated Debt to (b) Consolidated EBITDA.
"Consolidated Net Income" shall mean, for any period, the consolidated net
income (or net loss) of EDO and its Subsidiaries for such period determined in
accordance with Generally Accepted Accounting Principles applied on a
consistent basis.
"Consolidated Tangible Net Worth" shall mean (i) total consolidated assets of
EDO and its Subsidiaries determined in accordance with Generally Accepted
Accounting Principles applied on a consistent basis, except that there shall be
excluded therefrom all intangible assets, including, without limitation,
customer lists, organizational expenses, patents, trademarks, copyrights
goodwill, covenants not to compete, research and development costs, training
costs, and all unamortized debt discount, prepaid expenses and deferred
charges, less (ii) the total consolidated liabilities of EDO and its
Subsidiaries determined in accordance with Generally Accepted Accounting
Principles applied on a consistent basis.
"Consolidated Total Unsubordinated Liabilities" shall mean all items which, in
accordance with Generally Accepted Accounting Principles applied on a
consistent basis, would properly be included on the liabilities side of the
balance sheet other than Subordinated Debt (excluding the current portion
thereof to the extent permitted to be paid hereunder) capital stock, capital
surplus and retained earnings), as of the date on which the amount of
Consolidated Total Unsubordinated Liabilities is to be determined, of EDO and
its Subsidiaries. . "Default" shall mean any condition or event which upon
notice, lapse of time or both would constitute an Event of Default.
"Documentation Agent" shall mean Mellon Bank, N.A. in its capacity as
Documentation Agent or its successor Documentation Agent permitted pursuant to
Section 9.08.
"Dollar" and the symbol "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiary" shall mean any Subsidiary of EDO which is organized under
the laws of any state or territory of the United States of America.
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"EDO" shall mean EDO Corporation, a New York corporation.
"EDO ESOP" shall mean the EDO Corporation Employee Stock Ownership Plan.
"EDO ESOT" shall mean the trust established under the EDO ESOP.
"EDO ESOP Loan" shall mean the loan in the original principal amount of
$19,185,399 funded on July 22, 1988 pursuant to the terms of the EDO ESOP Loan
Agreement.
"EDO ESOP Loan Agreement" shall mean the Term Loan Agreement dated as of July
22, 1988 between Bank of New York, as successor trustee to Irving Trust Company
and Mellon Bank, N.A., as successor in interest to Fleet Bank, N.A., successor
in interest to Manufacturers Hanover Trust Company, as amended and each of the
notes, guaranties and other documents executed in connection therewith.
"Eligible Investments" shall mean (a) direct obligations of the United States
of America or any governmental agency thereof which are fully guaranteed by the
United States of America, provided that such obligations mature within one year
from the date of acquisition thereof; or (b) dollar denominated certificates of
time deposit maturing within one year issued by any Lender or by any commercial
bank organized and existing under the laws of the United States or any state
thereof and having aggregate capital and surplus in excess of $1,000,000,000 or
issued by any Lender; or (c) money market mutual funds having assets in excess
of $2,500,000,000; or (d) commercial paper rated not less than P-1 or A-1 or
their equivalent by Moody's Investor Services, Inc. or Standard & Poor's
Ratings Group, respectively; or (e) tax exempt securities of a U.S. issuer
rated A or better by Standard and Poor's Ratings Group or Moody's Investor
Services, Inc.
"Environmental Law" shall mean any law, ordinance, rule, regulation, or policy
having the force of law of any Governmental Authority relating to pollution or
protection of the environment or to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Materials,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601,
et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801, et seq.) the Resource Conservation and Recovery Act, as amended
(42 U.S.C. Sections 6901, et seq.) and the rules and regulations promulgated
pursuant thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of ERISA)
which together with any Company or any Subsidiary of EDO would be deemed to be
a member of the same "controlled group" within the meaning of Section 414(b),
(c), (m) or (o) of the Code.
"ESOP Loans" shall mean, collectively, the ATI ESOP Loan and the EDO ESOP Loan.
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"ESOP Loan Agreements" shall mean, collectively, the EDO ESOP Loan Agreement
and the AIL ESOP Loan Agreement.
"ESOPS" shall mean, collectively, the EDO ESOT, the ATI ESOT and the ASI ESOT.
"Eurocurrency Reserve Requirement" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves, under any regulations of the Board of Governors of the Federal
Reserve System or any other governmental authority having jurisdiction with
respect thereto) as from time to time in effect, dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"eurocurrency liabilities" in Regulation D) maintained by any bank.
"Event of Default" shall have the meaning set forth in Article VIII.
"Executive Officer" shall mean any of the President, the Chief Financial
Officer or the Secretary of any Company, or any Guarantor, as applicable and
their respective successors, if any, designated by the board of directors.
"Existing Letters of Credit" shall mean the Standby Letters of Credit issued by
Mellon Bank, N.A. for the account of EDO prior to the date hereof as set forth
on Schedule VI.
"Existing Loans" shall mean, collectively, the ESOP Loan, the Term Loan and the
Acquisition Loan (as those terms are defined in the Original AIL Agreement).
"Existing Secondary Revolving Credit Loans" shall have the meaning assigned to
the term "Secondary Revolving Credit Loans" in the Original AIL Agreement.
"Federal Funds Effective Rate"shall mean, for any day, the rate per annum 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,
as published for such day (or if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so announced or published for any day which is a Business Day, the
Federal Funds Rate for the last day on which such rate was announced or
published.
"Foreign Subsidiary" shall mean any Subsidiary of EDO other than a "Domestic
Subsidiary".
"Generally Accepted Accounting Principles" shall mean those generally accepted
accounting principles in the United States of America, as in effect from time
to time.
"Governmental Authority" shall mean any nation or government, any state,
province, city or municipal entity or other political subdivision thereof, and
any governmental, executive, legislative,
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judicial, administrative or regulatory agency, department, authority,
instrumentality, commission, board or similar body, whether federal, state,
provincial, territorial, local or foreign.
"Guarantor" shall mean AIL Technologies Inc., a Delaware corporation, American
Nucleonics Corporation, a California corporation, EDO Western Corporation, a
Utah corporation, EDO Sports Inc., a Delaware corporation, Astro Optics
Laboratory, Inc., a California corporation, EDO International Corporation, a
Delaware corporation, EDO Energy Corporation, a Delaware corporation, EDO
Automotive Natural Gas Inc., a Delaware corporation, Specialty Plastics, Inc.,
a Louisiana corporation, EDO Acquisition II, Inc., a Delaware corporation, M.
Technologies, Inc., a Pennsylvania corporation, Dorne & Margolin, Inc., a
Delaware corporation, EDO Foreign Sales Corporation, a U.S. Virgin Islands
corporation, each other Subsidiary of EDO existing on the Closing Date (other
than EDO Canada, Ltd.) and each Person required to execute a Guaranty in
accordance with Section 6.13.
"Guaranty" shall mean the Guaranty substantially in the form of Exhibit D
attached hereto to be executed and delivered on the Closing Date by each
Guarantor and, thereafter, by any Person who may be required to execute the
same pursuant to Section 6.13, as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Hazardous Materials" shall mean any explosives, radioactive materials, or
other materials, wastes, substances, or chemicals regulated as toxic, hazardous
or as a pollutant, contaminant or waste under any applicable Environmental Law.
"Hedging Agreement" shall mean any interest rate swap, collar, cap, floor or
forward rate agreement or other agreement regarding the hedging of interest
rate risk exposure executed in connection with hedging the interest rate
exposure of a Person, and any confirming letter executed pursuant to such
agreement, all as amended, supplemented, restated or otherwise modified from
time to time.
"Indebtedness" shall mean, without duplication, as to any Person or Persons (a)
indebtedness for borrowed money; (b) indebtedness for the deferred purchase
price of property or services; (c) indebtedness evidenced by bonds, debentures,
notes or other similar instruments; (d) obligations and liabilities secured by
a Lien upon property owned by such Person, whether or not owing by such Person
and even though such Person has not assumed or become liable for the payment
thereof; (e) obligations and liabilities directly or indirectly guaranteed by
such Person; (f) obligations or liabilities created or arising under any
conditional sales contract or other title retention agreement with respect to
property used and/or acquired by such Person; (g) obligations of such Person as
lessee under Capital Leases; (h) net liabilities of such Person under Hedging
Agreements and foreign currency exchange agreements, as calculated on a basis
satisfactory to the Administrative Agent and in accordance with accepted
practice; (i) all obligations, contingent or otherwise of such Person as an
account party or applicant in respect of letters of credit; and (j) all
obligations of such Person in respect of bankers' acceptance.
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"Intercreditor Agreement" shall mean the Intercreditor Agreement substantially
in the form attached hereto as Exhibit J to be executed by the Administrative
Agent, Mellon Bank, N.A. and the Companies (as the same may be amended,
restated, supplemented or otherwise modified from time to time).
"Interest Payment Date" shall mean (a) as to any Loan, the last day of each
September, December, March and June and (c) as to any Loan, the date such Loan
is paid in full or in part.
"Interest Period" shall mean with respect to any Adjusted Libor Loan:
(a) initially, the period commencing on the date such Adjusted Libor Loan is
made and ending one, two or three months thereafter, as selected by the
Companies in their joint notice of borrowing or in their notice of conversion
from a Prime Rate Loan provided, in each case, in accordance with the terms
of Articles II and III hereof; and
(b) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Adjusted Libor Loan and ending one, two or
three months thereafter, as selected by the Companies by irrevocable written
notice to the Administrative Agent not later than 11:00 a.m. New York, New
York time three Business Days prior to the last day of the then current
Interest Period with respect to such Adjusted Libor Loan; provided, however,
that all of the foregoing provisions relating to Interest Periods are subject
to the following:
(i) if any Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) if the Companies shall fail to give notice as provided in clause (b)
above, the Companies shall be deemed to have requested conversion of the
affected Adjusted Libor Loan to a Prime Rate Loan on the last day of the
then current Interest Period with respect thereto;
(iii) any Interest Period that 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) the Companies shall select Interest Periods so as not to require a
payment or prepayment of any Adjusted Libor Loan during an Interest Period
for such Adjusted Libor Loan; and
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(v) no more than six (6) Interest Periods with respect to the Loans may
exist at any one time.
"Issuing Lender" shall mean Mellon Bank, N.A., in its capacity as the issuer of
Letters of Credit hereunder or its successor Issuing Lender permitted pursuant
to Section 2.05(e).
"LC Disbursement" shall mean a payment made by the Issuing Lender pursuant to a
Letter of Credit.
"LC Exposure" shall mean, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by
or on behalf of the Companies at such time.
"Lenders" shall have the meaning set forth in the preamble hereto.
"Lending Office" shall mean for each Lender, the office specified under such
Lender's name on the signature pages hereof with respect to each Type of Loan,
or such other office as such Lender may designate in writing from time to time
to the Companies and the Administrative Agent with respect to such Type of
Loan.
"Letter of Credit" shall mean any Standby Letter of Credit issued by the
Issuing Bank for the account of the Companies pursuant to the terms of this
Agreement or deemed a "Letter of Credit" hereunder pursuant to Section 2.05(f)
of this Agreement.
"Lien" shall mean any lien (statutory or otherwise), security interest,
mortgage, deed of trust, pledge, charge, conditional sale, title retention
agreement, Capital Lease or other encumbrance or similar right of others, or
any agreement to give any of the foregoing.
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Security Documents, the Guaranties, the Intercreditor Agreement, the Pledge
Agreement and each other agreement executed in connection with the transactions
contemplated hereby or thereby, as each of the same may hereafter be amended,
restated, supplemented or otherwise modified from time to time.
"Loans" shall mean, collectively, the Revolving Credit Loans and the Term
Loans.
"Material Adverse Effect" shall mean a material adverse effect upon (a) the
business, operations, prospects, assets or condition, financial or otherwise,
of the Companies and the Guarantors taken as a whole or (b) the ability of any
Company or any Guarantor to perform in any material respect its obligations
under any Loan Document to which it is a party.
"Mortgage" shall mean the Amended and Restated Mortgage and Security Agreement,
with respect to the AIL Property, in the form attached hereto as Exhibit H, as
the same may be amended, restated, supplemented or otherwise modified from time
to time.
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"Non-Operating Subsidiaries" shall mean those Subsidiaries of EDO identified on
Schedule V attached hereto.
"Notes" shall mean, collectively, the Revolving Credit Notes and the Term
Notes.
"Obligations" shall mean all obligations, liabilities and indebtedness of each
Company to the Lenders and the Agents, whether now existing or hereafter
created, absolute or contingent, direct or indirect, due or not, whether
created directly or acquired by assignment or otherwise, arising under or
relating to this Agreement, the Notes or any other Loan Document including,
without limitation, all obligations, liabilities and indebtedness of the
Companies with respect to the principal of and interest on the Loans, with
respect to reimbursement of drawings under Letters of Credit and all fees,
costs, expenses and indemnity obligations of the Companies and the Agents
hereunder, or under any other Loan Document. The Obligations of the Companies
shall be joint and several.
"Original AIL Agreement" shall mean the Credit Agreement dated as of September
30, 1997 by and among AIL, European American Bank, as Agent and as a Lender,
and the lenders party thereto, as amended from time to time prior to the date
hereof.
"Original EDO Agreement" shall mean the Credit Agreement dated as of September
9, 1998 by and among EDO Corporation, Mellon Bank, N.A., as Agent, and the
lenders party thereto, as amended from time to time prior to the date hereof.
"Original Agreements" shall mean, collectively, the Original AIL Agreement and
the Original EDO Agreement.
"Participant" shall have the meaning set forth in Section 10.05.
"Participation" shall have the meaning set forth in Section 10.05.
"Payment Office" shall mean with respect to the Administrative Agent, its
office located at EAB Plaza, Uniondale, New York 11555 or such other office as
the Administrative Agent may designate from time to time and, with respect to
the Issuing Bank, its office located at 176 EAB Plaza, Uniondale, New York
11556-0176 or such other office as the Issuing Bank may designate from time to
time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean the acquisition by a Company or any
Guarantor of all or substantially all of the assets or stock of any Person, or
part thereof, whose principal businesses are substantially similar to the
principal businesses of such Company or such Guarantor, provided (i) each
Lender shall have received notice of the proposed acquisition which notice
shall contain a detailed description of the proposed transaction, including the
target's name, structure of the transaction and
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the purchase price and all other consideration payable in connection therewith,
(ii) such acquisition has either been approved by the Board of Directors of the
corporation which is the subject of the acquisition or recommended for approval
by such board to the shareholders of such corporation and subsequently approved
by the shareholders of such corporation as required under applicable law or the
by-laws and certificate of incorporation of such corporation, (iii) no Default
or Event of Default shall have occurred and be continuing or would occur
immediately after giving effect to the proposed acquisition, (iv) each Lender
shall have received unaudited pro forma consolidated financial statements of
EDO and its subsidiaries for the then most recent twelve month period ended
after giving effect to the acquisition and such other information with respect
to the proposed acquisition as the Lender may reasonably request, (v) the
entity which is the subject of the acquisition shall have a net worth
calculated in accordance with Generally Accepted Accounting Principles as
determined by the then most recent financial statements of such entity in
excess of zero, (vi) Lenders having not less than seventy-five (75%) percent of
the Total Commitments shall have approved the proposed acquisition prior to
consummation thereof, which approval may be withheld despite compliance with
the other conditions set forth in this Section 5.02 and (vii) after giving
effect to such acquisition, the aggregate portion of the purchase price and
consideration for all Permitted Acquisitions funded with Loans hereunder shall
not exceed $20,000,000.
"Permitted Liens" shall mean the Liens specified in clauses (a) through (i) of
Section 7.01.
"Person" shall mean any natural person, corporation, limited liability company,
limited liability partnership, business trust, joint venture, association,
company, partnership or Governmental Authority.
"Plan" shall mean any multi-employer or single-employer plan defined in Section
4001 of ERISA, which covers, or at any time during the five calendar years
preceding the date of this Agreement covered, employees of any Company, any
Guarantor or an ERISA Affiliate on account of such employees' employment by
such Company, such Guarantor or an ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement substantially in the form
attached hereto as Exhibit K-1 and K-2 to be executed by EDO, each Subsidiary
of EDO which owns shares or interests in any other Subsidiary of EDO,
respectively, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Prime Rate" shall mean the rate per annum announced by the Administrative
Agent from time to time as its prime rate in effect at its principal office.
Each change in the Prime Rate shall be effective on the date such change is
announced to become effective.
"Prime Rate Loans" shall mean Loans at such times as they are being made and/or
maintained at a rate of interest based on the Prime Rate.
"Regulation D" shall mean Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
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"Reportable Event" shall mean an event described in Section 4043(c) of ERISA
with respect to a Plan as to which the 30 day notice requirement has not been
waived by the PBGC.
"Required Lenders" shall mean Lenders owed at least 66 2/3 % of the sum of the
Aggregate Outstandings and the Term Loans or, if no Revolving Credit Loans or
Term Loans are outstanding, Lenders having at least 66 2/3% of the Total
Revolving Credit Commitment.
"Reserve Adjusted Libor" shall mean, with respect to the Interest Period
pertaining to an Adjusted Libor Loan, the rate per annum equal to the product
(rounded upwards to the next higher 1/16 of one percent) of (a) the annual rate
of the interest for Dollar deposits of an amount comparable to the amount of
such Loan and for a period equal to the Interest Period applicable thereto
which appears on Telerate Page 3750 as of 11:00 A.M. (London time) on the
second Business Day prior to the commencement of such Interest Period,
multiplied by (b) the Eurocurrency Reserve Requirement.
"Revolving Credit Commitment" shall mean, with respect to each Lender, the
obligation of such Lender to make Revolving Credit Loans to the Companies in an
aggregate amount not to exceed the amount set forth opposite such Lender's name
on the signature pages hereof under the caption "Revolving Credit Commitment,"
as such amounts may be adjusted in accordance with the terms of this Agreement.
"Revolving Credit Commitment Period" shall mean the period from and including
the Closing Date to, but not including, the Revolving Credit Commitment
Termination Date or such earlier date as the Revolving Credit Commitment shall
terminate as provided herein.
"Revolving Credit Commitment Termination Date" shall mean the fifth anniversary
of the Closing Date.
"Revolving Credit Loans" shall have the meaning set forth in Section 2.01(a).
"Revolving Credit Notes" shall have the meaning set forth in Section 2.02.
"Security Agreements" shall mean the Security Agreements in the form attached
as Exhibit C-1 and Exhibit C-2 to be executed and delivered on the Closing Date
by each Company and the Guarantors, respectively, as each of the same may be
amended, restated, supplemented or otherwise modified, from time to time.
"Security Documents" shall mean, collectively, the Security Agreements, the
Mortgage, the Assignment of Leases and Rents and each other collateral security
document delivered to the Administrative Agent hereunder.
"Solvent" shall mean with respect to any Person as of the date of determination
thereof that (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date,
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exceed the amount of all "liabilities of such Person, contingent or otherwise,"
as of such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the insolvency of
debtors, (b) the present fair saleable value of the assets of such Person will,
as of such date, be greater than the amount that will be required on its debts
as such debts become absolute and matured, (c) such Person will not have as of
such date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature.
"Subordinated Debentures" shall mean the 7% Convertible Subordinated Debentures
due December 15, 2011 issued pursuant to an indenture dated November 15, 1986,
between EDO and The Chase Manhattan Bank, as successor to Manufacturers Hanover
Trust Company in the original principal amount of $40,250,000, of which
$26,250,000 remains outstanding on the date of this Agreement.
"Subordinated Debt" or "Subordinated Indebtedness" shall mean all debt which is
subordinated in right of payment to the prior final and indefeasible payment in
full of the obligations of the Companies and the Guarantors to the Lenders
hereunder and under any other Loan Document on terms satisfactory to and
approved in writing by the Required Lenders.
"Standby Letter of Credit" shall mean a letter of credit issued to support an
obligation of a Person and which may be drawn on only upon the failure of such
Person to perform such obligation or other contingency.
"Subsidiaries" shall mean, with respect to any Person, any corporation,
association or other business entity more than 50% of the voting stock or other
ownership interests (including, without limitation, membership interests in a
limited liability company) of which is at the time owned or controlled,
directly or indirectly, by such Person or one or more of its Subsidiaries or a
combination thereof.
"Taxes" shall have the meaning set forth in Section 3.09.
"Telerate Page 3750" shall mean the display designated as "Page 3750" on the
Associated Press-Dow Jones Telerate Service (or such other page as may replace
Page 3750 on the Associated Press-Dow Jones Telerate Service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
interest settlement rates for Dollar deposits). Each Reserve Adjusted Libor
rate determined on the rate displayed on Telerate Page 3750 shall be subject to
corrections, if any, made in such rate and displayed by the Associated
Press-Dow Jones Telerate Service within one hour of the time when such rate is
first displayed by such service.
"Term Loans" shall have the meaning set forth in Section 2.03.
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"Term Loan Commitment" shall mean, with respect to each Lender, the obligation
of such Lender to make a Term Loan to the Companies in an amount not to exceed
the amount set forth opposite such Lender's name on the signature pages hereof
under the caption "Term Loan Commitment".
"Term Loan Maturity Date" shall mean June 30, 2005.
"Term Note" shall have the meaning set forth in Section 2.04.
"Total Commitments" shall mean, at any time, the aggregate of the Commitments
in effect at such time which, initially shall be $69,000,000.
"Total Revolving Credit Commitment" shall mean, at any time, the aggregate of
the Revolving Credit Commitments in effect at such time which, initially, shall
be $50,000,000.
"Type" shall mean as to any Loan its status as a Prime Rate Loan or an Adjusted
Libor Loan.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the present value of the accrued benefits under the Plan as of the close
of its most recent plan year exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
SECTION 1.02. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and the neuter. Except as
otherwise herein specifically provided, each accounting term used herein shall
have the meaning given to it under Generally Accepted Accounting Principles.
The term "including" shall not be limited or exclusive, unless specifically
indicated to the contrary. The word "will" shall be construed to have the same
meaning in effect as the word "shall". The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole, including the exhibits and schedules hereto, all of which are by this
reference incorporated into this Agreement.
ARTICLE II
LOANS
SECTION 2.01. REVOLVING CREDIT LOANS. (a) Subject to the terms and
conditions, and relying upon the representations and warranties, set forth
herein, each Lender severally agrees to make loans (individually a "Revolving
Credit Loan" and, collectively, the "Revolving Credit Loans") to the Companies
from time to time during the Revolving Credit Commitment Period, up to but not
exceeding at any one time outstanding the amount of its Revolving Credit
Commitment; provided, however, that no Revolving Credit Loan shall be made if,
after giving effect to such Revolving Credit Loan, the aggregate outstanding
principal amount of all Revolving Credit Loans would exceed the lesser of (x)
the Total Revolving Credit Commitment in effect at such time and (y) the
Borrowing
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Base. During the Revolving Credit Commitment Period, the Companies may from
time to time borrow, repay and reborrow hereunder on or after the date hereof
and prior to the Revolving Credit Commitment Termination Date, subject to the
terms, provisions and limitations set forth herein. The Revolving Credit Loans
may be (i) Adjusted Libor Loans, (ii) Prime Rate Loans or (iii) a combination
thereof.
(b) The Companies shall give the Administrative Agent irrevocable written
notice (or telephonic notice promptly confirmed in writing) not later than
11:00 a.m., New York, New York time, three Business Days prior to the date of
each proposed Adjusted Libor Loan under this Section 2.01 or prior to 11:00
a.m. New York, New York time on the date of each proposed Prime Rate Loan
under this Section 2.01. Such notice shall be irrevocable and shall specify
(i) the amount and Type of the proposed borrowing, (ii) the initial Interest
Period if an Adjusted Libor Loan, and (iii) the proposed Borrowing Date. Upon
receipt of such notice from the Companies, the Administrative Agent shall
promptly notify each Lender thereof. Except for borrowings which utilize the
full remaining amount of the Total Revolving Credit Commitment, each borrowing
of a Prime Rate Loan shall be in an amount not less than $250,000 or, if
greater, whole multiples of $100,000 in excess thereof. Each borrowing of an
Adjusted Libor Loan shall be in an amount not less than $1,000,000 or whole
multiples of $500,000 in excess thereof.
(c) The Companies shall have the right, upon not less than three Business Days'
prior written notice to the Administrative Agent to terminate the Total
Revolving Credit Commitment or from time to time to permanently reduce the
amount of the Total Revolving Credit Commitment; provided, however, that no
such termination or reduction shall be permitted if, after giving effect
thereto and to any prepayments of the Revolving Credit Loans made on the
effective date thereof, the Aggregate Outstandings would exceed the lesser of
(x) the Total Revolving Credit Commitment as then reduced and (y) the Borrowing
Base; provided, further, that any such termination or reduction requiring
prepayment of any Adjusted Libor Loan shall be made only on the last day of the
Interest Period with respect thereto or on the date of payment in full of all
amounts owing pursuant to Section 3.08 as a result of such termination or
reduction. Any such reduction shall be in the amount of $1,000,000 or whole
multiples of $250,000 in excess thereof, and shall reduce permanently the
amount of the Total Revolving Credit Commitment then in effect.
(d) The several agreements of the Lenders to make Revolving Credit Loans
pursuant to this Section 2.01 shall automatically terminate on the Revolving
Credit Commitment Termination Date. Upon such termination, the Companies shall
immediately repay in full the principal amount of the Revolving Credit Loans
then outstanding, together with all accrued interest thereon and all other
amounts due and payable hereunder.
SECTION 2.02. REVOLVING CREDIT NOTE. The Revolving Credit Loans made by each
Lender shall be evidenced by a promissory note of the Companies, (individually
the "Revolving Credit Note" and collectively the "Revolving Credit Notes"),
substantially in the form attached hereto as Exhibit A, each appropriately
completed, duly executed and delivered on behalf of the Companies and payable
to the order of such Lender in a principal amount equal to the Revolving Credit
Commitment
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of such Lender. Each Revolving Credit Note shall (a) be dated the Closing
Date, (b) be stated to mature on the Revolving Credit Commitment Termination
Date, and (c) bear interest from the date thereof until paid in full on the
unpaid principal amount thereof from time to time outstanding as provided in
Section 3.01. Each Lender is authorized to record the date, Type and amount of
each Revolving Credit Loan and the date and amount of each payment or
prepayment of principal of each Revolving Credit Loan in such Lender's records
or on the grid schedule annexed to the Revolving Credit Note; provided,
however, that the failure of a Lender to set forth each such Revolving Credit
Loan, payment and other information shall not in any manner affect the
obligation of the Companies to repay each Revolving Credit Loan made by such
Lender in accordance with the terms of its Revolving Credit Note and this
Agreement. The Revolving Credit Note, the grid schedule and the books and
records of each Lender shall constitute presumptive evidence of the information
so recorded absent manifest error.
SECTION 2.03. TERM LOAN. (a) Subject to the terms and conditions hereof, each
Lender severally agrees to make a term loan (individually a "Term Loan" and
collectively, the "Term Loans") to the Companies on the Closing Date in an
amount not to exceed its Term Loan Commitment. The Companies shall give the
Administrative Agent irrevocable written notice (or telephonic notice promptly
confirmed in writing) not later than 11:00 a.m. New York, New York time three
Business Days prior to the Closing Date specifying (i) the amount to be
borrowed, which shall not exceed the Term Loan Commitment, (ii) the Type or
Types of such Term Loans and the related amounts for each and (iii) if such
Term Loan is an Adjusted Libor Loan, the initial Interest Period selected for
such Term Loan. Upon receipt of such notice from the Companies, the
Administrative Agent shall promptly notify each Lender thereof. The Term Loans
may, at the election of the Companies, be (i) Adjusted Libor Loans, (ii) Prime
Rate Loans or (iii) a combination thereof. The Term Loan Commitment shall
terminate upon funding of the Term Loans on the Closing Date.
SECTION 2.04. TERM NOTE. The Term Loan made by each Lender shall be evidenced
by a promissory note of the Companies, substantially in the form of Exhibit
B-1, with appropriate insertions (individually a "Term Note" and, collectively,
the "Term Notes") payable to the order of such Lender and representing the
obligation of the Companies to pay the unpaid principal amount of the Term Loan
of such Lender with interest thereon as prescribed in Section 3.01. Each
Lender is authorized to record the Type of its Term Loan and the date and
amount of each payment or prepayment of principal thereof in such Lender's
records or on the grid schedule annexed to the Term Note; provided, however,
that the failure of a Lender to set forth each payment and other information
shall not in any manner affect the obligation of the Companies to repay the
Term Loan made by such Lender in accordance with the terms of its Term Note and
this Agreement. The Term Note, the grid schedule and the books and records of
each Lender shall constitute presumptive evidence of the information so
recorded absent manifest error. Each Term Note shall (a) be dated the Closing
Date, (b) be stated to mature on the Term Loan Maturity Date and (c) be payable
as to principal in twenty consecutive equal quarterly installments commencing
on September 30, 2000 and on the last day of each December, March, June and
September thereafter. The amount of such payments received by each Lender on
each of the initial nineteen installment dates shall be in the
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amount of each Lender's Commitment Proportion of $950,000 and the last
installment received by each Lender shall be in the amount of each Lender's
Commitment Proportion of the remaining principal amount outstanding. The Term
Note shall bear interest from the date thereof until paid in full on the unpaid
principal amount thereof from time to time outstanding at the applicable
interest rate per annum determined as provided in, and payable as specified in,
Section 3.01.
SECTION 2.05. LETTERS OF CREDIT. (a) Generally. Subject to the terms and
conditions set forth in this Agreement, upon the written request of the
Companies in accordance herewith, the Issuing Lender shall issue Letters of
Credit at any time during the Revolving Credit Commitment Period with pro rata
participation by all of the Lenders in accordance with their respective
Commitment Proportions. Notwithstanding the foregoing, at no time shall the
sum of the Aggregate Letters of Credit Outstanding exceed $50,000,000 and no
Letter of Credit shall be issued if, after giving effect to the same, the
Aggregate Outstandings would exceed the Available Revolving Credit Commitment.
Each request for issuance of a Letter of Credit shall be in writing and shall
be received by the Issuing Lender by no later than 11:00 a.m., New York, New
York time, on the day which is at least two Business Days prior to the proposed
date of issuance. Such issuance shall occur by no later than 5:00 p.m. on the
proposed date of issuance (assuming proper prior notice as aforesaid). Subject
to the terms and conditions contained herein, the expiry date, and the amount
and beneficiary of the Letters of Credit will be as designated by the
Companies. The Issuing Lender shall promptly notify the Administrative Agent
and the Lenders of the amounts of all Letters of Credit issued hereunder and of
any extension, reduction, termination or amendment of any Letter of Credit.
Each Letter of Credit issued by the Issuing Lender hereunder shall identify:
(i) the dates of issuance and expiry of such Letter of Credit, (ii) the amount
of such Letter of Credit (which shall be a sum certain), (iii) the beneficiary
of such Letter of Credit, and (iv) the drafts and other documents necessary to
be presented to the Issuing Lender upon drawing thereunder. In no event shall
any Letter of Credit expire (or by its terms be required to be borrowed), after
the Business Day which is three Business Days immediately prior to the
Revolving Credit Commitment Termination Date. The Companies agree to execute
and deliver to the Issuing Lender such further documents and instruments in
connection with any Letter of Credit issued hereunder (including without
limitation, applications therefor) as the Issuing Lender in accordance with its
customary practices may request.
(b) Drawings Under Letters of Credit. The Companies hereby absolutely and
unconditionally promise to pay the Issuing Lender not later than 12:00 noon
(New York, New York time) the amount of each drawing under a Letter of Credit
if the Companies receive notice of such drawing or payment prior to 10:00 a.m.,
New York, New York time, on the date of such drawing or payment, or if such
notice has not been received by the Companies prior to such time on such date,
then not later than 12:00 noon, New York, New York time, on the Business Day
immediately following the day that the Companies receive such notice; provided,
however, if any drawing or payment was in an amount not less than $500,000, the
Companies may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.01 that such payment be financed with a Revolving
Credit Loan which is Prime Rate Loan in an equivalent amount, and, to the
extent so financed, the Companies' obligations to make such payment shall be
discharged and replaced by such a Prime Rate Loan. Such request shall be made
by the Companies on the date of receipt of notice from the Issuing Lender of a
drawing under a Letter of Credit. The Issuing Lender shall notify
the
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Administrative Agent and each Lender of such request in accordance with Section
2.01. If the Companies fail to make such payment when due, the Issuing Lender
shall notify each Lender of the amount of the drawing under the applicable
Letter of Credit. Each Lender agrees that on the first Business Day after
receipt of such notice, it will immediately make available by no later than
12:00 noon New York, New York time, to the Issuing Lender at its office located
at the Payment Office in immediately available funds, its Commitment Proportion
of such drawing or payment, provided (i) each Lender's obligation shall be
reduced by its Commitment Proportion of any reimbursement by the Companies in
respect of any such drawing or payment pursuant to this Section 2.05 and (ii)
no Lender shall be required to make payments to the Issuing Lender with respect
to a drawing or payment which the Companies reimbursed with the proceeds of a
Revolving Credit Loan, as contemplated above, if such Lender fully funded its
Commitment Proportion of such Revolving Credit Loan in accordance with Section
3.11. Any payment made by a Lender pursuant to this Section 2.05(b) to
reimburse the Issuing Lender for any drawing under a Letter of Credit (other
than a Prime Rate Loan as contemplated above) shall not constitute a Revolving
Credit Loan and shall not relieve the Companies of their obligation to
reimburse the Issuing Lender for such drawing or payment. Each drawing under a
Letter of Credit which is not paid on the date such drawing or payment is made
shall accrue interest, for each day from and including the date of such drawing
or payment to but excluding the date that the Companies reimburse the Issuing
Lender in full for such drawing or payment, at the rate per annum then
applicable to Revolving Credit Loans which are Prime Rate Loans; provided,
however, that if the Companies fail to reimburse such drawing or payment when
due pursuant to this paragraph (b), then the Companies shall pay to the Issuing
Lender interest on the amount of such drawing or payment at the rate per annum
set forth in Section 3.01(c). Interest accruing pursuant to the preceding
sentence shall be for the account of the Issuing Lender, except that interest
accrued on and after the date of payment by any Lender pursuant to this Section
2.05(b) to reimburse the Issuing Lender shall be for the account of such Lender
to the extent of such payment. The Issuing Lender shall promptly notify the
Administrative Agent of each drawing under a Letter of Credit.
(c) Letter of Credit Obligations Absolute. (i) The obligation of the Companies
to reimburse the Issuing Lender as provided hereunder in respect of drawings
under Letters of Credit shall rank pari passu with the obligation of the
Companies to repay the Revolving Credit Loans hereunder, and shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, the obligation of the Companies to reimburse the
Issuing Lender in respect of drawings under Letters of Credit shall not be
subject to any defense based on the non- application or misapplication by the
beneficiary of the proceeds of any such drawing or the legality, validity,
regularity or enforceability of the Letters of Credit or any related document,
even though such document shall in fact prove to be invalid, fraudulent or
forged, or any dispute between or among any Company, the beneficiary of any
Letter of Credit, or any financial institution or other party to which any
Letter of Credit may be transferred. The Issuing Lender may accept or pay any
draft presented to it under any Letter of Credit regardless of when drawn or
made and whether or not negotiated, if such draft, accompanying certificate or
documents and any transmittal advice are presented or negotiated on or before
the expiry date of such Letter of Credit or any renewal or extension thereof
then in effect, and is in substantial compliance with the terms and conditions
of such
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Letter of Credit. Furthermore, neither the Issuing Lender nor any of
its correspondents nor any Lender shall be responsible, as to any document
presented under a Letter of Credit which appears to be regular on its face, and
appears on its face to be in substantial compliance with the terms of the
Letter of Credit, for the validity or sufficiency of any signature or
endorsement, for delay in giving any notice or failure of any instrument to
bear adequate reference to the Letter of Credit, or for failure of any Person
to note the amount of any draft on the reverse of the Letter of Credit. The
Issuing Lender shall have the right, in its sole discretion, to decline to
accept any documents and to decline to making payment under any Letter of
Credit if the documents presented are not in strict compliance with the terms
of such Letter of Credit.
(ii) Any action, inaction or omission on the part of the Issuing Lender or any
of its correspondents under or in connection with any Letter of Credit or the
related instruments, documents or property, if in good faith and in conformity
with such laws, regulations or customs as are applicable, shall be binding upon
the Companies and shall not place the Issuing Lender or any of its
correspondents or any Lender under any liability to any Company in the absence
of (x) gross negligence or willful misconduct by the Issuing Lender or its
correspondents or (y) the failure by the Issuing Lender to pay under a Letter
of Credit after presentation of a draft and documents strictly complying with
such Letter of Credit unless the Issuing Lender is prohibited from making such
payment pursuant to a court order. The Issuing Lender's rights, powers,
privileges and immunities specified in or arising under this Agreement are in
addition to any heretofore or at any time hereafter otherwise created or
arising, whether by statute or rule of law or contract. All Letters of Credit
issued hereunder will, except to the extent otherwise expressly provided
hereunder, be governed by the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce, Publication No.
500, and any subsequent revisions thereof.
(d) Obligations of Lenders in Respect of Letters of Credit. Each Lender
acknowledges that each Letter of Credit issued by the Issuing Lender pursuant
to this Agreement is issued or created by the Issuing Lender on behalf of and
with the ratable participation of all of the Lenders (i.e., in accordance with
their respective Commitment Proportions), and each Lender agrees to make the
payments required by subsection (b) above and agrees to be responsible for its
pro rata share of all liabilities incurred by the Issuing Lender with respect
to each Letter of Credit issued, established, opened or extended by the Issuing
Lender pursuant to this Agreement for the account of the Companies. Each
Lender agrees with the Issuing Lender and the other Lenders that its obligation
to make the payments required by subsection (b) above shall not be affected in
any way by any circumstances (other than the gross negligence or willful
misconduct of the Issuing Lender) occurring before or after the making of any
payment by the Issuing Lender pursuant to any Letter of Credit, including,
without limitation: (i) any modification or amendment of, or any consent,
waiver, release or forbearance with respect to, any of the terms of this
Agreement or any other instrument or document referred to herein; (ii) the
existence of any Default or Event of Default; or (iii) any change of any kind
whatsoever in the financial position or credit worthiness of any Company.
(e) Replacement of the Issuing Lender. The Issuing Lender may be replaced at
any time by written agreement among the Companies, the Administrative Agent,
the replaced Issuing Lender
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and the successor Issuing Lender. The Administrative Agent shall notify the
Lenders of any such replacement of the Issuing Lender. At the time any such
replacement shall become effective, the Companies shall pay all unpaid fees
accrued for the account of the replaced Issuing Lender pursuant to Section
3.04. From and after the effective date of any such replacement, (i) the
successor Issuing Lender shall have all the rights and obligations of the
Issuing Lender under this Agreement with respect to Letters of Credit to be
issued thereafter, and (ii) references herein to the term "Issuing Lender"
shall be deemed to refer to such successor or to any previous Issuing Lender,
or to such successor and all previous Issuing Lenders, as the context shall
require. After the replacement of an Issuing Lender hereunder, the replaced
Issuing Lender shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Lender under this Agreement with respect
to Letters of Credit issued prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(f) Existing Letters of Credit. The Companies and the Lenders agree that from
and after the Closing Date, subject to the satisfaction of the conditions
precedent to the initial Loans hereunder as set forth in Article V, the Letters
of Credit issued by Mellon Bank, N.A. for the account of EDO prior to the date
hereof and listed and described on Schedule VI attached hereto shall be Letters
of Credit for all purposes of this Agreement (other than with respect to
opening or transaction fees and the payment commission made or accrued prior to
the date hereof, which fees and commissions shall be for the sole account of
Mellon Bank, N.A.) including, without limitation, for purposes of Section
3.04(b) the Lenders hereby affirm their pro rata participation, in accordance
with their respective Commitment Proportions in such Existing Letters of
Credit.
ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS
SECTION 3.01. INTEREST RATE; CONTINUATION AND CONVERSION OF LOANS.
(a) Each Prime Rate Loan shall bear interest for the period from the date
thereof on the unpaid principal amount thereof at a fluctuating rate per annum
equal to the Prime Rate.
(b) Each Adjusted Libor Loan shall bear interest for the Interest Period
applicable thereto on the unpaid principal amount thereof at a rate per annum
equal to the Reserve Adjusted Libor determined for each Interest Period thereof
in accordance with the terms hereof plus the Applicable Margin.
(c) If the Companies shall default in the payment of the principal of or
interest on any portion of any Loan or any other amount becoming due hereunder,
whether with respect to reimbursement of drawings under Letter of Credit,
interest, fees, expenses or otherwise, the Companies shall on demand from time
to time pay interest on such defaulted amount accruing from the date of such
default (without reference to any period of grace) up to and including the date
of
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actual payment (after as well as before judgment) at a rate of 2% per annum in
excess of the rate otherwise in effect or, if no rate is in effect, 2% per
annum in excess of the Prime Rate.
(d) The Companies may elect from time to time to convert outstanding Loans from
Adjusted Libor Loans to Prime Rate Loans by giving the Administrative Agent at
least one Business Day's prior irrevocable written notice of such election,
provided that any such conversion of Adjusted Libor Loans shall only be made on
the last day of an Interest Period with respect thereto or upon the date of
payment in full of any amounts owing pursuant to Section 3.08 as a result of
such conversion. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender thereof. The Companies may elect from time to time
to convert outstanding Loans from Prime Rate Loans to Adjusted Libor Loans by
giving the Administrative Agent irrevocable written notice of such election not
later than 11:00 a.m. New York, New York time, three Business Days prior to
the date of the proposed conversion. Upon receipt of such notice the
Administrative Agent shall promptly notify each Lender thereof. All or any
part of outstanding Prime Rate Loans may be converted as provided herein,
provided that each conversion shall be in the principal amount of $1,000,000 or
whole multiples of $100,000 in excess thereof, and further provided that no
Default or Event of Default shall have occurred and be continuing. Any
conversion to or from Adjusted Libor Loans hereunder shall be in such amounts
and be made pursuant to such elections so that, after giving effect thereto,
the aggregate principal amount of all Adjusted Libor Loans having the same
Interest Period shall not be less than $1,000,000.
(e) Any Adjusted Libor Loan in a minimum principal amount of $1,000,000 may be
continued as such upon the expiration of an Interest Period with respect
thereto by compliance by the Companies with the notice provisions contained in
the definition of Interest Period; provided, that no Adjusted Libor Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Prime Rate Loan on the
last day of the Interest Period in effect when the Administrative Agent is
notified, or otherwise has actual knowledge, of such Default or Event of
Default.
(f) If the Companies shall fail to select the duration of any Interest Period
for any Adjusted Libor Loan in accordance with the definition of "Interest
Period" set forth in Section 1.01, the Companies shall be deemed to have
selected an Interest Period of one month.
(g) No Loan may be funded as an Adjusted Libor Loan or converted to or
continued as an Adjusted Libor Loan with an Interest Period that extends beyond
(i) the Revolving Credit Commitment Termination Date, with respect to Revolving
Credit Loans, or (ii) the Term Loan Maturity Date with respect to the Term
Loan.
(h) Interest on each Loan shall be payable in arrears on each Interest Payment
Date and shall be calculated on the basis year of 360 days and shall be payable
for the actual days elapsed. Each determination by the Administrative Agent of
an interest rate or fee hereunder shall, absent manifest error, be conclusive
and binding for all purposes.
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(i) Anything in this Agreement or in any Note to the contrary notwithstanding,
the obligation of the Companies to make payments of interest shall be subject
to the limitation that payments of interest shall not be required to be paid to
a Lender to the extent that the charging or receipt thereof would not be
permissible under the law or laws applicable to such Lender limiting the rates
of interest that may be charged or collected by such Lender. In each such
event payments of interest required to be paid to such Lender shall be
calculated at the highest rate permitted by applicable law until such time as
the rates of interest required hereunder may lawfully be charged and collected
by such Lender.
SECTION 3.02. USE OF PROCEEDS. The Term Loans shall be used to refinance the
Existing Loans provided, however, such financing shall not be deemed a
repayment of the Existing Loans and shall be construed as an amendment,
restatement and consolidation of the Existing Loans as evidenced by the Term
Note. The proceeds of the Revolving Credit Loans shall be used solely to (a)
to repay on the Closing Date in full the Existing Revolving Credit Loans and
the unpaid portion of the Existing Loans after giving effect to the funding of
the Term Loan, (b) for general corporate purposes, including the financing of
the ongoing working capital requirements of the Companies and the Guarantors
and (c) to finance up to $20,000,000, in the aggregate, of the purchase price
of Permitted Acquisitions. Letters of Credit shall be issued by the Issuing
Lender for the account of the Companies and shall be issued for purposes in
connection with, and in the ordinary course of, business of the Companies
consistent with historical purposes of standby letters of credit issued for the
Companies prior to the date hereof.
SECTION 3.03. OPTIONAL PREPAYMENTS.
(a) The Company may on the last day of an Interest Period if the Loans to be
repaid are Adjusted Libor Loans, or at any time and from time to time if the
Loans to be repaid are Prime Rate Loans, repay the then outstanding Loans, in
whole or in part, without premium or penalty, except as provided in Section
3.08, upon written notice to the Administrative Agent (or telephonic notice
promptly confirmed in writing) not later than 11:00 a.m. New York, New York
time, three Business Days before the date of prepayment with respect to
prepayments of Adjusted Libor Loans, or 11:00 a.m. New York, New York time one
Business Day before the date of prepayment with respect to Prime Rate Loans.
Each notice shall be irrevocable and shall specify the date and amount of
repayment and whether such repayment is of the Term Loans or of Revolving
Credit Loans and whether such repayment is of Adjusted Libor Loans or Prime
Rate Loans or a combination thereof, and if a combination thereof, the amount
of repayment allocable to each. No prepayment of the Tranche B Term Loan may
be made pursuant to this Section 3.03 until the outstanding principal amount of
the Term Loan has been paid in full. Upon receipt of such notice, the
Administrative Agent shall promptly notify each Lender thereof. If such notice
is given, the Companies shall make such repayment, and the payment amount
specified in such notice shall be due and payable, on the date specified
therein. Each partial prepayment pursuant to this Section 3.03 of (x) Prime
Rate Loans shall be in a principal amount of $500,000 or whole multiples of
$100,000 in excess thereof and (y) of Adjusted LIBOR Loans shall be in a
principal amount of $1,000,000 or whole multiples of $100,000 in excess
thereof.
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(b) Each prepayment of principal of a Loan pursuant to this Section 3.03 shall
be accompanied by accrued interest to the date prepaid on the amount prepaid.
All partial prepayments of the Term Loans, shall be applied to the remaining
installments of principal thereof in inverse order of maturity. Prepayments of
the Term Loans may not be reborrowed. Unless directed by the Companies
pursuant to Section 3.03(a) partial prepayments of any Loan shall be applied
first to outstanding Prime Rate Loans and then to Adjusted Libor Loans having
the shortest remaining Interest Periods.
SECTION 3.04. FEES.
(a) The Companies agree to pay to the Administrative Agent for the account of,
and pro rata distribution to, each Lender a commitment fee on the average daily
unused portion of the Revolving Credit Commitment from the Closing Date until
the Revolving Credit Commitment Termination Date at a rate per annum equal to
.25%, based on a year of 360 days, payable in arrears on the last day of each
calendar quarter commencing September 30, 2000, on the Revolving Credit
Commitment Termination Date, and on each date the Revolving Credit Commitment
is permanently reduced in whole or in part.
(b) The Companies shall pay to the Administrative Agent for the account of, and
pro rata distribution to, the Lenders a commission with respect to the Lenders'
participation in Letters of Credit equal to the Applicable Margin on the
average daily amount of the LC Exposure during the period from and including
the Closing Date but excluding the later of the date on which such Lenders'
Commitment to extend Revolving Credit Loans terminates and the date on which
such Lender ceases to have any LC Exposure. Such commissions shall be payable
in arrears on the last Business Day of March, June, September and December of
each year, commencing September 30, 2000; provided that all such fees shall be
payable on the date on which the Total Commitment terminates and any such fees
accruing after the date on which the Total Commitment terminates shall be
payable on demand. All commissions shall be computed on the basis of a year of
three hundred sixty (360) days and shall be payable for the actual number of
days elapsed. In addition, the Companies shall pay to the Issuing Lender, upon
its demand and for its account, the Issuing Lender's standard fees with respect
to the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder.
(c) The Companies agree to pay each Agent for such Agent's own account, such
agency, syndication and other fees as separately agreed between each Agent and
the Companies.
SECTION 3.05. INABILITY TO DETERMINE INTEREST RATE. In the event that the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Companies) that, by reason of circumstances
affecting the London interbank market, adequate and reasonable means do not
exist for ascertaining the Reserve Adjusted Libor applicable pursuant to
Section 3.01(b) for any requested Interest Period with respect to (a) the
making of an Adjusted Libor Loan, (b) an Adjusted Libor Loan that will result
from the requested conversion of a Prime Rate Loan into an Adjusted Libor Loan,
or (c) the continuation of an Adjusted Libor Loan
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beyond the expiration of the then current Interest Period with respect thereto,
the Administrative Agent shall forthwith give notice by telephone of such
determination, promptly confirmed in writing, to the Companies of such
determination. Until the Administrative Agent notifies the Companies that the
circumstances giving rise to the suspension described herein no longer exist,
the Companies shall not have the right to request or continue an Adjusted Libor
Loan or to convert a Prime Rate Loan to an Adjusted Libor Loan.
SECTION 3.06. ILLEGALITY. Notwithstanding any other provisions herein, if any
introduction of or change in any law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Adjusted Libor Loans as contemplated by this Agreement, such
Lender shall forthwith give notice by telephone of such circumstances, promptly
confirmed in writing, to the Administrative Agent, which notice the
Administrative Agent shall promptly transmit to the Companies and the other
Lenders and (a) the commitment of such Lender to make and to allow conversion
to or continuations of Adjusted Libor Loans shall forthwith be cancelled for
the duration of such illegality and (b) the Loans then outstanding as Adjusted
Libor Loans, if any, shall be converted automatically to Prime Rate Loans on
the next succeeding last day of each Interest Period applicable to such
Adjusted Libor Loans or, within such earlier period as may be required by law.
The Companies shall pay to such Lender, upon demand, any additional amounts
required to be paid pursuant to Section 3.08 hereof.
SECTION 3.07. INCREASED COSTS. (a) In the event that any introduction of or
change, on or after the date hereof, in any applicable law, regulation, treaty,
order, directive or in the interpretation or application thereof (including,
without limitation, any request, guideline or policy, whether or not having the
force of law, of or from any central bank or other governmental authority,
agency or instrumentality and including, without limitation, Regulation D), by
any authority charged with the administration or interpretation thereof shall
occur, which:
(i) shall subject any Lender or the Issuing Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Letter of Credit, or
any Loan, or change the basis of taxation of payments to such Lender or the
Issuing Lender of principal, interest, fees or any other amount payable
hereunder (other than any tax that is measured with respect to the overall net
income of such Lender or the Issuing Lender or Lending Office of such Lender
and that is imposed by the United States of America, or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction in
which such Lender's Lending Office is located, or by any jurisdiction in which
such Lender or the Issuing Lender is organized, has its principal office or is
managed and controlled); or
(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement (whether or not having the force of law)
against assets held by, or deposits or other liabilities in or for the account
of, advances or loans by, or other credit extended by, or any other acquisition
of funds by, any office of any Lender or the Issuing Lender; or
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(iii) shall impose on any Lender or the Issuing Lender any other condition, or
change therein;
and the result of any of the foregoing is to increase the cost to such Lender
or the Issuing Lender of making, renewing or maintaining advances or extensions
of credit hereunder or to reduce any amount receivable hereunder, in each case
by an amount which such Lender or the Issuing Lender deems material, then, in
any such case, the Companies shall pay such Lender or the Issuing Lender, such
additional amount or amounts as such Lender or the Issuing Lender shall have
determined will compensate such Lender or the Issuing Lender for such increased
costs or reduction.
(b) If any Lender or the Issuing Lender shall have determined that the adoption
of any applicable law, rule or regulation regarding capital adequacy, or any
change therein, 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
the Issuing Lender (or any Lending Office of any Lender or the Issuing Lender)
or any Lender's or the Issuing Lender's holding company, with any request or
directive regarding capital adequacy (whether or not having the force of the
law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's or the Issuing
Lender's capital or on the capital of such Lender's or the Issuing Lender's
holding company as a consequence of its obligations hereunder to a level below
that which such Lender or the Issuing Lender could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's or the
Issuing Lender's policies and the policies of such Lender's or the Issuing
Lender's holding company with respect to capital adequacy) by an amount deemed
by such Lender or the Issuing Lender to be material, then from time to time,
the Companies shall pay to such Lender or the Issuing Lender, the additional
amount or amounts as such Lender or the Issuing Lender shall have determined
will compensate such Lender or the Issuing Lender or such Lender's holding
company for such reduction. Such Lender's or the Issuing Lender's
determination of such amounts shall be conclusive and binding on the Companies
absent manifest error.
(c) A certificate of (a) Lender or the Issuing Lender setting forth the amount
or amounts payable pursuant to Sections 3.07(a) and 3.07(b) above shall be
conclusive absent manifest error. The Companies shall pay any Lender the
amount shown as due on any such certificate within ten days after receipt
thereof.
(d) In the event any Lender or the Issuing Lender shall be entitled to
compensation pursuant to Section 3.07(a) or Section 3.07(b), it shall promptly
notify the Administrative Agent and Companies of the event by reason of which
it has become so entitled; provided, however, no failure on the part of any
Lender or the Issuing Lender to demand compensation under clause (a) or clause
(b) above on one occasion shall constitute a waiver of its right to demand
compensation on any other occasion. In the event the Company is required to
make a payment pursuant to clause (a) or clause (b) above, then the Company
may, with the prior written consent of the Required Lenders (which consent
shall not be unreasonably withheld) and upon not less than thirty (30) Business
Days' prior notice to the Agent, immediately terminate the Commitments of any
Lender in respect of which such
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amount was or may be payable and prepay such Lender's Loans together with
accrued interest thereon and all other amounts payable with respect thereto.
The Required Lenders shall not be required to grant consent to any such
termination if the Require Lenders have located a Lending institution
satisfactory to the Required Lenders which shall have agreed to be substituted
for such Lender on the terms and conditions satisfactory to the Required
Lenders.
SECTION 3.08. INDEMNITY. The Companies agree to indemnify each Lender and to
hold each Lender harmless from any loss, cost or expense which such Lender may
sustain or incur, including, without limitation, interest or fees payable by
such Lender to lenders of funds obtained by it in order to maintain Adjusted
Libor Loans hereunder, as a consequence of (a) default by the Companies in
payment of the principal amount of or interest on any Adjusted Libor Loan, (b)
default by the Companies to accept or make a borrowing of an Adjusted Libor
Loan or a conversion into or continuation of an Adjusted Libor Loan after the
Companies have requested such borrowing, conversion or continuation, (c)
default by the Companies in making any prepayment of any Adjusted Libor Loan
after the Companies give notice in accordance with Section 3.03 of this
Agreement and/or (d) the making of any payment or prepayment (whether mandatory
or optional) of an Adjusted Libor Loan or the making of any conversion of an
Adjusted Libor Loan to a Prime Rate Loan on a day which is not the last day of
the applicable Interest Period with respect thereto. A certificate of a Lender
setting forth such amounts shall be conclusive absent manifest error. The
Companies shall pay such Lender the amount shown as due on any certificate
within ten days after receipt thereof.
SECTION 3.09. TAXES. (a) All payments made by the Companies under this
Agreement shall be made free and clear of, and without reduction for or on
account of, any present or future taxes, levies, imposts, duties, charges,
fees, deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding income and
franchise taxes imposed on any Agent, the Issuing Lender or a Lender by (i) the
United States of America or any political subdivision or taxing authority
thereof or therein, (ii) the jurisdiction under the laws of which such Agent,
the Issuing Lender or such Lender is organized or in which it has its principal
office or is managed and controlled or any political subdivision or taxing
authority thereof or therein, or (iii) any jurisdiction in which such Agent,
the Issuing Lender or Lender's Lending Office is located or any political
subdivision or taxing authority thereof or therein (such non-excluded taxes
being called "Taxes"). If any Taxes are required to be withheld from any
amounts payable to any Agent, the Issuing Lender or any Lender hereunder, or
under the Notes, the amount so payable to such Agent, the Issuing Lender or
such Lender shall be increased to the extent necessary to yield to such Agent,
the Issuing Lender or such Lender (after payment of all Taxes and free and
clear of all liability in respect of such Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Taxes are payable by any Company, such
Company shall promptly send to the Administrative Agent for its own account or
for the account of the Issuing Lender or such Lender, as the case may be, a
certified copy of an original official receipt showing payment thereof. If any
Company fails to pay Taxes when due to the appropriate taxing authority or
fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, the Companies shall indemnify the Agents, the
Issuing Lender and the Lenders for any incremental taxes, interest or penalties
that may become payable by any
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Agent, the Issuing Lender or any Lender as a result of any such failure
together with any expenses payable by any Agent, the Issuing Lender or any
Lender in connection therewith.
(b) Prior to the first Interest Payment Date, each Lender that is not organized
under the laws of the United States or a state thereof agrees that it will
deliver to the Administrative Agent (i) two duly completed copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI or successor applicable
form, as the case may be, certifying in each case that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of
any United States federal income taxes, and (ii) an Internal Revenue Service
Form W-8 or W-9 or successor applicable form, as the case may be, to establish
an exemption from United States back-up withholding tax. Each Lender which
delivers to the Company and the Administrative Agent a Form W-8BEN or W-8ECI
and Form W-8 or W-9 pursuant to the preceding sentence further undertakes to
deliver to Administrative Agent two further copies of the said statement and
Form W-8BEN or W-8ECI and Form W-8 or W-9, or successor applicable forms, or
other manner of certification, as the case may be, on or before the date that
any such letter or form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent letter and form previously
delivered by it to the Administrative Agent, and such extensions or renewals
thereof as may reasonably be requested by the Administrative Agent, certifying
in the case of a Form W-8BEN or W-8ECI that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes.
(c) The Companies shall not be required to pay any increased amount on account
of Taxes pursuant to this Section 3.10 to any Lenders or to the Agents to the
extent such Taxes would not have been payable if the Lenders had furnished a
form which it was required to furnish in accordance with clause (b) of this
Section 3.10, and such Taxes shall be borne solely by such Agents or Lenders.
SECTION 3.10. PRO RATA TREATMENT AND PAYMENTS. Each borrowing by the
Companies from the Lenders, each conversion of a Loan pursuant to Section
3.01(d) or continuation of a Loan pursuant to Section 3.01(e), each payment by
the Companies on account of any fee (other than with respect to fees which are
expressly payable to an Agent or the Issuing Lender for its own account, and
reimbursements by the Company to the Issuing Lender with respect to drawings
under Letters of Credit) and any reduction of the Commitments of the Lenders
hereunder shall be made pro rata according to the respective relevant
Commitment Proportions of the Lenders. Each payment (including each
prepayment) by the Companies on account of principal of and interest on each
Loan shall be made pro rata according to the respective outstanding principal
amounts of such Loans held by each Lender. All payments (including
prepayments) to be made by the Companies on account of principal, interest,
fees and reimbursement obligations shall be made without set-off or
counterclaim and shall be made to the Administrative Agent, for the account of
the Lenders (except as specified in Section 3.04), at the Payment Office of the
Administrative Agent in Dollars in immediately available funds. The
Administrative Agent may, in its sole discretion, directly charge interest
payments due in respect of the Loans to the Companies' accounts at the Payment
Office or other office of the Administrative Agent. The Administrative Agent
shall distribute such payments to the Lenders promptly upon receipt in like
funds by wire transfer of such Lender's portion of such payment
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to such Lender for the account of its Lending Office. The Issuing Lender may,
in its sole discretion, directly change reimbursement obligations with respect
to Letters of Credit to the Companies' accounts at any office of the Issuing
Lender. Except as otherwise provided in the definition of "Interest Period,"
if any payment hereunder becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day, and,
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension.
SECTION 3.11. FUNDING AND DISBURSEMENT OF LOANS. (a) Each Lender shall make
each Loan to be made by it hereunder available to the Administrative Agent at
the Payment Office for the account of such office and the Administrative Agent
by 1:00 p.m. New York, New York time on the Borrowing Date in Dollars in
immediately available funds. Unless any applicable condition specified in
Article V has not been satisfied, the amount so received by Administrative
Agent will be made available to the Companies at the Payment Office by
crediting the account of the Companies with such amount and in like funds as
received by the Administrative Agent; provided, however, that if the proceeds
of any Loan or any portion thereof are to be used to prepay outstanding Loans,
then the Administrative Agent shall apply such proceeds for such purpose to
extent necessary and credit the balance, if any, to the Companies' account.
(b) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a proposed Borrowing Date that such Lender will not make the
amount which would constitute its Commitment Proportion of the borrowing on
such Borrowing Date available to the Administrative Agent, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such Borrowing Date, and the Administrative Agent may,
in reliance upon such assumption, make available to the Companies a
corresponding amount. If such amount is not made available to the
Administrative Agent until a date after such Borrowing Date, such Lender shall
pay to the Administrative Agent on demand interest on such Lender's Commitment
Proportion of such borrowing at a rate equal to the greater of (i) the daily
average Federal Funds Rate and (ii) a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation
during such period, from and including such Borrowing Date to the date on which
such Lender's Commitment Proportion of such borrowing shall have become
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts due
pursuant to this Section 3.11(b) shall be conclusive absent manifest error.
Nothing herein shall be deemed to relieve any Lender from its obligations to
fulfill its commitment hereunder or to prejudice any right which the Companies
may have against any Lender as a result of any default by such Lender
hereunder.
SECTION 3.12. CHANGE OF LENDING OFFICE. Each Lender agrees to use reasonable
efforts to designate an alternate Lending Office with respect to its Adjusted
Libor Loans affected by the events or circumstances described in Section 3.05,
Section 3.06 or Section 3.07 to avoid or minimize the Companies' liability
thereunder; provided, however, that such efforts shall not cause the imposition
on such Lender of any additional cost or legal, regulatory or administrative
burdens deemed by such Lender, in its sole discretion, to be material.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to extend the
credit herein provided for, the Companies, jointly and severally, represent and
warrant to each Agent and each Lender that:
SECTION 4.01. ORGANIZATION POWERS. Each Company and each Guarantor (a) is a
corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation, (b) has the power and authority to own
its properties and to carry on its business as now being conducted, (c) is duly
qualified to do business in every jurisdiction wherein the conduct of its
business or the ownership of its properties are such as to require such
qualification except those jurisdictions in which the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect,
and (d) has the power to execute, deliver and perform each of the Loan
Documents to which it is a party, including, without limitation, with respect
to the Companies, the power to obtain extensions of credit hereunder and to
execute and deliver the Notes.
SECTION 4.02. AUTHORIZATION OF BORROWING, ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by each Company of this Agreement, and the
other Loan Documents to which it is a party, the borrowings hereunder, and the
execution and delivery by each of the Guarantors of the Loan Documents to which
such Guarantor is a party, (a) have been duly authorized by all requisite
corporate action, (b) will not violate or require any consent under (i) any
provision of law applicable to any Company or any Guarantor, any rule or
regulation of any Governmental Authority or the certificate of incorporation,
by-laws, or other organizational documents, as applicable of any Company or of
any Guarantor or (ii) any order of any court or other Governmental Authority
binding on any Company or any Guarantor or any indenture, agreement or other
instrument to which any Company or any Guarantor is a party, or by which any
Company or any Guarantor or any of their respective properties are bound, and
(c) will not be in conflict with, result in a breach of or constitute (with due
notice and/or lapse of time) a default under, any such indenture, agreement or
other instrument, or result in the creation or imposition of any Lien, of any
nature whatsoever upon any of the property or assets of any Company or any
Guarantor other than as contemplated by this Agreement or the other Loan
Documents. This Agreement and each other Loan Document to which each Company
or any Guarantor is a party constitutes a legal, valid and binding obligation
of such Company and such Guarantor enforceable, as the case may be, against
such Company and such Guarantor, as the case may be, in accordance with its
terms except to the extent that enforcement may be limited by applicable
bankruptcy, reorganization, moratorium, insolvency and similar laws affecting
creditors' rights generally or by equitable principles of general application,
regardless of whether considered in a proceeding in equity or at law.
SECTION 4.03. FINANCIAL CONDITION. (a) The Companies have heretofore
furnished to the Agent and each Lender (i) the audited consolidated balance
sheet of EDO and its Subsidiaries and the related audited consolidated
statements of income, retained earnings and cash flow of EDO
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and its Subsidiaries audited by KPMG, LLP, independent certified public
accountants, for the fiscal year ended December 31, 1999, (ii) the audited
consolidated balance sheet of AIL and its Subsidiaries and the related audited
consolidated statements of income, retained earnings and cash flow of AIL and
its Subsidiaries audited by Ernst & Young, LLP for the fiscal year ended
December 31, 1999 and (iii) the unaudited consolidated balance sheet of EDO and
its Subsidiaries and the related consolidated statements of income, retained
earnings and cash flow of EDO and its Subsidiaries for the three month period
ended March 31, 2000. Such financial statements were prepared in conformity
with Generally Accepted Accounting Principles, applied on a consistent basis,
and fairly present the financial condition and results of operations of EDO and
its Subsidiaries as of the date of such financial statements and for the
periods to which they relate and, since March 31, 2000, no event or condition
has occurred which could reasonably be expected to have a Material Adverse
Effect. The Companies shall deliver to the Administrative Agent, with a copy
for each Lender, a certificate of the Chief Financial Officer of EDO to that
effect on the Closing Date. Other than obligations and liabilities arising in
the ordinary course of business since March 31, 2000, there are no obligations
or liabilities contingent or otherwise, of EDO or its Subsidiaries which are
not reflected or disclosed on such audited statements.
(b) Each Company and each Guarantor is Solvent.
SECTION 4.04. TAXES. All assessed deficiencies resulting from Internal
Revenue Service examinations of the federal income tax returns of each Company
and each Guarantor have been discharged or reserved against in accordance with
Generally Accepted Accounting Principles. Each Company and each Guarantor has
filed or caused to be filed all federal, state and local tax returns which are
required to be filed and has paid or has caused to be paid all taxes as shown
on said returns or on any assessment received by them, to the extent that such
taxes have become due, except taxes which are being contested in good faith and
which are reserved against in accordance with Generally Accepted Accounting
Principles.
SECTION 4.05. TITLE TO PROPERTIES. The Companies and each Guarantor has good
title to their respective properties and assets reflected on the financial
statements referred to in Section 4.03 hereof, except for such properties and
assets as have been disposed of since the date of such financial statements as
no longer used or useful in the conduct of their respective businesses or as
have been disposed of in the ordinary course of business, and all such
properties and assets are free and clear of all Liens other than Permitted
Liens.
SECTION 4.06. LITIGATION. (a) There are no actions, suits or proceedings
(whether or not purportedly on behalf of any Company or any Guarantor) pending
or, to the knowledge of each Company, threatened against any Company or any
Guarantor at law or in equity or before or by any Governmental Authority, which
involve any of the transactions contemplated herein or which, if adversely
determined against such Company or such Guarantor, could reasonably be expected
to have a Material Adverse Effect; and (b) neither any Company nor any
Guarantor is in default with respect to any judgment, writ, injunction, decree,
rule or regulation of any Governmental Authority which could reasonably be
expected to have a Material Adverse Effect.
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SECTION 4.07. AGREEMENTS. Neither any Company nor any Guarantor is a party to
any agreement or instrument or, with respect to such Company, subject to any
charter or other corporate restriction or any judgment, order, writ,
injunction, decree or regulation which could reasonably be expected to have a
Material Adverse Effect. Neither any Company nor any Guarantor is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party, which default could reasonably be expected to have a Material Adverse
Effect.
SECTION 4.08. COMPLIANCE WITH ERISA. Each Plan is in compliance, in all
material respects, with ERISA; no Plan is insolvent or in reorganization, no
Plan or Plans have an Unfunded Current Liability, and no Plan has an
accumulated or waived funding deficiency; neither any Company, any Guarantor,
nor any ERISA Affiliate has incurred any material liability to or on account of
a Plan pursuant to Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA or
expects to incur any liability under any of the foregoing sections on account
of the prior termination of participation in or contributions to any such Plan;
no proceedings have been instituted to terminate any Plan; no condition exists
which presents a risk to any Company, any Guarantor or any ERISA Affiliate of
incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no lien imposed under the Code or ERISA on
the assets of any Company, any Guarantor or any of its ERISA Affiliates exists
or is likely to arise on account of any Plan and each Company and each
Guarantor may terminate contributions to any other employee benefit plans
maintained by it without incurring any material liability to any Person
interested therein.
SECTION 4.09. FEDERAL RESERVE REGULATIONS; USE OF PROCEEDS. (a) Neither any
Company nor any Guarantor is engaged principally in, nor has as one of its
important activities, the business of extending credit for the purpose of
purchasing or carrying any "margin stock" (within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System of the United States,
as amended from time to time).
(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to
purchase or to carry margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock, or to refund indebtedness originally
incurred for such purposes, or (ii) for any purpose which violates or is
inconsistent with the provisions of Regulation T, U, or X of the Board of
Governors of The Federal Reserve System.
(c) The proceeds of each Loan shall be used solely for the purposes permitted
under Section 3.02.
SECTION 4.10. APPROVALS. No registration with or consent or approval of, or
other action by, any Governmental Authority or any other Person is required in
connection with the execution, delivery and performance of this Agreement by
the Companies or any Guarantor, or with the execution and delivery of other
Loan Documents to which it is a party or with respect to the
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Companies, the borrowings hereunder, other than registration consents and
approvals received prior to the date hereof and disclosed to the Lenders and
which are in full force and effect.
SECTION 4.11. SUBSIDIARIES. Attached hereto as Schedule I is a correct and
complete list of all Subsidiaries of EDO showing as to each Subsidiary, its
name, the jurisdiction of its incorporation and the ownership of each such
Subsidiary (including the percentage of the ownership interest held by each
such entity).
SECTION 4.12. HAZARDOUS MATERIALS. Each Company and each Guarantor is in
compliance in all material respects with all applicable Environmental Laws and
neither any Company nor any Guarantor has used Hazardous Materials on, from, or
affecting any property now owned or occupied or previously owned or occupied by
any Company or any Guarantor in any manner which violates, in any material
respect, any applicable Environmental Law. To the knowledge of the Company, no
prior owner of any such property or any tenant, subtenant, prior tenant or
prior subtenant have used Hazardous Materials on, from, or affecting such
property in any manner which violates, in any material respect, any applicable
Environmental Law.
SECTION 4.13. INVESTMENT COMPANY ACT. Neither the Company nor any Guarantor
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.14. SECURITY DOCUMENTS. Each Security Document executed by each
Company shall constitute a valid and continuing lien on and security interest
in the collateral referred to in such Security Document in favor of the
Administrative Agent for the ratable benefit of the Lenders prior to all other
Liens, claims and right of all other Persons, other than Permitted Liens, and
shall be enforceable as such against all other Persons.
SECTION 4.15. NO DEFAULT. No Default or Event of Default has occurred and is
continuing.
SECTION 4.16. PERMITS AND LICENSES. Each Company and each Guarantor has all
permits, licenses, certifications, authorizations and approvals required for it
lawfully to own and operate their respective businesses except those the
failure of which to have could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 4.17. NO OTHER VENTURES. Neither any Company nor any Guarantor is a
party to any joint venture or partnership with any Person.
SECTION 4.18. COMPLIANCE WITH LAW. Each Company and each Guarantor is in
compliance, with all laws, rules, regulations, orders and decrees which are
applicable to such Company or such Guarantor, or to any of their respective
properties, which the failure to comply with could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
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SECTION 4.19. NON-OPERATING SUBSIDIARIES. Each Non-Operating Subsidiary
conducts no operations or business and has assets, the fair market value of
which exceeds $10,000 in the aggregate.
SECTION 4.20. SUBORDINATED DEBENTURES. The Obligations shall constitute, and
will constitute, Senior Indebtedness within the meaning ascribed to such terms
in the indenture pursuant to which the Subordinated Debentures were issued.
The subordination provisions therein are enforceable against the issuers
thereunder and the holders, from time to time, of the Subordinated Debentures.
The issuers are not in default under any such indenture and there does not
exist, and the execution, delivery or performance of the Loan Documents will
not result in, an "Event of Default" or "Redemption Event" as those terms are
defined in such indenture.
SECTION 4.21. FULL DISCLOSURE. No representation and warranty by any Company,
in this Agreement and no information in any statement, certificate, schedule,
or other document furnished or to be furnished pursuant hereto or thereto, or
in connection with the transactions contemplated hereby or thereby, contains or
will contain as of the Closing Date any untrue statement of a material fact or
be misleading in any material respect. Except as disclosed in this Agreement,
there is no fact known to any Company which such Company has not disclosed to
the Lenders in writing which could reasonably be expected to have a Material
Adverse Effect. It is understood that no representation or warranty is made
concerning the forecasts, estimates, pro forma information, projections and
statements as to anticipated future performance or conditions, and the
assumptions on which they were based, contained in any such statement,
certificate, schedule or other document, except that as of the date such
forecasts, estimates, pro forma information, projections and statements were
generated, (A) such forecasts, estimates, pro forma information, projections
and statements were based on the good faith assumptions of the management of
the Companies and (B) such assumptions were reasonably believed by such
management to be reasonable. Such forecasts, estimates pro forma information
and statements, and the assumptions on which they were based, may or may not
prove to be correct.
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.01. CONDITIONS TO INITIAL EXTENSION OF CREDIT. The obligation of
each Lender to make the initial Loans hereunder and the obligation of the
Issuing Lender to issue the initial Letter of Credit, are subject to the
following conditions precedent:
(a) NOTES. On or prior to the Closing Date, the Administrative Agent shall
have received, for the account of each Lender, a Revolving Credit Note and Term
Note, each duly executed by the Companies.
(b) GUARANTIES. On or prior to the Closing Date, the Administrative Agent
shall have received, with a counterpart for each Lender, a Guaranty duly
executed by each Guarantor.
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(c) SECURITY DOCUMENTS. On or prior to the Closing Date, the Administrative
Agent shall have received, with a counterpart for each Lender, the Security
Documents, each duly executed by each Company and each Guarantor party thereto
and, to the extent required therein, (i) with duly executed financing
statements on form UCC-1 describing the collateral covered by the Security
Documents and (ii) stock certificates evidencing the stock pledge pursuant to
the Pledge Agreement which shall consist of in the aggregate, 100% of the
issued and outstanding capital stock of AIL and each other Subsidiary of EDO
(other than any Foreign Subsidiary with respect to which only 65% of the issued
and outstanding capital stock shall be pledged) together with undated stock
powers for each certificate representing such stock in blank duly executed by
the Pledgor.
(d) INTERCREDITOR AGREEMENT. On or prior to the Closing Date, the
Administrative Agent shall have received, with a counterpart for each Lender,
the Intercreditor Credit Agreement, duly executed by Mellon Bank, N.A. and each
Company.
(e) OPINION OF COUNSEL. On or prior to the Closing Date, the Administrative
Agent shall have received a written opinion of counsel for the Companies and
the Guarantors dated the Closing Date and addressed to each Agent and each
Lender, substantially in the form of Exhibit F attached hereto.
(f) SUPPORTING DOCUMENTS. On or prior to the Closing Date, the Administrative
Agent shall have received, with a copy for each Lender, (i) a certificate of
good standing for each Company and each Guarantor from the secretary of state
of the state of its organizational jurisdiction dated as of a recent date; (ii)
certified copies of the charter documents of each Company and Guarantor; (iii)
a certificate of an authorized officer or member of each Company and each
Guarantor dated the Closing Date and certifying: (x) that the charter
documents of Person have not been amended since the date of their certification
(or if there has been any such amendment, attaching a certified copy thereof);
(y) that attached thereto is a true and complete copy of resolutions adopted by
the board of directors or members, as applicable, of such Person authorizing
the execution, delivery and performance of each Loan Document to which it is a
party; and (z) the incumbency and specimen signature of each officer or member
of such Person executing each Loan Document to which it is a party and any
certificates or instruments furnished pursuant hereto or thereto, and a
certification by another officer or member of such Person as to the incumbency
and signature of the Person executing such certificate; and (iv) such other
documents as the Administrative Agent may reasonably request.
(g) OFFICER'S CERTIFICATE. On the Closing Date, the Administrative Agent shall
have received a certificate dated the Closing Date, executed by an Executive
Officer confirming compliance with the conditions set forth and clauses (a) and
(b) of Section 5.02.
(h) INSURANCE. On or prior to the Closing Date, the Administrative Agent shall
have received a certificate or certificates of insurance from an independent
insurance broker or brokers confirming the insurance required to be maintained
pursuant to Section 6.01 hereof and the
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Mortgage and evidence that the Administrative Agent has been named loss payee,
additional insured and mortgagee with respect to each policy of such insurance.
(i) TITLE INSURANCE. On or prior to the Closing Date, AIL shall have obtained
and delivered to the Administrative Agent an American Land Title Association
Loan Policy -- 1990 (the "Title Insurance Policy") by a title insurance company
acceptable to the Lenders with respect to the Mortgage in favor of the
Administrative Agent, in an amount equal to $25,000,000, having only those
exceptions to title satisfactory to the Lenders, together with a copy of all
title exception documents, easements, operating agreements and declarations
affecting the insured premises. The Title Insurance Policy shall (i) contain
such endorsements and affirmative coverage as the Lenders may request and (ii)
insure the Mortgage to be a valid first, prior and paramount lien upon the AIL
Property, subject only to those exceptions to title set forth in Schedule B
thereto which are specifically approved by the Required Lenders.
(j) SURVEY. On or prior to the Closing Date, the Administrative Agent shall
have received a new survey of the AIL Property satisfactory to the
Administrative Agent and its counsel which survey shall be certified to the
Administrative Agent, and the title company or companies. The survey shall
show all parcels comprising the AIL Property, dimensions and locations of any
improvements, easements, rights of way, adjoining sites, encroachments and the
extent thereof, establishing building lines and street lines the distance to
and the names of the nearest intersecting streets and such other details as the
Administrative Agent or its counsel may request.
(k) ASSETS FREE FROM LIENS. Prior to the Closing Date, the Administrative
Agent shall have received UCC-1 financing statement, tax and judgment lien
searches evidencing that each Company's and each Guarantor's accounts
receivable, inventory, equipment and all other assets of each Company and each
Guarantor are free and clear of all Liens except Permitted Liens.
(l) PAYMENT OF EXISTING INDEBTEDNESS. The Administrative Agent shall have
received a payoff letter from European American Bank and Mellon Bank, N.A. with
respect to all amounts due and owing under the Original Agreements, together
with UCC-3 termination statements or statements of assignment with respect to
all filings against the Companies and the Guarantors, which payoff letter shall
include a statement that upon payment in full of the amounts (other than the
Existing Loan which shall be refinanced by the Term Loan hereunder) set forth
therein, the commitments under the Original Agreements shall be terminated.
(m) FEES AND EXPENSES. On or prior to the Closing Date, the Agents shall have
received (x) the origination of fee payable by the Companies to the Agents
pursuant to a letter agreement dated August 14, 2000 among the Companies and
the Agents, and each Lender shall have received its portion of such fee as
agreed in writing between the Agents and each Lender, and (y) for itself all
fees payable pursuant to Section 3.04(c) and reimbursement of expenses in
accordance with Section 10.03(b).
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(n) CERTAIN AGREEMENTS. The Administrative Agent shall have received, with a
copy for each Lender, a certificate of an Executive Officer of EDO certifying
that attached thereto is (i) a true, correct and complete copy of the indenture
pursuant to which the Subordinated Debentures were issued, as in effect on the
date hereof and (ii) a true, correct and complete copy of EDO ESOP Loan
Agreement as in effect on the date hereof.
(o) MANAGEMENT LOANS. On the Closing Date the Administrative Agent shall have
received a collateral assignment pursuant to the Security Agreement executed by
each Company of each promissory note evidencing a loan from EDO or AIL to its
management as permitted pursuant to Section 7.06(e).
(p) OTHER INFORMATION, DOCUMENTATION. The Lenders shall have received such
other and further information and documentation as they may require, including,
but not limited to, any information or documentation relating to compliance by
the Companies and each Guarantor with the requirements of all Environmental
Laws.
(q) COMPLETION OF PROCEEDINGS. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by the Loan Documents, shall be satisfactory in form
and substance to the Agents, and their respective counsel.
SECTION 5.02. CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligation of each
Lender to make each Loan hereunder, including, without limitation, the initial
Loan, is subject to the conditions precedent set forth in Section 5.01 and the
following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties by the
Companies pursuant to this Agreement and the other Loan Documents to which each
is a party shall be true and correct in all material respects on and as of the
Borrowing Date, with the same effect as though such representations and
warranties had been made on and as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred and be
continuing on the Borrowing Date or will result after giving effect to the Loan
requested.
(c) AVAILABILITY. After giving effect to any requested Revolving Credit Loan,
the Aggregate Outstandings shall not exceed the Total Revolving Credit
Commitment.
Each borrowing hereunder shall constitute a representation and warranty of each
Company that the statements contained in clauses (a), (b), and (c) of Section
5.02 are true and correct on and as of the Borrowing Date.
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ARTICLE VI
AFFIRMATIVE COVENANTS
Each Company, jointly and severally, covenants and agrees with the Lenders that
so long as the Commitments remain in effect, or any of the principal of or
interest on the Notes or any other Obligations hereunder shall be unpaid it
will, and will cause each Guarantor to:
SECTION 6.01. EXISTENCE, PROPERTIES, INSURANCE. Do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate or
limited liability existence as applicable, rights and franchises and comply in
all material respects with all laws applicable to it; at all times maintain,
preserve and protect all franchises and trade names material to its business
and preserve all of its property used or useful in and material to the conduct
of its business, and keep the same in good repair, working order and condition,
normal wear and tear excepted, and from time to time make, or cause to be made,
all needful and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection therewith
may be properly and advantageously conducted in the ordinary course at all
times; and at all times maintain insurance covering its assets and its
businesses with financially sound and reputable insurance companies or
associations in such amounts and against such risks (including, without
limitation, hazard, business interruption, public liability and product
liability) as are usually carried by companies engaged in the same or similar
business. Each such policy of insurance of the Companies shall name the
Administrative Agent as loss payee and additional insured and shall provide for
at least thirty (30) days' prior written notice to the Administrative Agent of
any modification or cancellation of such policies. Each Company shall provide
to the Administrative Agent promptly upon receipt thereof evidence of the
annual renewal of each such policy.
SECTION 6.02. PAYMENT OF INDEBTEDNESS AND TAXES. (a) Pay all indebtedness and
obligations, now existing or hereafter arising, as and when due and payable,
and (b) pay and discharge or cause to be paid and discharged promptly all
taxes, assessments and government charges or levies imposed upon it or upon its
income and profits, or upon any of its property, real, personal or mixed, or
upon any part thereof, before the same shall become in default, as well as all
lawful claims for labor, materials and supplies or otherwise which, if unpaid,
might become a lien or charge upon such properties or any part thereof;
provided, however, that neither any Company nor any Guarantor shall be required
to pay and discharge or cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as the validity thereof shall be
contested in good faith by appropriate proceedings, and such Company or such
Guarantor, as the case may be, shall have set aside on its books adequate
reserves determined in accordance with Generally Accepted Accounting Principles
with respect to any such tax, assessment, charge, levy or claim so contested;
further, provided that, subject to the foregoing proviso, each Company and each
Guarantor shall pay or cause to be paid all such taxes, assessments, charges,
levies or claims upon the commencement of proceedings to foreclose any lien
which has attached as security therefor.
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SECTION 6.03. FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to each Lender:
(a) (i) as soon as available, but in any event within 105 days after the end of
each fiscal year of EDO, a copy of the audited consolidated balance sheet of
EDO and its Subsidiaries as of the end of such year and the related audited
consolidated statements of income, shareholders equity and cash flow for such
year, setting forth in comparative form the respective figures as of the end of
and for the previous fiscal year, and accompanied by a report thereon of
independent certified public accountants of recognized standing selected by EDO
and reasonably satisfactory to the Lenders (the "Auditor"), which report shall
be unqualified; and (ii) as soon as available, but in any event within 105 days
after the end of each fiscal year of EDO, a copy of the corresponding
management prepared consolidating financial statements and in each case of (i)
and (ii), prepared in accordance with Generally Accepted Accounting Principles,
applied on a consistent basis;
(b) (i) as soon as available, but in any event not later than 60 days after the
end of the first, second and third fiscal quarters of EDO, a copy of the
consolidated and consolidating interim balance sheet of EDO and its
Subsidiaries as of the end of each such quarter and the related interim
statements of income, shareholders equity and cash flow for such quarter and
the portion of the fiscal year through such date and setting forth in each case
in comparative form the respective figures for the corresponding date and
period in the previous fiscal year, prepared by EDO in accordance with
Generally Accepted Accounting Principles, applied on a consistent basis, and
accompanied by a certificate to that effect executed by the Chief Financial
Officer of EDO:
(c) a certificate prepared and signed by the Chief Financial Officer with each
delivery required by clauses (a) and (b) as to whether or not, as of the close
of such preceding period and at all times during such preceding period, the
Companies and the Guarantors were in compliance with all the provisions in this
Agreement, showing computation of financial covenants and quantitative negative
covenants, and if the Chief Financial Officer shall have obtained knowledge of
any Default or Event of Default, it shall disclose in such certificate such
Default or Event of Default and the nature thereof;
(d) at all times indicated in clauses (a) above a copy of the management
letter, if any, prepared by the Auditor;
(e) on or prior to the tenth day of each calendar quarter a "job status report"
substantially in the form previously provided to the Lenders certified by the
Chief Financial Officer and current as of the last Business Day of the
preceding calendar quarter;
(f) promptly after filing thereof, copies of all regular and periodic financial
information, proxy materials and other information and reports which any
Company or any Guarantor shall file with the Securities and Exchange
Commission;
(g) promptly after submission to any government or regulatory agency, all
documents and information furnished to such government or regulatory agency
other than such
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documents and information prepared in the normal course of business and which
could not result in any adverse action to be taken by such agency which action
could reasonably be expected to have a Material Adverse Effect;
(h) within ten (10) days after the end of each calendar quarter commencing with
the quarter ending September 30, 2000 a completed Borrowing Base Certificate;
and
(i) promptly, from time to time, such other information regarding the
operations, business affairs and condition (financial or otherwise) of the
Companies or the Guarantors as any Lender may reasonably request.
SECTION 6.04. BOOKS AND RECORDS; ACCESS TO PREMISES. Maintain financial
records in accordance with Generally Accepted Accounting Principles and permit
representatives of any Lender, in coordination with the Administrative Agent,
to have access during normal business hours to the premises of each Company and
the Guarantors upon prior written request, and to examine and make excerpts
from the minute books, books of accounts, reports and other records and to
discuss the affairs, finances and accounts of each Company and the Guarantors
with their respective principal officers or with their respective independent
accountants, permit representatives of the Administrative Agent to conduct such
audits (including, without limitation, field audits of each Company and each
Guarantor's accounts receivable and inventory) as the Administrative Agent
reasonably deems necessary. The costs and expenses of one field audit during
each fiscal year and all field audits performed after the occurrence of an
Event of Default shall be for the account of each Company and the Guarantors
and shall be payable upon demand of the Administrative Agent.
SECTION 6.05. NOTICE OF ADVERSE CHANGE. Promptly notify each Lender in
writing of (a) any change in the business or the operations of any Company or
any Guarantor which could have a Material Adverse Effect, and (b) any
information which indicates that any financial statements which are the subject
of any representation contained in this Agreement, or which are furnished to
the Agents or the Lenders pursuant to this Agreement, fail, in any material
respect, to present fairly, the financial condition and results of operations
purported to be presented therein, disclosing the nature thereof.
SECTION 6.06. NOTICE OF DEFAULT. Promptly notify each Lender of any Default
or Event of Default which shall have occurred, which notice shall include a
written statement as to such occurrence, specifying the nature thereof and the
action, if any, which is proposed to be taken with respect thereto.
SECTION 6.07. NOTICE OF LITIGATION. Promptly notify each Lender of any
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency which, if adversely determined against any
Company or any Guarantor on the basis of the allegations and information set
forth in the complaint or other notice of such action, suit or proceeding, or
in the amendments thereof, if any, could reasonably be expected to have a
Material Adverse Effect.
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SECTION 6.08. NOTICE OF DEFAULT IN OTHER AGREEMENTS. Promptly notify each
Lender of any default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument to which any Company or any Guarantor is a party which default could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.09. NOTICE OF ERISA EVENT. Promptly deliver to each Lender a
certificate of the Chief Financial Officer of each Company setting forth
details as to such occurrence and such action, if any, which a Company, a
Guarantor or an ERISA Affiliate is required or proposes to take, together with
any notices required or proposed to be given to or filed with or by such
Company, such Guarantor, such ERISA Affiliate, the PBGC, a Plan participant or
the Plan administrator, with respect thereto: that a Reportable Event has
occurred with respect to a Plan, that an accumulated funding deficiency has
been incurred or an application may be or has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan, that
a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA, that one or more Plans have an Unfunded
Current Liability giving rise to a Lien under ERISA, that proceedings may be or
have been instituted to terminate a Plan, that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a
Plan, or that any Company, any Guarantor or any ERISA Affiliate will or may
incur any liability (including any contingent or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4201 or 4204 of ERISA. Each Company will deliver to each Lender a
complete copy of the annual report (Form 5500) of each Plan required to be
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to each Lender pursuant to the first sentence hereof, copies
of annual reports and any other notices received by each Company or such
Guarantor required to be delivered to each Lender hereunder shall be delivered
to each Lender no later than ten days after the later of the date such report
or notice has been filed with the Internal Revenue Service or the PBGC, given
to Plan participants or received by any Company or any Guarantor.
SECTION 6.10. NOTICE OF ENVIRONMENTAL LAW VIOLATIONS. Promptly notify each
Lender of the receipt of any notice of an action, suit, and proceeding before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending against any Company or any
Guarantor relating to any alleged violation of any Environmental Law.
SECTION 6.11. COMPLIANCE WITH APPLICABLE LAWS. Comply with the requirements
of all applicable laws, rules, regulations and orders of any Governmental
Authority, the breach of which could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.12. SUBSIDIARIES. Give the Administrative Agent prompt written
notice of the creation, establishment or acquisition, in any manner, of any
direct or indirect subsidiary of the Company not existing on the date hereof.
EDO, or its Subsidiary as appropriate, shall (i) execute a Pledge Agreement
with respect to (i) all the shares of capital stock or other ownership interest
of
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each such Subsidiary which is a Domestic Subsidiary, and (ii) 65% of the
outstanding shares of capital stock or other ownership interest of each such
Subsidiary which is a Foreign Subsidiary, in each case, together with
certificates and powers with respect to such interest duly endorsed in blank,
and in the event of uncertificated interests, UCC-1 financing statements
identifying such interest and executed by the holder of such interest) and (y)
cause each Domestic Subsidiary to execute a Guaranty and Security Agreement in
favor of the Administrative Agent within five days of the creation,
establishment or acquisition of such Subsidiary and in connection therewith
shall provide to the Administrative Agent, with a copy for each Lender, the
supporting documents identified in clauses (i), (ii) and (iii) of Section
5.01(f), in each case with respect to such Subsidiary, together with, if
required by the Agent, a favorable written opinion of counsel to such
Subsidiary and the pledgor of the interests in such Subsidiary, which opinion
shall be consistent in substance and as to the matters opined as the opinion
delivered pursuant to Section 5.01(e) on the Closing Date.
SECTION 6.13. ENVIRONMENTAL LAWS. Comply and use its best efforts to ensure
compliance by all tenants and subtenants of their respective properties, in all
material respects with the requirements of all Environmental Laws provide to
the Lenders all documentation in connection with such compliance that the
Lenders may reasonably request, and defend, indemnify, and hold harmless each
Agent and each Lender and their respective employees, agents, officers, and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs, or expenses of whatever kind or nature, known or
unknown, contingent or otherwise, arising out of, or in any way related to, (a)
the presence, disposal, or release of any Hazardous Materials on any property
at any time owned or occupied by the Companies or any Guarantor; (b) any
personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Materials; (c) any
lawsuit brought or threatened, settlement reached, or government order relating
to such Hazardous Materials, and/or (d) any violation of applicable
Environmental Laws, including, without limitation, reasonable attorney and
consultant fees, investigation and laboratory fees, court costs, and litigation
expenses.
SECTION 6.14. INTEREST RATE PROTECTION. With respect to AIL, maintain and
keep in full force and effect during the term of this Agreement, the interest
rate SWAP agreements currently maintained by AIL with Mellon Bank, N.A.
ARTICLE VII
NEGATIVE COVENANTS
Each Company, jointly and severally, covenants and agrees that so long as the
Commitments remain in effect or any of the principal of or interest on any Note
or any other Obligations hereunder shall be unpaid, it will not, and will not
cause or permit any Guarantor, directly or indirectly, to:
SECTION 7.01. LIENS. Incur, create, assume or suffer to exist any Lien on any
of their respective assets now or hereafter owned, other than:
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(a) Liens existing on the date hereof as set forth on Schedule II attached
hereto including any renewals or extensions thereof; provided that no such Lien
is extended to cover any additional property after the Closing Date and that
the amount of Indebtedness secured thereby is not increased;
(b) Liens for taxes, assessments or other governmental charges or levies not
yet delinquent or which are being contested in good faith by appropriate
proceedings, provided, however, that adequate reserves with respect thereto are
maintained on the books of the Companies or the Guarantors in accordance with
Generally Accepted Accounting Principles;
(c) carriers', warehousemens', mechanics', suppliers' or other like Liens
arising in the ordinary course of business and not overdue for a period of more
than 30 days or which are being contested in good faith by appropriate
proceedings in a manner which will not jeopardize or diminish the interest of
the Administrative Agent in any of the collateral subject to the Security
Documents;
(d) Liens incurred or deposits to secure the performance of tenders, bids,
trade contracts, leases, statutory obligations, surety, performance and appeal
bonds, and other obligations of similar nature incurred in the ordinary course
of business including liens on works in progress, inventory and unfinished
goods securing progress payments received under contracts with third parties;
(e) any attachment, judgment or similar Lien arising in connection with any
court or governmental proceeding provided that the execution or other
enforcement of such Lien is effectively stayed;
(f) easements, rights of way, restrictions and other similar charges or
encumbrances which in the aggregate do not interfere in any material respect
with the occupation, use and enjoyment by any Company or any Guarantor of the
property or assets encumbered thereby in the normal course of their respective
business or materially impair the value of the property subject thereto;
(g) deposits under workmen's compensation, unemployment insurance and social
security laws;
(h) liens granted to the Lenders or the Administrative Agent, for the ratable
benefit of the Lenders, under this Agreement or any other Loan Document;
(i) purchase money liens for fixed or capital assets including obligations with
respect to Capital Leases; provided in each case such purchase money lien does
not exceed 100% of the purchase price of, and encumbers only, the property
acquired; and
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(j) liens granted to Mellon Bank, N.A. to secure EDO's obligations under its
guaranty of the EDO ESOP Loan, the priority of such liens to be pari passu with
the priority of the liens referred to in clause (h) below and otherwise to be
governed by the Intercreditor Agreement.
SECTION 7.02. INDEBTEDNESS. Incur, create, assume or suffer to exist or
otherwise become liable in respect of any Indebtedness, other than:
(a) Indebtedness incurred prior to the date hereof as described in Schedule III
attached hereto including any renewals, refinancings or extensions thereof;
provided such renewals, refinancings or extensions do not result in an increase
in the aggregate principal amount of such Indebtedness;
(b) Indebtedness to the Agents and the Lenders under this Agreement, the Notes
or any other Loan Document;
(c) Indebtedness for trade payables incurred in the ordinary course of business
which are not overdue;
(d) Indebtedness consisting of guarantees permitted pursuant to Section 7.03;
(e) Subordinated Indebtedness; provided, however, that no Default or Event of
Default shall have occurred and be continuing or would occur after giving
effect to the incurrence of such Subordinated Indebtedness;
(f) Indebtedness secured by purchase money liens as permitted under Section
7.01(i);
(g) Indebtedness owing by a Company to any Guarantor or other Company or by any
Guarantor to a Company or the Company to any other Guarantor;
(h) Indebtedness arising from the election of a Participant in an ESOP to
receive an installment payment of benefits accrued to such Participant under
such ESOP; and
(i) the ESOP Loans.
SECTION 7.03. GUARANTIES. Guarantee, endorse, become surety for, or otherwise
in any way become or be responsible for the Indebtedness or obligations of any
Person, whether by agreement to maintain working capital or equity capital or
otherwise maintain the net worth or solvency of any Person or by agreement to
purchase the Indebtedness of any other Person, or agreement for the furnishing
of funds, directly or indirectly, through the purchase of goods, supplies or
services for the purpose of discharging the Indebtedness of any other Person or
otherwise, or enter into or be a party to any contract for the purchase of
merchandise, materials, supplies or other property if such contract provides
that payment for such merchandise, materials, supplies or other
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property shall be made regardless of whether delivery of such merchandise,
supplies or other property is ever made or tendered except:
(a) guaranties executed on or prior to the date hereof as described on Schedule
IV attached hereto including any renewals or extension thereof; provided the
contingent obligation thereunder after giving effect to such extension or
renewal is not greater than such contingent obligation immediately prior to
such extension or renewal;
(b) endorsements of negotiable instruments for collection or deposit in the
ordinary course of business;
(c) guaranties of any Indebtedness under this Agreement or any other
Indebtedness permitted under Section 7.02; and
(d) the guaranty by EDO of the EDO ESOP Loan.
SECTION 7.04. SALE OF ASSETS. Sell, assign, lease, transfer or otherwise
dispose of any of their respective properties and assets, except for (a) the
sale of inventory disposed of in the ordinary course of business and (b) the
sale or other disposition of properties or assets no longer used or useful in
the conduct of their respective businesses.
SECTION 7.05. SALES OF RECEIVABLES. Sell, transfer, discount or otherwise
dispose of notes, accounts receivable or other obligations owing to any Company
or any Guarantor, with or without recourse, except for collection in the
ordinary course of business.
SECTION 7.06. LOANS AND INVESTMENTS. Make or commit to make any advance,
loan, extension of credit, or capital contribution to, or purchase or hold
beneficially any stock or other securities, or evidence of Indebtedness of,
purchase or, except as permitted pursuant to Section 7.12, acquire all or a
substantial part of the assets of, make or permit to exist any interest
whatsoever in, any other Person except (a) for the ownership of stock of any
Subsidiaries existing as of the Closing Date or of any Subsidiary created after
the Closing Date provided the Companies have complied with their obligations
under Section 6.13 with respect to such Subsidiary; and further provided all of
the outstanding equity interests of such Subsidiary are owned by the Companies
and/or the Guarantors; (b) the AIL ESOP Loans; (c) Eligible Investments; (d)
loans and investments made by any Company in any Guarantor or in any other
Company or by any Guarantor in any Company or any other Guarantor; (d)
extension of trade credit to customers of the Companies and the Guarantors in
the ordinary course of business; (e) loans and advances outstanding on the date
hereof from AIL and EDO to their respective management in an aggregate
principal amount not to exceed $5,000,000; and (f) mandatory repurchases of
common stock required pursuant to the terms of the ESOPS; provided, however, no
Default or Event of Default shall have occurred and be continuing or would
occur after giving effect thereto.
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SECTION 7.07. NATURE OF BUSINESS. Change or alter, in any material respect,
the nature of its business from the nature of the business engaged in by it on
the date hereof.
SECTION 7.08. SALE AND LEASEBACK. Enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property,
whether real or personal, used or useful in its business, whether now owned or
hereafter acquired, of it, if at the time of such sale or disposition it
intends to lease or otherwise acquire the right to use or possess (except by
purchase) such property or like property for a substantially similar purpose.
SECTION 7.09. FEDERAL RESERVE REGULATIONS. Permit any Loan or the proceeds of
any Loan to be used for any purpose which violates or is inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
SECTION 7.10. ACCOUNTING POLICIES AND PROCEDURES. Permit any change in the
accounting policies and procedures of the Companies or any Guarantor, including
a change in fiscal year, provided, however, that any policy or procedure
required to be changed by the Financial Accounting Standards Board (or other
board or committee thereof) in order to comply with Generally Accepted
Accounting Principles may be so changed.
SECTION 7.11. HAZARDOUS MATERIALS. Cause or permit any of its properties or
assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce or process Hazardous Materials, in
compliance, in all material respects, with all applicable federal, state and
local laws or regulations, or cause or permit, as a result of any intentional
or negligent act or omission on the part of any Company, a release of Hazardous
Materials onto such property or asset or onto any other property if such
release could reasonably be expected to have a Material Adverse Effect.
SECTION 7.12. LIMITATIONS ON FUNDAMENTAL CHANGES. Merge or consolidate with,
or sell, assign, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether
now or hereafter acquired) to, any Person, or, acquire all of the stock or all
or substantially all of the assets or the business of any Person or liquidate,
wind up or dissolve or suffer any liquidation or dissolution; provided,
however, (a) any Company or Guarantor may acquire the stock or assets or
business of a Person pursuant to a Permitted Acquisition and (b) any Subsidiary
of EDO may merge with (x) any Company provided that such Company shall be the
continuing or surviving entity, or (y) with any one or more Subsidiaries of
EDO.
SECTION 7.13. FINANCIAL COVENANTS.
(a) Consolidated Tangible Net Worth plus Subordinated Debt. Permit
Consolidated Tangible Net Worth plus Consolidated Subordinated Debt to be less
than the amount set forth below opposite the applicable period.
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Period Amount
Closing Date through December 30, 2000 $ 61,000,000
December 31, 2000 through December 30, 2001 $ 64,500,000
December 31, 2001 through December 30, 2002 $ 72,000,000
December 31, 2002 through December 30, 2003 $ 82,000,000
December 31, 2003 through December 30, 2004 $ 92,000,000
December 31, 2004 and thereafter $102,000,000
(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio at any
time during the period set forth below to be greater than the ratio set forth
below opposite the applicable period:
Period Ratio
Closing Date through December 30, 2001 2.25:1.00
December 31, 2001 through December 30, 2002 1.75:1.00
December 31, 2002 through December 30, 2003 1.50:1.00
December 31, 2003 through December 30, 2004 1.25:1.00
December 31, 2004 and thereafter 1.00:1.00
(c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio at any time to be less than the ratio set forth below
opposite the applicable period:
Period Ratio
Closing Date through December 31, 2000 1.00:1.00
January 1, 2001 and thereafter 1.05:1.00
(d) Consolidated EBIT to Consolidated Interest Expense. Permit Consolidated
EBIT to Consolidated Interest Expense to be at any time less than the ratio set
forth below opposite the applicable period.
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Period Ratio
Closing Date through December 30, 2000 2.00:1.00
December 31, 2000 and thereafter 3.00:1.00
(e) Consolidated Total Unsubordinated Liabilities to Consolidated
Tangible Net Worth plus
Subordinated Debt. Permit the ratio of Consolidated Total Unsubordinated
Liabilities to
Consolidated Tangible Net Worth plus Subordinated Debt at any time to be
greater than the amount
set forth below opposite the applicable period.
Period Ratio
Closing Date through December 30, 2001 2.50:1.00
December 31, 2001 through December 30, 2002 1.75:1.00
December 31, 2002 through December 30, 2003 1.50:1.00
December 31, 2003 through December 30, 2004 1.25:1.00
December 31, 2004 and thereafter 1.00:1.00
SECTION 7.14. SUBORDINATED DEBT. Directly or indirectly prepay, defease,
purchase, redeem, or otherwise acquire any Subordinated Debt or amend,
supplement or otherwise modify any of the terms thereof without the prior
written consent of the Required Lenders.
SECTION 7.15. DIVIDENDS. Declare any dividend on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for the
purchase, redemption, defeasance, retirement or other acquisition of, any
shares of any class of stock of any Company or any Guarantor, whether now or
hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash, securities or property or in
obligations of the Companies or any Guarantor or in any combination thereof, or
permit any Subsidiary of EDO to make any payment on account of, or purchase or
otherwise acquire, any shares of any class of the stock of any Company or any
Guarantor from any Person; provided, however, (a) EDO may pay dividends on
shares of its ESOP cumulative preferred stock series A subject to and in
accordance with the certificate of incorporation, (b) EDO may declare and pay
dividends on its outstanding common stock in an amount not to exceed 12 cents
per share in the calendar year ending December 31, 2000 and for each calendar
quarter thereafter an amount not to exceed (x) fifty (50%) percent of
Consolidated Net Income for the immediately preceding fiscal quarter commencing
with the fiscal quarter ending March 31, 2001 less (y) dividends and
distributions made with respect to its preferred stock permitted pursuant to
clause (a) above, (c) each wholly-owned subsidiary of EDO may declare and pay
dividends ratably with respect to its capital stock, (d) EDO may make
contributions to the ESOP
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from time to time not to exceed an amount equal to the next scheduled payment
of principal and interest then due pursuant to the EDO ESOP Loan Agreement, and
(e) AIL may make contributions to the ATI ESOP from time to time in an amount
equal to the next scheduled payment of principal and interest then due pursuant
to the ATI ESOP Loan Agreement; provided with respect to each dividend and
distribution permitted hereunder no such dividend or distribution shall be made
if a Default or an Event of Default shall have occurred and be continuing or
would occur after giving effect to the proposed dividend or distribution.
SECTION 7.16. TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate, except in the ordinary course
of and pursuant to the reasonable requirements of any Company's or Guarantor's
business and upon fair and reasonable terms no less favorable to such Company
or Guarantor than they would obtain in a comparable arms-length transaction
with a Person not an Affiliate.
SECTION 7.17. IMPAIRMENT OF SECURITY INTEREST. Take or omit to take any
action which could reasonably be expected to have the result of impairing the
security interest in any property subject to a security interest in favor of
the Administrative Agent.
SECTION 7.18 BORROWING BASE. Permit, at any time, the aggregate Indebtedness
of the Companies and the Guarantors, other than Subordinated Indebtedness, to
exceed the Borrowing Base.
SECTION 7.19 NO AMENDMENTS. Without the prior written consent of the Required
Lenders, amend, supplement or otherwise modify (i) the certificate of
incorporation of EDO with respect to its preferred stock or (ii) any material
term of the ESOP Loans (without limitation, the interest rate thereon, and the
schedule and amount of principal payments required thereunder) or (iii) the
Subordinated Debentures or the indenture pursuant to which the Subordinated
Debentures were issued.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. EVENTS OF DEFAULT. In the case of the happening of any of the
following events (each an "Event of Default"):
(a) failure to pay (i) the principal of any Loan or any reimbursement
obligation with respect to a drawing under any Letter of Credit, in each case,
as and when due and payable or (ii) within five days after the same becomes due
and payable, any interest on any Loan or any fee or other amount due under this
Agreement or any other Loan Document;
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(b) default shall be made in the due observance or performance of (i) any
covenant, condition or agreement set forth in Article VI (other than Section
6.03(a), Section 6.03(b) and Sections 6.05 through 6.11) and such default,
shall continue unremedied for a period of 15 consecutive days or (ii) any other
covenant, conditions or agreement of the Company or any Guarantor to be
performed pursuant to this Agreement or any other Loan Document (other than
those specified in clause (a) of this Section 8.01);
(c) any representation or warranty made or deemed made in this Agreement or any
other Loan Document shall prove to be false or misleading in any material
respect when made or given or when deemed made or given;
(d) any report, certificate, financial statement (excluding financial
projections provided the same were prepared in good faith and upon reasonable
assumptions) or other instrument furnished in connection with this Agreement or
any other Loan Document or the borrowings hereunder, shall prove to be false or
misleading in any material respect when made or given or when deemed made or
given;
(e) default in the performance or compliance in respect of any agreement or
condition relating to any Indebtedness of any Company or any Guarantor in
excess of $150,000 individually or in the aggregate (other than the Notes) if
the effect of such default is to accelerate the maturity of such Indebtedness
or to permit the holder or obligee thereof (or a trustee on behalf of such
holder or obligee) to cause such Indebtedness to become due prior to the stated
maturity thereof, or, any such Indebtedness shall not be paid when due;
(f) any Company shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code or any other
federal or state bankruptcy, insolvency or similar law, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate manner, any
such proceeding or the filing of any such petition, (iii) apply for or consent
to the employment of a receiver, trustee, custodian, sequestrator or similar
official for such Company or for a substantial part of its property; (iv) file
an answer admitting the material allegations of a petition filed against it in
such proceeding, (v) make a general assignment for the benefit of creditors,
(vi) take corporate action for the purpose of effecting any of the foregoing;
or (vii) become unable or admit in writing its inability or fail generally to
pay its debts as they become due; or any of the actions identified in the
preceding clauses (i) through (vii) shall have occurred with respect to any
Guarantor.
(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of any Company or of a substantial part of their respective property,
under Title 11 of the United States Code or any other federal or state
bankruptcy insolvency or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for such Company or for a
substantial part of their property, or (iii) the winding-up or liquidation of
any Company and such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall
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continue unstayed and in effect for 60 days; or any of the actions identified
in the preceding clauses (i), (ii) or (iii) shall have occurred with respect to
any Guarantor;
(h) One or more orders, judgments or decrees for the payment of money in excess
of $250,000 in the aggregate shall be rendered against any Company or any
Guarantor and the same shall not have been paid in accordance with such
judgment, order or decree and either (i) an enforcement proceeding shall have
been commenced by any creditor upon such judgment, order or decree, or (ii)
there shall have been a period of thirty (30) days during which a stay of
enforcement of such judgment, order or decree, by reason of pending appeal or
otherwise, was not in effect;
(i) any Plan shall fail to maintain the minimum funding standard required for
any Plan year or part thereof or a waiver of such standard or extension of any
amortization period is applied for or granted under Section 412 of the Code,
any Plan is terminated by any Company, any Guarantor or any ERISA Affiliate or
the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a Reportable Event shall have occurred with respect
to a Plan or any Company, any Guarantor, or any ERISA Affiliate shall have
incurred a liability to or on account of a Plan under Section 515, 4062, 4063,
4201 or 4204 of ERISA, and there shall result from any such event or events the
imposition of a lien upon the assets of any Company or any Guarantor or the
granting of a security interest on such assets, or a liability to the PBGC or a
Plan or a trustee appointed under ERISA or a penalty under Section 4971 of the
Code;
(j) any material provision of any Loan Document shall for any reason cease to
be in full force and effect in accordance with its terms or any Company or any
Guarantor shall so assert in writing;
(k) any of the Liens purported to be granted pursuant to any Security Document
shall fail or cease for any reason to be legal, valid and enforceable liens on
the collateral purported to be covered thereby or shall fail or cease to have
the priority purported to be created thereby;
(l) if an event of default (as therein defined) shall occur under the ESOP Loan
Documents; or
(m) EDO shall cease for any reason to be required to file periodic reports
under Section 13 of the Securities Exchange Act of 1934, as amended and the
regulations of the Securities Exchange Commission promulgated thereunder;
then, at any time thereafter during the continuance of any such event, the
Administrative Agent may, and, upon the request of the Required Lenders, shall,
take either or both of the following actions, at the same or different times,
(a) terminate the Commitments and (b) declare (i) the Notes, both as to
principal and interest, (ii) an amount equal to the Aggregate Letters of Credit
outstanding and (iii) all other Obligations, to be forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in the Notes to the
contrary notwithstanding; provided, however, that if an event specified in
Section 8.01(f) or
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(g) shall have occurred, the Commitments shall automatically terminate and
interest, principal and amounts referred to in the preceding clauses (i), (ii)
and (iii) shall be immediately due and payable without presentment, demand,
protest, or other notice of any kind, all of which are expressly waived,
anything contained herein or in the Notes to the contrary notwithstanding.
With respect to all Letters of Credit that shall not have matured or
presentment for honor shall not have occurred, the Companies shall provide the
Administrative Agent with Cash Collateral in an amount equal to the aggregate
undrawn amount of such Letters of Credit. Such Cash Collateral shall be
applied by the Administrative Agent to reimburse the Issuing Lender for
drawings under Letters of Credit for which the Issuing Lender has not been
reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Companies at such time or,
if the maturity of the Loans has been accelerated, be applied to satisfy other
Obligations with any amount remaining after such satisfactions to be returned
to the Companies or paid to such other party as may legally be entitled to the
same.
ARTICLE IX
THE AGENTS
SECTION 9.01. APPOINTMENT, POWERS AND IMMUNITIES.
Each Lender hereby irrevocably appoints and authorizes each Agent to act as its
Agent hereunder, under the Security Documents and the other Loan Documents with
such powers as are specifically delegated to such Agent by the terms of this
Agreement, the Security Documents and the other Loan Documents together with
such other powers as are reasonably incidental thereto. No Agent shall have
any duties or responsibilities except those expressly set forth in this
Agreement, the Security Documents and the other Loan Documents and shall not be
a trustee for any Lender, nor is any Agent acting in a fiduciary capacity of
any kind under this Agreement, the Security Documents or the other Loan
Documents or in respect thereof or in respect of any Lender. No Agent shall be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement, the Security Documents, or the other
Loan Documents, in any certificate or other document referred to or provided
for in, or received by any of them under, this Agreement, the Security
Documents or the other Loan Documents, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement,
the Security Documents or the other Loan Documents or any other document
referred to or provided for herein or therein or for the collectibility of the
Loans or for the validity, effectiveness or value of any interest or security
covered by the Security Documents or for the value of any collateral or for the
validity or effectiveness of any assignment, mortgage, pledge, security
agreement, financing statement, document or instrument, or for the filing,
recording, re-filing, continuing or re-recording of any thereof or for any
failure by any Company, or any of their respective Subsidiaries to perform any
of its obligations hereunder or under the other Loan Documents. Each Agent may
take all actions by itself and/or it may employ agents and attorneys-in-fact,
and shall not be responsible, except as to money or the securities received by
it or its authorized agents, for the negligence or misconduct of itself or its
employees or of any such agents or attorneys-in-fact, if such agents or
attorneys-in-fact are selected by it with reasonable care.
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No Agent nor any of its directors, officers, employees or agents shall be
liable or responsible for any action taken or omitted to be taken by it or them
hereunder, under the Security Documents or the other Loan Documents or in
connection herewith or therewith, except for its or their own gross negligence
or willful misconduct.
SECTION 9.02. RELIANCE BY AGENTS.
Each Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by such
Agent. As to any matters not expressly provided for by this Agreement, the
Security Documents or the other Loan Documents, each Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder, under
the Security Documents or the other Loan Documents in accordance with
instructions signed by the Required Lenders, or such other number of Lenders as
is specified in Section 10.04 hereof, and such instructions of the Required
Lenders or other number of Lenders as aforesaid and any action taken or failure
to act pursuant thereto shall be binding on all of the Lenders.
SECTION 9.03. EVENTS OF DEFAULT.
No Agent shall be deemed to have knowledge of the occurrence of a Default
(other than the non-payment of principal of, or interest on, the Loans to the
extent the same is required to be paid to the Administrative Agent for the
account of the Lenders) unless such Agent has received notice from a Lender or
a Company specifying such 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, the Administrative Agent shall give prompt notice thereof to the
Lenders (and shall give each Lender notice of each such non-payment). The
Administrative Agent shall (subject to Section 9.07 hereof) take such action
with respect to such Default as shall be directed by the Required Lenders,
except as otherwise provided in Section 10.04 hereof; provided that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may take such action, or refrain from taking such action,
with respect to such Default or an Event of Default as it shall deem advisable
in the best interest of the Lenders.
SECTION 9.04. RIGHTS AS A LENDER.
With respect to its Commitment and the Loans made by it, each 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
an Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Administrative Agent in its individual
capacity. Each Agent and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with any Company, any
Guarantor or any of their respective Affiliates, if it were not acting as an
Agent, and each Agent may accept fees and other consideration from any Company,
any Guarantor or any of
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their respective Affiliates, for services in connection with this Agreement,
the Security Documents or any of the other Loan Documents or otherwise without
having to account for the same to the Lenders.
SECTION 9.05. INDEMNIFICATION.
The Lenders shall indemnify each Agent (to the extent not reimbursed by the
Companies under Section 10.03 hereof), ratably in accordance with the aggregate
principal amount of the Loans made by the Lenders (or, if no Loans are at the
time outstanding, ratably in accordance with their respective Commitments), for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against such Agent
in any way relating to or arising out of this Agreement, the Security Documents
or any of the other Loan Documents or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby and
thereby (including, without limitation, the costs and expenses which the
Companies are obligated to pay under Section 10.03 hereof or under the
applicable provisions of any other Loan Document) or the enforcement of any of
the terms hereof or of the Security Documents, or of any other 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 such Agent.
SECTION 9.06. NON-RELIANCE ON AGENTS AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on any Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Companies and the
Guarantors and decision to enter into this Agreement and that it will,
independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement, the Security Documents or the other Loan
Documents. No Agent shall be required to keep itself informed as to the
performance or observance by the Companies and the Guarantors of this
Agreement, the Security Documents or the other Loan Documents or any other
document referred to or provided for herein or therein or to inspect the
properties or books of any Company or any Guarantor. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Administrative Agent hereunder or under the Security
Documents, or the other Loan Documents, no Agent shall have any duty or ability
to provide any Lender with any credit or other information concerning the
affairs, financial condition or business of any Company, which may come into
the possession of such Agent or any of its Affiliates.
SECTION 9.07. FAILURE TO ACT.
Except for action expressly required of an Agent hereunder, or under the
Security Documents, each Agent shall in all cases be fully justified in failing
or refusing to act hereunder or thereunder
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unless it shall 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
or continuing to take any such action.
SECTION 9.08. RESIGNATION OF AGENTS.
Subject to the appointment and acceptance of a successor Agent as provided in
this Section 9.08, the Administrative Agent or the Documentation Agent may
resign at any time by notifying the Lenders and the Companies. Upon any such
resignation, the Required Lenders shall have the right, in consultation with
the Companies, to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the resigning Agent gives notice of its resignation, then
the resigning Agent may, on behalf of the Lenders, appoint a successor Agent
which shall be a bank with an office in New York, New York, or an Affiliate of
any such bank. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the resigning Agent, and the resigning
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Companies to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Companies and
such successor. After an Agent's resignation hereunder, the provisions of this
Article and Section 10.03 shall continue in effect for the benefit of such
resigning Agent in respect of any actions taken or omitted to be taken by it
while it was acting as an Agent.
SECTION 9.09. SHARING OF COLLATERAL AND PAYMENTS.
In the event that at any time any Lender shall obtain payment in respect of a
Note or interest thereon, or a participation in any Letter of Credit, or
receive any collateral in respect thereof, whether voluntarily or
involuntarily, through the exercise of a right of banker's lien, set-off or
counterclaim against any Company or otherwise, in a greater proportion than the
proportion received by any other Lender in respect of the corresponding Note
held by it or interest thereon, or its participation in any Letter of Credit,
then the Lender so receiving such greater proportionate payment shall purchase
for cash from the other Lender or Lenders such portion of each such other
Lender's or Lenders' Loan, or participation in any Letter of Credit, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Lender receiving the
proportionate over-payment to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders each of which shall
have a lien on its ratable portion of the amount described hereinafter obtained
from the Companies; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from the Lender which
received the proportionate over-payment, such purchase shall be rescinded, and
the purchase price and benefits returned, to the extent of such recovery, but
without interest. The Companies agree, to the extent they may do so under
applicable law, that each Lender so purchasing a portion of another Lender's
Loan, or participation in any Letter of Credit, may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
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ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including
telecopy), and unless otherwise expressly provided herein, shall be
conclusively deemed to have been received by a party hereto and to be effective
on the day on which delivered by hand to such party or one Business Day after
being sent by overnight mail to the address set forth below, or, in the case of
telecopy notice, when acknowledged as received, or if sent by registered or
certified mail, three (3) Business Days after the day on which mailed in the
United States, addressed to such party at such address:
(a) if to the Administrative Agent, at
European American Bank
730 Veterans Memorial Highway
Hauppauge, New York 11788
Attention: Mr. Jason A. Quinn, Assistant Vice President
Telecopy: (516) 360-7112
(b) if to any Company, at
EDO Corporation
60 East 42nd St.
Suite 5010
New York, New York 10165
Attention: Chief Financial Officer
Telecopy: (212) 716-2051
with a copy to:
EDO Corporation
60 East 42nd St.
Suite 5010
New York, New York 10165
Attention: Law Department
(c) if to any Lender, to its address set forth in the signature page of this
Agreement and to the person so designated;
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(d) as to each such party at such other address as such party shall have
designated to the other in a written notice complying as to delivery with the
provisions of this Section 10.01.
SECTION 10.02. EFFECTIVENESS; SURVIVAL. This Agreement shall become effective
on the date on which all parties hereto shall have signed a counterpart copy
hereof and shall have delivered the same to the Administrative Agent. All
representations and warranties made herein and in the other Loan Documents and
in the certificates delivered pursuant hereto or thereto shall survive the
making by the Lenders of the Loans, in each case, as herein contemplated and
the execution and delivery to the Lenders of the Notes evidencing the Loans and
shall continue in full force and effect so long as the Obligations hereunder
are outstanding and unpaid and the Commitments are in effect. The obligations
of the Companies pursuant to Section 3.07, Section 3.08, Section 3.09 and
Section 10.03 shall survive termination of this Agreement and payment of the
Obligations.
SECTION 10.03. INDEMNITY AND EXPENSES. Each Company, jointly and severally,
agrees (a) to indemnify, defend and hold harmless the Administrative Agent,
each Lender and their respective officers, directors, employees, and affiliates
(each, an "indemnified person") from and against any and all losses, claims,
damages, liabilities or judgments to which any such indemnified person may be
subject and arising out of or in connection with the Loan Documents, the
financings contemplated hereby, the use of any proceeds of such financings or
any related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any of such indemnified
persons is a party thereto, and to reimburse each of such indemnified persons
upon demand for any reasonable legal or other expenses incurred in connection
with the investigation or defending any of the foregoing; provided that the
foregoing indemnity will not, as to any indemnified person, apply to losses,
claims, damages, liabilities, judgments or related expenses to the extent
arising from the wilful misconduct or gross negligence of such indemnified
person, (b) to pay or reimburse each Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the preparation and execution of
and any amendment, supplement or modification to this Agreement, the Notes any
other Loan Documents, and any other documents prepared in connection herewith
or therewith, and the consummation of the transactions contemplated hereby and
thereby, including without limitation, the reasonable fees and disbursements of
Farrell Fritz, P.C., counsel to the Agents, and (c) to pay or reimburse each
Lender and the Administrative Agent for all their costs and expenses incurred
in connection with the enforcement and preservation of any rights under this
Agreement, the Notes, the other Loan Documents, and any other documents
prepared in connection herewith or therewith, including, without limitation,
the reasonable fees and disbursements of counsel (including, without
limitation, in-house counsel) to the Agents and to the several Lenders,
including all such out-of-pocket expenses incurred during any work-out,
restructuring or negotiations in respect of the Obligations.
SECTION 10.04. AMENDMENTS AND WAIVERS. With the written consent of the
Required Lenders, the Administrative Agent and the Companies may, from time to
time, enter into written amendments, supplements or modifications hereto for
the purpose of adding any provisions to this Agreement or the Notes or any of
the other Loan Documents or changing in any manner the rights of the Lenders or
of the Companies hereunder or thereunder, and with the written consent of the
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Required Lenders, the Administrative Agent on behalf of the Lenders may execute
and deliver to the Companies a written instrument waiving, on such terms and
conditions as the Administrative Agent may specify in such instrument, any of
the requirements of this Agreement or the Notes or any of the other Loan
Documents or any Event of Default; provided, however, that no such waiver and
no such amendment, or supplement or modification shall (a) extend the maturity
of any Note or change the amortization schedule of any Term Note, or any
installment thereof, (b) reduce the rate or extend the time of payment of
interest on any Note or the amount of any reimbursement due in respect of any
Letter of Credit, or any fees payable to the Lenders hereunder, (c) reduce the
principal amount of any Note, (d) amend, modify or waive any provision of this
Section 10.04 or clause (vi) of the definition of "Permitted Acquisition", (e)
amend or modify any provision hereof specifying that all of the Lenders are
required to waive, amend or modify any rights hereunder or make any
determination granting consent hereunder, (f) consent to the assignment or
transfer by any Company or any Guarantor of any of its rights or obligations
under this Agreement or any other Loan Document, (g) except as expressly
permitted pursuant to this Agreement or any other Loan Document release any
collateral security granted to the Administrative Agent under the Security
Documents or (h) release any Guarantor from its Guaranty, in each case
specified in clauses (a) through (h) above without the written consent of all
the Lenders; and provided, further, that no such waiver and no such amendment,
supplement or modification shall (I) amend, modify, supplement or waive any
provision of Section IX with respect to any Agent without the written consent
of such Agent or (II) increase the amount of any Lenders' Commitment without
the written consent of such Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Companies, the Lenders, the Agents and all future holders
of the Notes.
SECTION 10.05. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Companies, the Lenders, the Administrative Agent, all future holders of the
Notes and their respective successors and assigns, except that the Companies
may not assign or transfer any of their rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking business
and in accordance with applicable law, at any time sell to one or more banks or
other financial institutions ("Participants") participating interests in any
Loan owing to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder. In the event of any
such sale by a Lender of participating interests to a Participant, such
Lender's obligations under this Agreement to the other parties under this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement, and the Companies and the Agents
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. The Companies agree
that if amounts outstanding under this Agreement or the Notes are due or unpaid
or shall have been declared or shall become due and payable on the occurrence
of an Event of Default, each Participant shall be deemed to have the right of
set-off in
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respect of its participating interest in amounts owing under this Agreement or
any Note to the same extent as if the amount of its participating interests
were owing directly to it as a Lender under this Agreement or any Note;
provided, however, that such right of set-off shall be subject to the
obligation of such Participant to share with the Lenders and the Lenders agree
to share with such Participant, as provided in Section 9.09. The Companies
agree that each Participant shall be entitled to the benefits of Sections 3.07,
3.08 and 3.09 with respect to its participation in the Commitments and in the
Loans and Letters of Credit outstanding from time to time; provided, however,
that no Participant shall be entitled to receive any greater amount pursuant to
such sections than the Transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred. No Participant shall
have the right to consent to any amendment to, or waiver of, any provision of
this Agreement, except the transferor Lender may provide in its agreement with
the Participant that such Lender will not, without the consent of the
Participant, agree to any amendment or waiver described in clause (a) through
clause (h) of Section 10.04.
(c) Any Lender may, in the ordinary course of its commercial banking business
and in accordance with applicable law, at any time sell to any Lender or any
domestic banking affiliate thereof, and, with the consent of the Administrative
Agent, and, provided no Event of Default has occurred and is continuing, the
consent of the Companies, such consent not to be unreasonably withheld or
delayed, to one or more additional banks or financial institutions ("Purchasing
Lenders") all or any part of its rights and obligations under this Agreement
and the Notes pursuant to an Assignment and Acceptance Agreement, executed by
such Purchasing Lender, such transferor Lender and the Administrative Agent,
and delivered to the Administrative Agent for its acceptance. Upon such
execution, delivery and acceptance from and after the effective date specified
in such Assignment and Acceptance Agreement, (i) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance Agreement, have the rights and obligations of a
Lender hereunder with Commitments as set forth therein and (ii) the transferor
Lender thereunder shall, to the extent provided in such Assignment and
Acceptance Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance Agreement covering all or the
remaining portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party hereto). Such
Assignment and Acceptance Agreement shall be deemed to amend this Agreement to
the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment Proportions
arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under or in respect of this
Agreement and the Notes. On or prior to the effective date specified in such
Assignment and Acceptance Agreement, the Company, shall execute and deliver to
the Administrative Agent, in exchange for the surrendered Note, a new Note to
the order of such Purchasing Lender in an amount equal to the Commitments
assumed by it pursuant to such Assignment and Acceptance Agreement and, if the
transferor Lender has retained any Commitment hereunder, a new Note to the
order of the transferor Lender in an amount equal to such Commitment retained
by it hereunder. Such new Notes shall be in a principal amount equal to the
principal amount of such surrendered Note, shall be dated the date of the Note
they replace and shall otherwise be in the form of the Note replaced thereby.
The Note surrendered
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by the transferor Lender shall be returned by the
Administrative Agent to the Companies marked "cancelled". Anything in this
Section 10.05 to the contrary notwithstanding, no transfer to a Purchasing
Lender shall be made pursuant to this paragraph (c) if such transfer by any one
transferor Lender to any one Purchasing Lender (other than a Purchasing Lender
which is a Lender hereunder prior to such transfer) (x) is less than $2,000,000
of the Commitments of such transferor Lender or (y) if less than all of the
Commitment of such transferor Lender is transferred, after giving effect to
such transfer the amount held by any Transferor Lender would be less than
$2,000,000. Each Purchasing Lender, which is not a Lender on the date hereof,
will not have on the date it becomes a Lender hereunder, Commitments in an
amount equal to (i) lesser of thirteen (13%) percent of the Total Commitment or
(ii) $10,000,000. Each transfer to a Purchasing Lender shall be made in the
same pro rata portion with respect to the Revolving Credit Commitment and the
Term Loan Commitments or, if all or any portion of the Term Loan Commitments
shall have expired, the Term Loans.
(d) The Administrative Agent shall maintain at its address referred to in
Section 10.01 a copy of each Assignment and Acceptance Agreement delivered to
it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the commitments of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error and the Companies, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for all
purposes of this Agreement. The Register shall be available for inspection by
the Companies or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance Agreement executed by a
transferor Lender and a Purchasing Lender, together with payment by the
Purchasing Lender to the Administrative Agent of a registration and processing
fee of $3,500 if the Purchasing Lender is not a Lender prior to the execution
of an Assignment and Acceptance Agreement and $2,500 if the Purchasing Lender
is a Lender prior to the execution of an Assignment and Acceptance Agreement,
the Administrative Agent shall (i) accept such Assignment and Acceptance
Agreement, (ii) record the information contained therein in the Register, and
(iii) give prompt notice of such acceptance and recordation to the Lenders and
the Company.
(f) Each Company authorizes each Lender (subject to Section 10.11) to disclose
to any Participant or Purchasing Lender (each, a "Transferee") and any
prospective Transferee any and all financial information in such Lender's
possession concerning the Companies and the Guarantors which has been delivered
to such Lender by or on behalf of any Company or any Guarantor pursuant to this
Agreement or which has been delivered to such Lender by the Companies in
connection with such Lender's credit evaluation of the Companies and the
Guarantors prior to entering into this Agreement.
(g) If, pursuant to this Section 10.05, any interest in this Agreement, a
participation agreement, or any Note is transferred to any transferee which is
organized under the laws of any
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jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the transferor Lender (for the benefit of the
transferor Lender, the Administrative Agent and the Companies) that under
applicable law and treaties no taxes will be required to be withheld by the
Administrative Agent, the Companies, or the transferor Lender with respect to
any payments to be made to such Transferee in respect of the Loans, (ii) to
furnish to the Administrative Agent, the transferor Lender and each Company
either U.S. Internal Revenue Service Form W-8ECI or U.S. Internal Revenue
Service Form W-8BEN (wherein such Transferee claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments hereunder)
and (iii) to agree (for the benefit of the Administrative Agent, the transferor
Lender and each Company) to provide the Administrative Agent, the transferor
Lender and the Company, a new Form W-8ECI or Form W-8BEN upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such Transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(h) Any Lender may at any time pledge or assign or grant a security interest in
all or any part of its rights under this Agreement and its Notes to a Federal
Reserve Bank, provided that no such assignment shall release the transferor
Lender from its Commitment or its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party to this Agreement.
SECTION 10.06. NO WAIVER; CUMULATIVE REMEDIES. Neither any failure nor any
delay on the part of any Lender or the Administrative Agent in exercising any
right, power or privilege hereunder or under any Note or any other Loan
Document shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise of any other right,
power or privilege. The rights, remedies, powers and privileges herein
provided or provided in the other Loan Documents are cumulative and not
exclusive of any rights, remedies powers and privileges provided by law.
SECTION 10.07. APPLICABLE LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
SECTION 10.08. SUBMISSION TO JURISDICTION; JURY WAIVER. EACH COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE
STATE OF NEW YORK, COUNTY OF NEW YORK, OR COUNTY OF NASSAU IN ANY ACTION, SUIT
OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH COMPANY
HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH FEDERAL OR STATE COURTS, THAT
THE SUIT, ACTION OR
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PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR THEREIN OR
THE SUBJECT MATTER HEREOF THEREOF MAY NOT BE LITIGATED IN OR BY SUCH FEDERAL OR
STATE COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH COMPANY AGREES
NOT TO ASSERT ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR PROCEEDING UNLESS
SUCH COUNTERCLAIM CONSTITUTES A COMPULSORY OR MANDATORY COUNTERCLAIM UNDER
APPLICABLE LAW OF CIVIL PROCEDURE. EACH COMPANY AGREES THAT SERVICE OF PROCESS
MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES
SET FORTH IN THIS AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.
EACH PARTY HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT.
SECTION 10.09. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement, any Note or any other Loan Document should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby.
SECTION 10.10. RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, the Administrative Agent and each Lender are each 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 the Administrative Agent or any Lender to or for the credit or
the account of any Company against any and all of the Obligations of any
Company now and hereafter existing under this Agreement and the Notes held by
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any Note and although such obligations may be
unmatured. The rights of the Administrative Agent and each Lender under this
Section 10.10 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which they may have.
SECTION 10.11. CONFIDENTIALITY. Each of the Lenders agrees that it will use
reasonable efforts not to disclose without the prior consent of the Company
(other than to affiliates of such Lenders and their respective directors,
employees, auditors, counsel or other professional advisors) any confidential
information with respect to any Company or any Guarantor which is furnished by
the Companies or any Guarantor; provided that any Lender may disclose any such
information (a) that is or has become generally available to the public other
than as a result of disclosure by such Lender in violation of this Section
10.11; (b) as may be required or appropriate (x) in any report, statement
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or testimony submitted to any municipal, state or federal or other governmental
regulatory body having or claiming to have jurisdiction over such Lender or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors or (y) in connection with any request or requirement of any such
regulatory body; (c) as may be required in response to any summons or subpoena
or in connection with any litigation; (d) to the extent required to comply with
any law, order, regulation or ruling applicable to such Lender; and (e) to any
prospective Transferee in connection with any contemplated transfer of any of
the Notes or any interest therein by such Lender; provided that such
prospective Transferee agrees to be bound by this Section 10.11 to the same
extent as such Lender. Each Lender agrees, to the extent practical, to provide
the Companies with prior notice of any disclosure of confidential information
required pursuant to clause (c) or (d) above so that the Companies may seek to
prevent or limit the disclosure of such information.
SECTION 10.12. HEADINGS. Section headings used herein are for convenience of
reference only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 10.13. CONSTRUCTION. This Agreement is the result of negotiations
between, and has been reviewed by, each Company, the Administrative Agent, the
Lenders and their respective counsel. Accordingly, this Agreement shall be
deemed to be the product of each party hereto, and no ambiguity shall be
construed in favor of or against either any Company or the Administrative
Agent, or any Lender.
SECTION 10.14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
taken together, shall constitute one and the same instrument.
SECTION 10.15. JOINT AND SEVERAL OBLIGATIONS.
(A) BENEFITS. THE LOANS WILL DIRECTLY OR INDIRECTLY BENEFIT EACH COMPANY
HEREUNDER SEVERALLY, AND ALL OF THEM JOINTLY, REGARDLESS OF THE FACT NO COMPANY
RECEIVES ALL OR PART OF THE PROCEEDS OF ANY OF THE LOANS.
(B) ACCEPTANCE OF JOINT AND SEVERAL LIABILITY. EACH OF THE COMPANIES IS
ACCEPTING JOINT AND SEVERAL LIABILITY HEREUNDER AND UNDER THE OTHER LOAN
DOCUMENTS IN CONSIDERATION OF THE FINANCIAL ACCOMMODATIONS TO BE PROVIDED BY
THE LENDERS UNDER THIS AGREEMENT, FOR THE MUTUAL BENEFIT, DIRECTLY AND
INDIRECTLY, OF EACH OF THE COMPANIES AND IN CONSIDERATION OF THE UNDERTAKINGS
OF EACH OTHER COMPANY TO ACCEPT JOINT AND SEVERAL LIABILITY FOR THE
OBLIGATIONS.
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(C) PAYMENT AND PERFORMANCE. EACH OF THE COMPANIES, JOINTLY AND SEVERALLY,
HEREBY IRREVOCABLY AND UNCONDITIONALLY ACCEPTS, NOT MERELY AS A SURETY BUT ALSO
AS A CO-DEBTOR, JOINT AND SEVERAL LIABILITY WITH THE OTHER COMPANIES, WITH
RESPECT TO THE PAYMENT AND PERFORMANCE OF ALL OF THE OBLIGATIONS, IT BEING THE
INTENTION OF THE PARTIES HERETO THAT ALL THE OBLIGATIONS SHALL BE THE JOINT AND
SEVERAL OBLIGATIONS OF EACH OF THE COMPANIES WITHOUT PREFERENCE OR DISTINCTION
AMONG THEM.
(D) FAILURE TO PERFORM. IF AND TO THE EXTENT THAT ANY OF THE COMPANIES SHALL
FAIL TO MAKE ANY PAYMENT WITH RESPECT TO ANY OF THE OBLIGATIONS AS AND WHEN DUE
OR TO PERFORM ANY OF THE OBLIGATIONS IN ACCORDANCE WITH THE TERMS THEREOF, THEN
IN EACH SUCH EVENT THE OTHER COMPANIES WILL MAKE SUCH PAYMENT WITH RESPECT TO,
OR PERFORM, SUCH OBLIGATION.
(E) WAIVER OF NOTICE; ASSENT TO ACTIONS; ETC. THE OBLIGATIONS OF EACH OF THE
COMPANIES UNDER THE PROVISIONS OF THIS SECTION 10.15 CONSTITUTE FULL RECOURSE
OBLIGATIONS OF EACH OF THE COMPANIES ENFORCEABLE AGAINST EACH SUCH COMPANY,
IRRESPECTIVE OF THE VALIDITY, REGULARITY OR ENFORCEABILITY OF THIS AGREEMENT AS
AGAINST ANY PARTICULAR COMPANY. EACH AND EVERY REPRESENTATION, WARRANTY,
COVENANT AND AGREEMENT MADE BY THE COMPANIES, OR ANY OF THEM, HEREUNDER AND
UNDER THE OTHER LOAN DOCUMENTS SHALL BE JOINT AND SEVERAL, WHETHER OR NOT SO
EXPRESSED, AND SUCH OBLIGATIONS OF ANY COMPANY SHALL NOT BE SUBJECT TO ANY
COUNTERCLAIM, SETOFF, RECOUPMENT OR DEFENSE BASED UPON ANY CLAIM ANY COMPANY
MAY HAVE AGAINST ANY OTHER COMPANY OR ANY LENDER OR AGENT, AND SHALL REMAIN IN
FULL FORCE AND EFFECT WITHOUT REGARD TO, AND SHALL NOT BE RELEASED, DISCHARGED
OR IN ANY WAY AFFECTED BY, ANY CIRCUMSTANCES OR CONDITION AFFECTING ANY OTHER
COMPANY, INCLUDING WITHOUT LIMITATION (A) ANY WAIVER, CONSENT, EXTENSION,
RENEWAL, INDULGENCE OR OTHER ACTION OR INACTION UNDER OR IN RESPECT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY AGREEMENT OR OTHER DOCUMENT
RELATED THERETO WITH RESPECT TO ANY OTHER COMPANY, OR ANY EXERCISE OR
NONEXERCISE OF ANY RIGHT, REMEDY, POWER OR PRIVILEGE UNDER OR IN RESPECT OF ANY
SUCH AGREEMENT OR INSTRUMENT WITH RESPECT TO ANY OTHER COMPANY, OR THE FAILURE
TO GIVE NOTICE OF ANY OF THE FOREGOING TO ANY OTHER COMPANY, (B) ANY INVALIDITY
OR UNENFORCEABILITY, IN WHOLE OR IN PART, OF ANY SUCH AGREEMENT OR INSTRUMENT
WITH RESPECT TO ANY OTHER COMPANY; (C) ANY FAILURE ON THE PART OF ANY OTHER
COMPANY FOR ANY REASON TO PERFORM OR COMPLY WITH ANY TERM OF ANY SUCH AGREEMENT
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OR INSTRUMENT; (D) ANY BANKRUPTCY, INSOLVENCY, REORGANIZATION, ARRANGEMENT,
READJUSTMENT, COMPOSITION, LIQUIDATION OR SIMILAR PROCEEDING WITH RESPECT TO
ANY OTHER COMPANY OR ITS PROPERTIES OR CREDITORS; OR (E) ANY OTHER OCCURRENCE
WHATSOEVER, WITHER SIMILAR OR DISSIMILAR TO THE FOREGOING, WITH RESPECT TO ANY
OTHER COMPANY. EACH COMPANY HEREBY WAIVES ANY REQUIREMENT OF DILIGENCE OR
PROMPTNESS ON THE PART OF THE LENDERS AND THE AGENT IN THE ENFORCEMENT OF THEIR
RIGHTS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT WITH RESPECT TO THE
OBLIGATIONS OF ITSELF OR OF ANY OTHER COMPANY. WITHOUT LIMITING THE FOREGOING
ANY FAILURE TO MAKE ANY DEMAND UPON, TO PURSUE OR EXHAUST ANY RIGHTS OR
REMEDIES AGAINST A COMPANY, OR ANY DELAY WITH RESPECT THERETO, SHALL NOT AFFECT
THE OBLIGATIONS OF ANY OTHER COMPANY HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the Companies, the Agents and the Lenders have caused this
Agreement to be duly executed by their duly authorized officers, as of the day
and year first above written.
EDO CORPORATION
By:__________________________
Name:
Title:
AIL SYSTEMS INC.
By:__________________________
Name:
Title:
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Revolving Credit EUROPEAN AMERICAN BANK
Commitment: $14,492,754 AS ADMINISTRATIVE AGENT AND AS A LENDER
Term Loan
Commitment: $ 5,507,246 By:__________________________
Name:
Title:
Lending Office for Prime
Rate Loans:
730 Veterans Memorial Highway
Hauppauge, New York 11788
Lending Office for Adjusted
Libor Loans:
730 Veterans Memorial Highway
Hauppauge, New York 11788
Address for Notices:
730 Veterans Memorial Highway
Hauppauge, New York 11788
Attention: Mr. Jason A. Quinn,
Assistant Vice President
Telecopy: (631) 360-7112
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Revolving Credit MELLON BANK, N.A.
Commitment: $12,681,159 AS DOCUMENTATION AGENT AND AS A LENDER
By: Mellon Financial Services Corporation,
as attorney-in-fact
Term Loan
Commitment: $ 4,818,841 By:____________________________
Name:
Title:
Lending Office for
Prime Rate Loans:
176 EAB Plaza
West Tower - 11th Floor
Uniondale, New York 11556-0176
Lending Office for Adjusted
Libor Loans:
176 EAB Plaza
West Tower - 11th Floor
Uniondale, New York 11556-0176
Address for Notices:
176 EAB Plaza
West Tower - 11th Floor
Uniondale, New York 11556-0176
Attention: Ms. Toni Badolato, Vice President
Telecopy: (516) 338-3070
<PAGE>
Revolving Credit BANK LEUMI USA
Commitment: $ 5,434,783
Term Loan
Commitment: $ 2,065,217 By:____________________________
Name:
Title:
Lending Office for
Prime Rate Loans:
562 Fifth Avenue, 10th Floor
New York, New York 10036
Lending Office for Adjusted
Libor Loans:
562 Fifth Avenue, 10th Floor
New York, New York 10036
Address for Notices:
562 Fifth Avenue, 10th Floor
New York, New York 10036
Attention: Mr. Paul Tine, Vice President
Telecopy: (212) 626-1311
<PAGE>
Revolving Credit THE DIME SAVINGS BANK
Commitment: $10,869,565 OF NEW YORK, FSB
Term Loan
Commitment: $ 4,130,435 By:____________________________
Name:
Title:
Lending Office for
Prime Rate Loans:
1377 Motor Parkway
Islandia, New York 11788
Lending Office for Adjusted
Libor Loans:
1377 Motor Parkway
Islandia, New York 11788
Address for Notices:
1377 Motor Parkway
Islandia, New York 11788
Attention: Ms. Tamra Lofaro
Telecopy: (631) 233-4048
<PAGE>
Revolving Credit FLEET BANK, N.A.
Commitment: $ 6,521,739
Term Loan
Commitment: $ 2,478,261 By:____________________________
Name:
Title:
Lending Office for
Prime Rate Loans:
300 Broad Hollow Road
Melville, New York 11747
Lending Office for Adjusted
Libor Loans:
300 Broad Hollow Road
Melville, New York 11747
Address for Notices:
300 Broad Hollow Road
Melville, New York 11747
Attention: Mr. James V. Maiorino
Telecopy: (631) 547-7701
