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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
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COMMISSION FILE NUMBER 1-8461
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GULFSTREAM AEROSPACE CORPORATION
P. O. Box 2206
500 Gulfstream Road
Savannah, Georgia 31402-2206
Telephone: (912) 965-3000
State of incorporation: Delaware
IRS identification number: 13-3554834
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Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No X
--- ---
As of November 11, 1996, there were 73,911,773 shares of
Gulfstream Aerospace Corporation Common Stock outstanding.
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GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Page No.
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets
September 30, 1996 and December 31, 1995............3
Consolidated Statements of Operations
Three and nine months ended
September 30, 1996 and 1995.........................4
Consolidated Statement of Stockholders' Equity
Nine months ended September 30, 1996................5
Consolidated Statements of Cash Flows
Nine months ended September 30, 1996 and 1995.......6
Notes to Consolidated Financial Statements......... 7-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............10-12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS....................................13
ITEM 2. CHANGES IN SECURITIES................................13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES......................13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS..............................................13
ITEM 5. OTHER INFORMATION....................................13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.....................14
SIGNATURE............................................14
<TABLE>
GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<CAPTION>
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- -------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 264,109 $ 223,312
Accounts receivable (less allowance
for doubtful accounts: $3,405 and
$3,437) 148,436 82,613
Inventories 598,122 393,125
Prepaids and other current assets 5,018 2,362
------------ -----------
Total current assets 1,015,685 701,412
Property and equipment, net 123,920 127,151
Tooling 48,005 46,412
Goodwill, net of accumulated
amortization: $7,053 and $6,244 36,069 36,877
Other intangible assets, net 56,824 60,628
Other assets and deferred charges 7,868 8,773
------------ ------------
Total Assets $ 1,288,371 $ 981,253
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt 66,532 53,065
Accounts payable 70,409 58,191
Accrued liabilities 85,487 79,911
Customer deposits - current portion 625,358 153,269
------------- -------------
Total current liabilities 847,786 344,436
Long-term debt
Accrued postretirement benefit cost 40,000 93,266
Customer deposits - long-term 107,072 102,021
Other long-term liabilities 96,550 158,325
Commitments and contingencies 63,024 65,665
Stockholders' equity
Preferred stock, Series A, 7% -
cumulative; par value $.01; shares
authorized: 10,000,000; shares
issued: 100 in 1995 and 96 in 1996;
Liquidation preference, $546,282,058
in 1995 and $450,000,000 in 1996 450,000 468,938
Common stock, Class A, Series A-1 and
A-2 par value $.01; shares authorized:
93,493,000; shares issued: 41,347,833
in 1995 and 41,360,333 in 1996 414 413
Common stock, Class B, par value $.01;
shares authorized: 15,780,000; shares
issued: 11,045,833 110 110
Additional paid-in capital 220,326 210,631
Accumulated deficit (482,017) (410,613)
Minimum pension liability (1,450) (1,450)
Unamortized stock plan expense (2,955)
Treasury stock, Common stock, Class A,
Series A-2, 8,220,833 shares (50,489) (50,489)
------------ ------------
Total stockholders' equity 133,939 217,540
------------ ------------
Total Liabilities and Stockholders'
Equity $ 1,288,371 $ 981,253
============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------- --------------
1996 1995 1996 1995
-------------- --------------
<S> <C> <C> <C> <C>
Net Revenues $283,834 $239,420 $742,506 $714,304
Cost and Expenses
Cost of sales 222,495 195,213 577,336 573,235
Selling and
administrative 24,819 22,445 70,009 65,096
Stock option
compensation
expense 1,463 - 6,663 -
Research and
development 16,356 14,708 51,102 48,784
Amortization of
intangibles and
deferred
charges 1,882 1,882 5,645 5,659
------- ------- ------- -------
Total Costs
and Expenses 267,015 234,248 710,755 692,774
------- ------- ------- -------
Income
From Operations 16,819 5,172 31,751 21,530
Interest income 3,613 1,465 11,206 2,891
Interest expense (3,185) (4,519) (10,351) (14,464)
------- ------- ------- -------
Net Income $17,247 $2,118 $32,606 $9,957
======= ======= ======= =======
Pro forma, for
Recapitalization and
Offering, net income per
share (Note 2) $0.22 $0.03 $0.42 $0.13
======= ======= ======= =======
Pro forma, for
Recapitalization and
Offering,common shares
outstanding (Note 2) 78,535 78,535 78,535 78,535
======= ======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In Thousands)
(Unaudited)
<CAPTION>
Common Stock
------------------- Minimum
Preferred Class A Additional Accumul- Pension Unamort- Total
Stock Series A- Paid-In ated Liability ized Treasury Stockholders
Series A 1 & A-2 Class B Capital Deficity Expense Stock Plan Stock Equity
--------- --------- -------- ---------- ---------- -------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AS OF
JANUARY 1,1996 $468,938 $ 413 $ 110 $ 210,631 $(410,613) $ (1,450) -- $ (50,489) $ 217,540
Net Income 32,606 32,606
Issuance of stock pursuant
to stock options 1 77 78
Repurchase of preferred
stock (18,938) (18,938)
Preferred stock dividend (104,010) (104,010)
Issuance of compensatory
common stock options 9,618 (2,955) 6,663
--------- --------- -------- ---------- ---------- -------- ---------- --------- -------------
BALANCE AS OF SEPTEMBER 30,
1996 $450,000 $ 414 $ 110 $ 220,326 $(482,017) $ (1,450) $ (2,955) $ (50,489) $ 133,939
========= ========= ======== ========== ========== ======== ========== ========= =============
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE>
GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1996 1995
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 32,606 $ 9,957
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 18,273 17,264
Postretirement benefit cost 5,051 4,902
Provision for loss on pre-owned aircraft 1,000 2,050
Non-cash stock option compensation expense 6,663
All other operating activities 322 276
Change in assets and liabilities:
Accounts receivable (66,048) 49,408
Inventories (205,997) (66,089)
Prepaids and other assets (2,656) (107)
Other assets and deferred charges (128) 467
Accounts payable 12,218 (8,329)
Accrued liabilities 5,576 7,268
Customer deposits 410,314 133,983
Other long-term liabilities (2,641) 299
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 214,553 151,349
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (9,518) (14,579)
Dispositions of property and equipment 24 30
Additions to tooling (1,593) (24,440)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (11,087) (38,989)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 78 10
Repurchase of preferred stock (18,938)
Repayment of term loans (39,799) (18,548)
Payment of dividends on preferred stock (104,010)
---------- ----------
NET CASH USED IN FINANCING ACTIVITIES (162,669) (18,538)
---------- ----------
Increase in cash and cash equivalents 40,797 93,822
Cash and cash equivalents, beginning of period 223,312 23,605
---------- ----------
Cash and cash equivalents, end of period $ 264,109 $ 117,427
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements
have been prepared by the Company pursuant to the rules of the
Securities and Exchange Commission ("SEC") and, in the opinion of
the Company, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of
financial position, results of operations and cash flows.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to SEC rules. The operating results for the three and
nine months ended September 30, 1996 are not necessarily
indicative of the results to be expected for the full year. It
is suggested that these financial statements be read in
conjunction with the Company's December 31, 1995 audited
consolidated financial statements and notes thereto included in
the Company's Registration Statement on Form S-1 (Reg. No. 333-
09897).
NOTE 2. PRO FORMA PER SHARE INFORMATION
Pro forma net income per share amounts are calculated based
upon net income, divided by the pro forma weighted average number
of common and common equivalent shares outstanding, assuming the
Recapitalization and Offering occurred at the beginning of all
periods (as discussed in Note 5) and assuming that all options to
purchase common stock were exercised (applying the treasury stock
method and using the initial public offering price of $24.00 per
share). Options to purchase common stock issued or granted in
the twelve months ended September 30, 1996 were treated as
outstanding for all periods reported. Historical net income per
common and common equivalent share is not presented as it is not
relevant.
NOTE 3. INVENTORIES
Inventories consisted of the following at:
<TABLE>
<CAPTION>
September December
30, 1996 31, 1995
(In thousands)
---------- ----------
<S> <C> <C>
Finished goods $ _ $ 17,996
Pre-owned aircraft 90,150 57,750
Work in process 317,690 173,756
Raw materials 80,332 75,768
Vendor progress payments 109,950 67,855
---------- ----------
$ 598,122 $ 393,125
========== ==========
</TABLE>
NOTE 4. CONTINGENCIES
In the normal course of business, lawsuits, claims and
proceedings have been or may be instituted or asserted against
the Company relating to various matters, including products
liability. Although the outcome of litigation cannot be
predicted with certainty and some lawsuits, claims or proceedings
may be disposed of unfavorably to the Company, management has
made provision for all known probable losses related to lawsuits
and claims and believes that the disposition of all matters which
are pending or asserted will not have a material adverse effect
on the financial statements of the Company.
GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 4. CONTINGENCIES (CONTINUED)
The Company is involved in a tax audit by the Internal
Revenue Service covering the years ended December 31, 1990 and
1991. The revenue agent's report includes several proposed
adjustments involving the deductibility of certain compensation
expense and items relating to the capitalization of the Company
as well as the allocation of the original purchase price for the
acquisition by the Company of the Gulfstream business, including
the treatment of advance payments with respect to and the cost of
aircraft that were in backlog at the time of the acquisition and
the amortization of amounts allocated to intangible assets. The
Company believes that the ultimate resolution of these issues
will not have a material adverse effect on its financial
statements because the financial statements already reflect what
the Company currently believes is the expected loss of benefit
arising from the resolution of these issues.
The Company is currently engaged in the monitoring and
cleanup of certain ground water at its Savannah facility under
the oversight of the Georgia Department of Natural Resources.
Expenses incurred for cleanup have not been significant. The
Company received in 1992, at its Long Beach facility, two
inquiries from the U.S. Environmental Protection Agency and, in
1991, at its Oklahoma facility, a soil contamination inquiry.
The Company believes other aspects of the Savannah facility, as
well as other Gulfstream properties, are being carefully
monitored and are in substantial compliance with current federal,
state, and local environmental regulations. The Company believes
the liabilities, if any, that will result from the above
environmental matters will not have a material adverse effect on
its financial statements.
Management of the Company expects that its new Gulfstream V
aircraft will be certified by the Federal Aviation Administration
by the end of 1996. While a significant delay in such
certification could have near term adverse consequences,
management believes that certification will occur on schedule.
NOTE 5. SUBSEQUENT EVENTS
On October 16, 1996, the Company issued 4,559,100 shares of
Common Stock, and selling stockholders sold 37,940,900 shares of
Common Stock, in an initial public offering pursuant to the
Securities Act of 1933 (the "Offering"). In connection and
simultaneously with the closing of the Offering, the Company (a)
effected a recapitalization plan (the "Recapitalization") which
included (i) the repurchase of all of its outstanding 7% Series A
Cumulative Preferred Stock (the "7% Cumulative Preferred Stock")
for a purchase price of $450 million plus approximately $1.3
million of unpaid dividends, (ii) the exchange of all
outstanding shares of Class A, Series A-2 and Class B Common
Stock for Class A, Series A-1 Common Stock, (iii) the
redesignation of all Class A, Series A-1 Common Stock into Common
Stock, (iv) a 1.5-for-1 stock split of the Common Stock, and (v)
the restatement of the Company's certificate of incorporation to
provide that the authorized capital stock of the Company consists
of 300,000,000 shares of Common Stock, par value of $.01 per
share, and 20,000,000 shares of Preferred Stock, par value of
$0.01 per share, and (b) issued 3,949,346 shares of Common Stock
to certain option holders pursuant to existing option agreements,
who subsequently sold those shares in the Offering.
Also, on October 16, 1996, as part of the Recapitalization
described above, the Company entered into a new long-term credit
agreement (the "Credit Agreement") under which the lenders, who
are parties to the Credit Agreement, made available to the
Company a $400 million term loan and a $250 million revolving
credit facility. A portion of the revolving credit facility, in
an amount not to exceed $150 million, may be used for standby and
commercial letters of credit and up to $20 million of the
revolving credit facility may be used for swingline loans. The
term loan will be repayable in consecutive quarterly installments
commencing June 30, 1997 with a final maturity on September 30,
2002, in aggregate amounts for each of the following periods as
GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5. SUBSEQUENT EVENTS (CONTINUED)
follows (with the installments within each year being equal):
1997 - $20.0 million; 1998 through 2001 - $75.0 million; 2002 -
$80.0 million. The Company will be required to pay commitment
fees on the average daily unutilized portion of the term loan
facility and the revolving credit facility, which fees will
initially be set at .375% per annum, and which may range from
.250% to .500% per annum based on a certain financial ratio.
The Credit Agreement permits the Company to choose between
two interest rate options: (i) the Adjusted Base Rate (the
"ABR"), which is based on the greater of (a) the prime rate
published by The Chase Manhattan Bank ("Chase") and (b) the
federal funds effective rate, or (ii) a Eurodollar Loan Rate. In
addition, swingline loans made pursuant to the Credit Agreement
will accrue interest at the ABR or the Money Market Rate, which
money market rate is based on the money market rate quoted by
Chase. The Credit Agreement contains financial and operating
covenants, including limitations on total indebtedness,
contingent obligations, liens and the payment of dividends, and
requires the maintenance of certain financial ratios.
Concurrently with entering into the Credit Agreement, the Company
repaid all amounts outstanding under its pre-existing credit
agreements totalling $107.7 million, and terminated such
agreements.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
the Notes to Consolidated Financial Statements beginning on page
7 and with Management's Discussion and Analysis of Financial
Condition and Results of Operations (MD&A) and the audited
Consolidated Financial Statements and Notes to Consolidated
Financial Statements appearing in the Company's Registration
Statement on Form S-1 (Reg. No. 333-09897).
COMPARISON OF RESULTS OF OPERATIONS FOR THE QUARTER AND NINE
MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
NET REVENUES. Net revenue increased $44.4 million, or
18.6%, from $239.4 million in the third quarter of 1995 to $283.8
million in the third quarter of 1996. In the third quarter of
1996, Gulfstream delivered nine new GIV-SPs, up from five in the
third quarter of 1995, offset by a decrease in the sale of pre-
owned aircraft ($36.2 million) resulting from a reduced number of
trade-ins requiring resales. During the nine months ended
September 30, 1996, total net revenues increased by $28.2
million, or 3.9%, to $742.5 million from $714.3 million for the
nine months ended September 30, 1995. For the nine month period
ended September 30, 1996, Gulfstream delivered 20 new GIV-SPs, up
from 19 in the same period in 1995. Other factors contributing
to the overall revenue increase in the nine month period ended
September 30, 1996 were higher Gulfstream IV-SP average selling
prices ($14.6 million), additional completion volume ($22.8
million), and increased international spares sales and service
center volume ($20.5 million). Offsetting these increases was a
decrease in the sale of pre-owned aircraft ($45.9 million)
resulting from a reduced number of trade-ins requiring resales
and the conclusion in late 1995 of a U.S. Department of Defense
logistical supply contract ($15.0 million).
COST OF SALES. Total cost of sales increased $27.3 million,
or 14.0%, from $195.2 million in the third quarter of 1995 to
$222.5 million in the third quarter of 1996. The increase was a
result of four additional new aircraft deliveries, partially
offset by two less pre-owned aircraft deliveries. Excluding pre-
owned aircraft, which generally are sold at break-even levels,
the gross profit percentage for the third quarter of 1996 was
24.7% compared to 24.3% for the third quarter 1995. Total cost
of sales increased by less than 1.0%, or $4.1 million, to $577.3
million for the nine months ended September 30, 1996 from $573.2
million for the nine months ended September 30, 1995. The
increase in total cost of sales during 1996 was due to increased
level of Gulfstream IV-SP deliveries, completion deliveries, and
spare sales and service volume. Excluding pre-owned aircraft,
the gross profit percentage increased to 26.0% for the nine
months ended September 30, 1996 from 25.2% for the comparable
period in 1995, primarily as a result of cost and cycle time
reduction initiatives and price appreciation on Gulfstream IV-SP
new aircraft and completion sales.
SELLING AND ADMINISTRATIVE EXPENSE. Selling and
administrative expense increased by $2.4 million, or 10.6%, from
$22.4 million for the third quarter of 1995 to $24.8 million for
the third quarter of 1996. For the nine month period ended
September 30, 1996, selling and administrative expense increased
by $4.9 million, or 7.5%, to $70.0 million, from $65.1 million
for the nine month period ended September 30, 1995. The dollar
increase principally resulted from increased advertising and
marketing expenses associated with the Gulfstream V program.
STOCK OPTION COMPENSATION EXPENSE. The issuance of options
to purchase common stock of the Company during the nine months
ended September 30, 1996 resulted in a non-cash compensation
charge of $6.7 million, of which $1.5 million was recorded in the
third quarter of 1996.
RESEARCH AND DEVELOPMENT EXPENSE. Research and development
expense increased by $1.7 million, or 11.2%, from $14.7 million
for the third quarter of 1995 to $16.4 million for the third
quarter of 1996. For the nine month period ended ended September
30, 1996, research and development expense increased by $2.3
million, or 4.8%, to $51.1 million, from $48.8 million for the
nine month period ended September 30, 1995. Substantially all
research and development expense was associated with the
Gulfstream V development program, which the Company expects to be
materially completed by the end of 1996.
AMORTIZATION OF INTANGIBLES AND DEFERRED CHARGES.
Amortization of intangibles and deferred charges of $1.9 million
and $5.7 million for the third quarter of 1996 and the nine
months ended September 30, 1996, respectively, remained
essentially unchanged from the comparable periods in 1995.
INTEREST INCOME AND EXPENSE. Interest income increased by
$2.1 million to $3.6 million in the third quarter of 1996 from
$1.5 million in the third quarter of 1995 and increased by $8.3
million to $11.2 million in the nine months ended September 30,
1996 from $2.9 million in the nine months ended September 30,
1995, in each case, as a result of an increase in cash generated
from operations. Interest expense decreased by $1.3 million to
$3.2 million for the third quarter of 1996 and by $4.1 million to
$10.4 million for the nine months ended September 30, 1996,
respectively, from comparable periods in 1995. This decrease was
due to limited use of the revolving credit facility and a
reduction in borrowings under the existing term loans.
INCOME TAXES. The Company had available at September 30,
1996 net operating loss carryforwards for regular federal income
tax purposes of approximately $150 million, which will begin
expiring in 2006. Although the Company recorded net income
during the nine months ended September 30, 1996 and the nine
months ended September 30, 1995, no provision for income taxes
was recorded in either period principally as a result of the
utilization of net operating loss carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity needs arise from working capital
requirements, capital expenditures, principal and interest
payments on long-term debt, and the payment of dividends on the
7% Cumulative Preferred Stock (which was repurchased on October
16, 1996 simultaneously with the consummation of the Offering).
During the nine months ended September 30, 1996, the Company
relied on cash flows from operations to finance these needs.
During the nine months ended September 30, 1996, $214.6
million of cash was generated from operations versus $151.3
million in the first nine months of 1995. This increase was
principally due to the increase in customer progress payments
associated with aircraft orders in backlog and deposits on new
Gulfstream V aircraft orders, a portion of which funds the
temporary inventory build-up associated with Gulfstream V
production occurring prior to initial customer aircraft
deliveries. The Company expects to begin deliveries of
Gulfstream V aircraft in the fourth quarter of 1996 with six
deliveries planned for 1996 and 27 deliveries planned for 1997.
During the nine months ended September 30, 1996, additions
to property and equipment were $9.5 million and capitalized
tooling increased $1.6 million.
During the nine months ended September 30, 1996, the Company
repurchased approximately four shares of 7% Cumulative Preferred
Stock at their stated value of $18.9 million, and paid
accumulated dividends of $104.0 million out of excess cash flow.
At September 30, 1996, borrowings under the Company's pre-
existing bank credit facilities were $106.5 million. The Company
made scheduled principal payments of $39.8 million during the
nine months ended September 30, 1996.
On October 16, 1996, Gulfstream Delaware Corporation, a
wholly owned subsidiary of the Company, entered into a new $650
million credit facility with Chase, as Administrative Agent (the
"Credit Agreement"). The Credit Agreement consists of a $400
million term loan facility and a $250 million revolving credit
facility. The Credit Agreement contains customary affirmative
and negative covenants including restrictions on the ability of
the Company and its subsidiaries to pay cash dividends, as well
as financial covenants, under which the Company must operate.
Scheduled repayments under the new term loan facility of $20
million in 1997, $75 million in each of the years 1998 through
2001, and $80 million in 2002 are expected to be repaid from cash
generated from operations.
On October 16, 1996, the Company completed an initial public
offering from which the Company received net proceeds of
approximately $100 million after deducting underwriting discounts
and other expenses. The Company used the net proceeds of the
Offering, together with the $400 million term loan under the new
Credit Agreement, to repurchase the 7% Cumulative Preferred Stock
and repay all the outstanding indebtedness under the Company's
pre-existing credit facilities and to pay fees and expenses
incurred in connection with the Offering and the refinancing of
the Company's indebtedness. See "Note 5. Subsequent Events"
included on page 8 of "Notes to Consolidated Financial
Statements".
The Company believes that the net proceeds of the Offering,
together with cash generated from operating activities, including
customer progress payments and deposits on new aircraft orders,
and borrowings available under the Credit Agreement, are
sufficient for the Company to meet its anticipated working
capital needs and planned capital expenditures.
In connection with orders for 28 Gulfstream V aircraft in
the backlog, the Company has offered customers trade-in options
(which may or may not be exercised) under which the Company will
accept trade-in aircraft, primarily Gulfstream IVs and Gulfstream
IV-SPs, at a guaranteed minimum trade-in price. In light of the
current market for pre-owned Gulfstream aircraft, management
believes that the fair market value of such aircraft will exceed
the specified trade-in values. As such, Gulfstream does not
believe the existence of such commitments will have a material
adverse effect on its results of operations, cash flow or
financial position.
On October 10, 1996, the Company reached an agreement in
principal with the Pension Benefit Guaranty Corporation (the
"PBGC") concerning funding of the Company's defined benefit
pension plans. Pursuant to this agreement, the Company has
agreed to contribute an additional $20 million in 1996 and a
total of $25 million annually in 1997 through 2000 to its pension
plans, which payments are expected to result in such plans being
fully funded. The payments to be made under this agreement were
already part of the Company's overall financial planning, and;
therefore, are not expected to have a material effect on the
Company's financial statements.
At September 30, 1996, Gulfstream had a firm contract
backlog of approximately $3.0 billion of revenues. This excludes
executed contracts with financing contingencies and letters of
intent with deposits.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not Applicable.
Item 2. CHANGES IN SECURITIES
Not Applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Prior to the closing of the Company's initial public
offering, the Company's authorized capital stock
consisted of (a) preferred stock, $0.01 par value per
share ("Preferred Stock"), (b) Class A Common Stock,
Series A-1, $0.01 par value per share ("Series A-1
Stock"), (c) Class A Common Stock, Series A-2, $0.01
par value per share, and (d) Class B Common Stock,
$0.01 par value per share ("Class B Stock"). Effective
August 30, 1996, all holders of Preferred Stock, Series
A-1 Stock, Series A-2 Stock and Class B Stock executed
a written consent approving (i) the amendment and
restatement of the Company's amended and restated
certificate of incorporation to provide that the
authorized capital stock of the Company would consist
of preferred stock and a single class of common stock,
(ii) the classification of the board of directors and
(iii) the entry of the Company into indemnification
agreements with its directors and certain of its
officers. These amendments became effective prior to
the closing of the Company's initial public offering.
Item 5. OTHER INFORMATION
From time to time, the Company may make certain oral
and written statements that contain forward looking
information and involve uncertainty. The Private
Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain statements containing forward
looking information. The Company is filing with this
report a cautionary statement identifying important
factors which could cause actual results to differ
materially from statements contained in this report,
future filings by the Company with the Securities and
Exchange Commission, the Company's press releases and
oral statements made by or on behalf of the Company.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 3.1 Restated Certificate of Incorporation
of the Company.
Exhibit 3.2 Restated By-Laws of the Company.
Exhibit 10.1 Credit Agreement, dated as of October
16, 1996, among Gulfstream Delaware
Corporation, The Chase Manhattan Bank
and the banks and other financial
institutions parties thereto
(including guaranty and pledge
agreement).
Exhibit 11.1 Computation of Pro Forma Earnings per
Common Share.
Exhibit 27.1 Financial Data Schedule
Exhibit 99.1 Cautionary Statement for Purposes of
the "Safe Harbor" Provisions of The
Private Securities Litigation Reform
Act of 1995.
(b) Report on Form No reports on Form 8-K were filed
8-K during the quarter ended September
30, 1996,as the Company was not
subject to the filing requirements
under Form 8-K prior to October 9,
1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
DATED: November 13, 1996
GULFSTREAM AEROSPACE CORPORATION
/s/ Chris A. Davis
-------------------------------------
Chris A. Davis
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting
Officer)
EXHIBIT INDEX
---------------
EXHIBIT NO. EXHIBIT PAGE NO.
----------- ------- --------
3.1 Restated Certificate of Incorporation of the Company.
3.2 Restated By-Laws of the Company.
10.1 Credit Agreement, dated as of October 16, 1996,
among Gulfstream Delaware Corporation.
The Chase Manhattan Bank and the banks and other
financial institutions parties thereto (including
guaranty and pledge agreement).
11.1 Computation of Pro Forma Earnings per Common Share.
27.1 Financial Data Schedule.
99.1 Cautionary Statement for Purpose of the "Safe Harbor"
Provisions of The Private Securities Litigation Reform
Act of 1995.
RESTATED CERTIFICATE OF INCORPORATION
OF
GULFSTREAM AEROSPACE CORPORATION
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
The undersigned, Chris A. Davis, certifies that she is
the Executive Vice President, Chief Financial Officer and
Secretary of Gulfstream Aerospace Corporation, a corporation
organized and existing under the laws of the State of Delaware
(the "Corporation"), and does hereby further certify as follows:
(1) The name of the Corporation is Gulfstream
Aerospace Corporation. The name under which the Corporation was
originally incorporated was Gulfstream Holdings Corp.
(2) The Corporation's original certificate of
incorporation was filed with the Secretary of State of the State
of Delaware on February 14, 1990.
(3) Certificates of Amendment of the Certificate of
Incorporation were filed with the Secretary of State of the State
of Delaware on March 14, 1990 and September 18, 1990. An Amended
and Restated Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware on January 28, 1992,
and a Certificate of Amendment of the Amended and Restated
Certificate of Incorporation was filed with the Secretary of
State of the State of Delaware on November 30, 1993.
(4) This Restated Certificate of Incorporation, which
restates, integrates and further amends the certificate of
incorporation of the Corporation, was duly adopted by unanimous
stockholder written consent in accordance with Sections 228, 242
and 245 of the General Corporation Law of the State of Delaware
(the "GCL").
(5) Pursuant to Section 103(d) of the GCL, this
Restated Certificate of Incorporation shall become effective at
8:00 a.m. on October 16, 1996 (the "Effective Time").
(6) The text of the Amended and Restated Certificate
of Incorporation of the Corporation as further amended hereby is
restated to read in its entirety as follows:
FIRST: The name of the Corporation is Gulfstream
Aerospace Corporation (the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in
the City of Wilmington, County of New Castle. The name of its
registered agent at that address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is to engage in
any lawful act or activity for which a corporation may be
organized under the GCL.
FOURTH: The total number of all shares of all classes
of capital stock which the Corporation shall have the authority
to issue is 320,000,000 divided into two classes of which
300,000,000 shares of par value $.01 per share shall be
designated Common Stock, and 20,000,000 shares of par value $.01
per share shall be designated Preferred Stock. At the Effective
Time, the terms of the Series A-1 Common Stock shall be amended
pursuant to this Restated Certificate of Incorporation and the
Series A-1 Common Stock shall be redesignated as Common Stock,
and each issued share of such Common Stock shall be subdivided
into 1.5 shares of Common Stock, with a par value of $.01 per
share.
A. Common Stock
1. Dividends. Subject to the preferential
rights, if any, of the Preferred Stock, the holders of shares of
Common Stock shall be entitled to receive, when and if declared
by the Board of Directors, out of the assets of the Corporation
which are by law available therefor, dividends payable either in
cash, in property, or in shares of Common Stock.
2. Voting Rights. Except as otherwise required
by law, at every annual or special meeting of stockholders of the
Corporation, every holder of Common Stock shall be entitled to
one vote, in person or by proxy, for each share of Common Stock
standing in such holder's name on the books of the Corporation.
3. Liquidation, Dissolution, or Winding Up. In
the event of any voluntary or involuntary liquidation,
dissolution, or winding up of the affairs of the Corporation,
after payment or provision for payment of the debts and other
liabilities of the Corporation and of the preferential amounts,
if any, to which the holders of Preferred Stock shall be
entitled, the holders of all outstanding shares of Common Stock
shall be entitled to share ratably in the remaining net assets of
the Corporation.
B. Preferred Stock
1. Issuance. The Board of Directors of the
Corporation is authorized, subject to limitations prescribed by
law, to provide for the issuance of shares of the Preferred Stock
of the Corporation from time to time in one or more series, each
of which series shall have such distinctive designation or title
as shall be fixed by the Board of Directors prior to the issuance
of any shares thereof. Each such series of Preferred Stock shall
have such voting powers, full or limited, or no voting powers,
and such preferences and relative, participating, optional or
other special rights and such qualifications, limitations or
restrictions thereof, as shall be stated in such resolution or
resolutions providing for the issue of such series of Preferred
Stock as may be adopted from time to time by the Board of
Directors prior to the issuance of any shares thereof pursuant to
the authority hereby expressly vested in it, all in accordance
with the laws of the State of Delaware.
2. Amendment. Except as may otherwise be
required by law or this Restated Certificate of Incorporation,
the terms of any series of Preferred Stock may be amended without
consent of the holders of any other series of Preferred Stock or
of any class of Common Stock of the Corporation.
FIFTH: The business and affairs of the Corporation
shall be managed by and under the direction of the Board of
Directors. The Board of Directors may exercise all such
authority and powers of the Corporation and do all such lawful
acts and things as are not by statute or this Restated
Certificate of Incorporation directed or required to be exercised
or done by the stockholders.
A. Number of Directors. Except as otherwise fixed by
or pursuant to the provisions of this Restated Certificate of
Incorporation relating to the rights of the holders of Preferred
Stock to elect directors under specified circumstances, the
number of directors shall be fixed from time to time exclusively
by the Board of Directors pursuant to a resolution adopted by a
majority of the then authorized number of directors of the
Corporation, but in no event shall the number of directors be
fewer than three. No director need be a stockholder.
B. Classes and Terms of Directors. The directors
shall be divided into three classes (I, II and III), as nearly
equal in number as possible, and no class shall include less than
one director. The term of office for members of Class I shall
expire at the annual meeting of stockholders in 1997; the initial
term of office for members of Class II shall expire at the annual
meeting of stockholders in 1998; and the initial term of office
for members of Class III shall expire at the annual meeting of
stockholders in 1999. At each annual meeting of stockholders
beginning in 1997, directors elected to succeed those directors
whose terms expire shall be elected for a term of office to
expire at the third succeeding annual meeting of stockholders
after their election, and shall continue to hold office until
their respective successors are elected and qualified. In the
event of any increase in the number of directors fixed by the
Board of Directors, the additional directors shall be so
classified that all classes of directors have as nearly equal
numbers of directors as may be possible. In the event of any
decrease in the number of directors, all classes of directors
shall be decreased equally as nearly as may be possible, but in
no case will a decrease in the number of directors shorten the
term of any incumbent director.
C. Newly-Created Directorships and Vacancies.
Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly created directorships resulting
from any increase in the number of directors or any vacancies in
the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or any other
cause shall be filled only by a majority of the directors then in
office, even if less than a quorum is then in office, or by the
sole remaining director, and shall not be filled by stockholders.
Directors elected to fill a newly created directorship or other
vacancies shall hold office for the remainder of the full term of
the class of directors in which the new directorship was created
or the vacancy occurred and until such director's successor has
been elected and has qualified.
D. Removal of Directors. Subject to the rights of
the holders of any series of Preferred Stock then outstanding,
the directors or any director may be removed from office at any
time, but only for cause, at a meeting called for that purpose,
and only by the affirmative vote of the holders of at least a
majority of the voting power of all issued and outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors, voting together as a single class.
E. Rights of Holders of Preferred Stock.
Notwithstanding the foregoing provisions of this Article FIFTH,
whenever the holders of any one or more series of Preferred Stock
issued by the Corporation shall have the right, voting separately
by series, to elect directors at an annual or special meeting of
stockholders, the election, term of office, filling of vacancies
and other features of such directorships shall be governed by the
rights and preferences of such Preferred Stock as set forth in
this Restated Certificate of Incorporation or in the resolution
or resolutions of the Board of Directors relating to the issuance
of such Preferred Stock, and such directors so elected shall not
be divided into classes pursuant to this Article FIFTH unless
expressly provided by such rights and preferences.
F. Written Ballot Not Required. Elections of
directors need not be by written ballot unless the Bylaws of the
Corporation shall otherwise provide.
SIXTH: To the fullest extent permitted under the law
of the State of Delaware, including the GCL, a director of the
Corporation shall not be personally liable to the Corporation or
its stockholders for damages for any breach of fiduciary duty as
a director. No amendment to or repeal of this Article SIXTH
shall apply to or have any effect on the liability or alleged
liability of any director or the Corporation for or with respect
to any acts or omissions of such director occurring prior to such
amendment or repeal. In the event that the GCL is hereafter
amended to permit further elimination or limitation of the
personal liability of directors, then the liability of a director
of the Corporation shall be so eliminated or limited to the
fullest extent permitted by the GCL as so amended without further
action by either the Board or Directors or the stockholders of
the Corporation.
SEVENTH: Each person who was or is made a party or is
threatened to be made a party to or is involved (including,
without limitation, as a witness) in any threatened, pending or
completed action, suit, arbitration, alternative dispute
resolution mechanism, investigation, administrative hearing or
any other proceeding, whether civil, criminal, administrative or
investigative ("Proceeding"), by reason of the fact that such
person (the "Indemnitee") is or was a director or officer of the
Corporation or is or was serving at the request of the
Corporation as a director or officer of another corporation or of
a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan,
whether the basis of such Proceeding is alleged action in an
official capacity as a director or officer or in any other
capacity while serving as such a director or officer, shall be
indemnified and held harmless by the Corporation to the full
extent permitted by law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), or by other
applicable law as then in effect, against all expense, liability,
losses and claims (including attorneys' fees, judgments, fines,
excise taxes under the Employee Retirement Income Security Act of
1974, as amended from time to time, penalties and amounts to be
paid in settlement) actually incurred or suffered by such
Indemnitee in connection with such Proceeding.
EIGHTH: In furtherance and not in limitation of the
powers conferred by statute, the Board of Directors is expressly
authorized to adopt, repeal, alter, amend or rescind the Bylaws
of the Corporation. In addition, the Bylaws of the Corporation
may be adopted, repealed, altered, amended or rescinded by the
affirmative vote of the holders of at least a majority of the
voting power of all of the issued and outstanding shares of
capital stock of the Corporation entitled to vote thereon.
NINTH: The Corporation reserves the right to repeal,
alter, amend or rescind any provision contained in this Restated
Certificate of Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred on stockholders
herein are granted subject to this reservation.
IN WITNESS WHEREOF, Gulfstream Aerospace Corporation
has caused this Restated Certificate of Incorporation to be
signed by Chris A. Davis, its Executive Vice President, Chief
Financial Officer and Secretary, on this 10th day of October, 1996.
GULFSTREAM AEROSPACE CORPORATION
By: /s/ Chris A. Davis
----------------------------
Chris A. Davis
Executive Vice President,
Chief Financial Officer and
Secretary
RESTATED BY-LAWS
OF
GULFSTREAM AEROSPACE CORPORATION
(hereinafter called the "Corporation")
(As of October 16, 1996)
ARTICLE I
OFFICES
-------
Section 1. Registered Office. The registered
office of the Corporation within the State of Delaware shall be
in the City of Wilmington, County of New Castle.
Section 2. Other Offices. The Corporation may also
have an office or offices other than said registered office at
such place or places, either within or without the State of
Delaware, as the Board of Directors shall from time to time
determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place of Meetings. All meetings of the
stockholders for the election of directors or for any other
purpose shall be held at any such time and place, either within
or without the State of Delaware as shall be designated from time
to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. Annual meetings of
stockholders shall be held on such date and at such time as shall
be designated from time to time by the Board of Directors and
stated in the notice of the meeting or in a duly executed waiver
thereof. At such annual meetings, the stockholders shall elect
by a plurality vote the directors standing for election and
transact such other business as may properly be brought before
the meeting in accordance with these Restated By-Laws.
Section 3. Special Meetings. Special meetings of
stockholders, for any purpose or purposes, unless otherwise
prescribed by statute may be called by the Board of Directors,
the Chairman of the Board of Directors, if one shall have been
elected, or the President and shall be called by the Secretary
upon the request in writing of a stockholder or stockholders
holding of record at least a majority of the voting power of the
issued and outstanding shares of capital stock of the Corporation
entitled to vote at such meeting.
Section 4. Notice of Meetings. Except as otherwise
expressly required by statute, written notice of each annual and
special meeting of stockholders stating the date, place and hour
of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be
given to each stockholder of record entitled to vote thereat not
less than ten nor more than sixty days before the date of the
meeting. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the
notice. Notice shall be given personally or by mail and, if by
mail, shall be sent in a postage prepaid envelope, addressed to
the stockholder at such stockholder's address as it appears on
the records of the Corporation. Notice by mail shall be deemed
given at the time when the same shall be deposited in the United
States mail, postage prepaid. Notice of any meeting shall not be
required to be given to any person who attends such meeting,
except when such person attends the meeting in person or by proxy
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting
is not lawfully called or convened, or who, either before or
after the meeting, shall submit a signed written waiver of
notice, in person or by proxy. Neither the business to be
transacted at, nor the purpose of, an annual or special meeting
of stockholders need be specified in any written waiver of
notice.
Section 5. Organization. At each meeting of
stockholders, the Chairman of the Board, if one shall have been
elected, or, in such person's absence or if one shall not have
been elected, the President, shall act as chairman of the
meeting. The Secretary or, in such person's absence or inability
to act, the person whom the chairman of the meeting shall appoint
secretary of the meeting, shall act as secretary of the meeting
and keep the minutes thereof.
Section 6. Conduct of Business. The chairman of
any meeting of stockholders shall determine the order of business
and the procedure at the meeting, including such regulation of
the manner of voting and the conduct of discussion as seems to
him or her in order. The date and time of the opening and
closing of the polls for each matter upon which the stockholders
will vote at a meeting shall be announced at the meeting.
Section 7. Quorum, Adjournments. The holders of a
majority of the voting power of the issued and outstanding shares
of capital stock of the Corporation entitled to vote thereat,
present in person or represented by proxy, shall constitute a
quorum for the transaction of business at all meetings of
stockholders, except as otherwise provided by statute or by the
Restated Certificate of Incorporation. If, however, such quorum
shall not be present or represented by proxy at any meeting of
stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have the power to
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented by proxy. At such adjourned meeting at which a
quorum shall be present or represented by proxy, any business may
be transacted which might have been transacted at the meeting as
originally called. If the adjournment is for more than thirty
days, or, if after adjournment a new record date is set, a notice
of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
Section 8. Voting. Except as otherwise provided by
statute or the Restated Certificate of Incorporation and these
Restated By-Laws, each stockholder of the Corporation shall be
entitled at each meeting of stockholders to one vote for each
share of capital stock of the Corporation standing in such
stockholder's name on the record of stockholders of the
Corporation:
(a) on the date fixed pursuant to the provisions
of Section 7 of Article V of these Restated By-Laws as
the record date for the determination of the
stockholders who shall be entitled to notice of and to
vote at such meeting; or
(b) if no such record date shall have been so
fixed, then at the close of business on the day next
preceding the day on which notice thereof shall be
given, or, if notice is waived, at the close of
business on the date next preceding the day on which
the meeting is held.
Each stockholder entitled to vote at any meeting of stockholders
may authorize another person or persons to act for such
stockholder by a proxy signed by such stockholder or such
stockholder's attorney-in-fact, but no proxy shall be voted after
three years from its date, unless the proxy provides for a longer
period. Any such proxy shall be delivered to the secretary of
the meeting at or prior to the time designated in the order of
business for so delivering such proxies. When a quorum is
present at any meeting, the affirmative vote of the holders of a
majority of the voting power of the issued and outstanding stock
of the Corporation entitled to vote thereon, present in person or
represented by proxy, shall decide any question brought before
such meeting, unless the question is one upon which by express
provision of statute or of the Restated Certificate of
Incorporation or of these Restated By-Laws, a different vote is
required, in which case such express provision shall govern and
control the decision of such question. Unless required by
statute, or determined by the chairman of the meeting to be
advisable, the vote on any question need not be by ballot. On a
vote by ballot, each ballot shall be signed by the stockholder
voting, or by such stockholder's proxy, if there be such proxy.
Section 9. List of Stockholders Entitled to Vote.
At least ten days before each meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of
each stockholder shall be prepared. Such list shall be open to
the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting, either at a place within the
city, town, or village where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by
any stockholder of the Corporation who is present.
Section 10. Inspectors. The Board of Directors
shall, in advance of any meeting of stockholders, appoint one or
more inspectors to act at such meeting or any adjournment
thereof. If any of the inspectors so appointed shall fail to
appear or act, the chairman of the meeting shall, or if
inspectors shall not have been appointed, the chairman of the
meeting may appoint one or more inspectors. Each inspector,
before entering upon the discharge of such inspector's duties,
shall take and sign an oath faithfully to execute the duties of
inspector at such meeting with strict impartiality and according
to the best of such inspector's ability. The inspectors shall
determine the number of shares of capital stock of the
Corporation outstanding and the voting power of each, the number
of shares represented at the meeting, the existence of a quorum,
the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the results,
and do such acts as are proper to conduct the election or vote
with fairness to all stockholders. On request of the chairman of
the meeting, the inspectors shall make a report in writing of any
challenge, request or matter determined by them and shall execute
a certificate of any fact found by them. No director or
candidate for the office of director shall act as an inspector of
an election of directors. Inspectors need not be stockholders.
Section 11. Consent of Stockholders in Lieu of
Meeting. Unless otherwise provided by statute or in the Restated
Certificate of Incorporation, any action required to be taken or
which may be taken at any annual or special meeting of the
stockholders of the Corporation may be taken without a meeting,
without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders
of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of the taking of any such
corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not
consented in writing.
Section 12. Advance Notice Provisions for Election
of Directors. Only persons who are nominated in accordance with
the following procedures shall be eligible for election as
directors of the Corporation. Nominations of persons for
election to the Board of Directors may be made at any annual
meeting of stockholders, or at any special meeting of
stockholders called for the purpose of electing directors, (a) by
or at the direction of the Board of Directors (or any duly
authorized committee thereof) or (b) by any stockholder of the
Corporation (i) who is a stockholder of record on the date of the
giving of the notice provided for in this Section 12 and on the
record date for the determination of stockholders entitled to
vote at such meeting and (ii) who complies with the notice
procedures set forth in this Section 12.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder such stockholder must have
given timely notice thereof in proper written form to the
Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary
must be delivered to or mailed and received at the principal
executive offices of the Corporation (a) in the case of an annual
meeting, not less than 60 days nor more than 90 days prior to the
date of the annual meeting; provided, however, that in the event
that less than 70 days' notice or prior public disclosure of the
date of the annual meeting is given or made to stockholders,
notice by the stockholder in order to be timely must be so
received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual
meeting was mailed or such public disclosure of the date of the
annual meeting was made, whichever first occurs; and (b) in the
case of a special meeting of stockholders called for the purpose
of electing directors, not later than the close of business on
the 10th day following the day on which notice of the date of the
special meeting was mailed or public disclosure of the date of
the special meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to
the Secretary must set forth (a) as to each person whom the
stockholder proposes to nominate for election as a director (i)
the name, age, business address and residence address of the
person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital
stock of the Corporation which are owned beneficially or of
record by the person and (iv) any other information relating to
the person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant
to Section 14 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations promulgated
thereunder; and (b) as to the stockholder giving the notice (i)
the name and record address of such stockholder, (ii) the class
or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by such
stockholder, (iii) a description of all arrangements or
understandings between such stockholder and each proposed nominee
and any other person or persons (including their names) pursuant
to which the nomination(s) are to be made by such stockholder,
(iv) a representation that such stockholder intends to appear in
person or by proxy at the meeting to nominate the persons named
in its notice and (v) any other information relating to such
stockholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to
Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a
written consent of each proposed nominee to be named as a nominee
and to serve as a director if elected.
No person shall be eligible for election as a director
of the Corporation unless nominated in accordance with the
procedures set forth in this Section 12. If the Chairman of the
meeting determines that a nomination was not made in accordance
with the foregoing procedures, the Chairman shall declare to the
meeting that the nomination was defective and such defective
nomination shall be disregarded.
Section 13. Advance Notice Provisions for Business
to be Transacted at Annual Meeting. No business may be
transacted at an annual meeting of stockholders, other than
business that is either (a) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the
Board of Directors (or any duly authorized committee thereof),
(b) otherwise properly brought before the annual meeting by or at
the direction of the Board of Directors (or any duly authorized
committee thereof) or (c) otherwise properly brought before the
annual meeting by any stockholder of the Corporation (i) who is a
stockholder of record on the date of the giving of the notice
provided for in this Section 13 and on the record date for the
determination of stockholders entitled to vote at such annual
meeting and (ii) who complies with the notice procedures set
forth in this Section 13.
In addition to any other applicable requirements, for
business to be properly brought before an annual meeting by a
stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the
Corporation.
To be timely, a stockholder's notice to the Secretary
must be delivered to or mailed and received at the principal
executive offices of the Corporation not less than 60 days nor
more than 90 days prior to the date of the annual meeting;
provided, however, that in the event that less than 70 days'
notice or prior public disclosure of the date of the annual
meeting is given or made to stockholders, notice by the
stockholder in order to be timely must be so received not later
than the close of business on the 10th day following the day on
which such notice of the date of the annual meeting was mailed or
such public disclosure of the date of the annual meeting was
made, whichever first occurs.
To be in proper written form, a stockholder's notice to
the Secretary must set forth as to each matter such stockholder
proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at
the annual meeting, (ii) the name and record address of such
stockholder, (iii) the class or series and number of shares of
capital stock of the Corporation which are owned beneficially or
of record by such stockholder, (iv) a description of all
arrangements or understandings between such stockholder and any
other person or persons (including their names) in connection
with the proposal of such business by such stockholder and any
material interest of such stockholder in such business and (v) a
representation that such stockholder intends to appear in person
or by proxy at the annual meeting to bring such business before
the meeting.
No business shall be conducted at the annual meeting of
stockholders except business brought before the annual meeting in
accordance with the procedures set forth in this Section 13,
provided, however, that, once business has been properly brought
before the annual meeting in accordance with such procedures,
nothing in this Section 13 shall be deemed to preclude discussion
by any stockholder of any such business. If the Chairman of an
annual meeting determines that business was not properly brought
before the annual meeting in accordance with the foregoing
procedures, the Chairman shall declare to the meeting that the
business was not properly brought before the meeting and such
business shall not be transacted.
ARTICLE III
DIRECTORS
---------
Section 1. Place of Meetings. Meetings of the
Board of Directors shall be held at such place or places, within
or without the State of Delaware, as the Board of Directors may
from time to time determine or as shall be specified in the
notice of any such meeting.
Section 2. Annual Meeting. The Board of Directors
shall meet for the purpose of organization, the election of
officers and the transaction of other business, as soon as
practicable after each annual meeting of stockholders, on the
same day and at the same place where such annual meeting shall be
held. Notice of such meeting need not be given. In the event
such annual meeting is not so held, the annual meeting of the
Board of Directors may be held at such other time or place
(within or without the State of Delaware) as shall be specified
in a notice thereof given as hereinafter provided in Section 5 of
this Article III.
Section 3. Regular Meetings. Regular meetings of
the Board of Directors shall be held at such time and place as
the Board of Directors may fix. If any day fixed for a regular
meeting shall be a legal holiday at the place where the meeting
is to be held, then the meeting which would otherwise be held on
that day shall be held at the same hour on the next succeeding
business day.
Section 4. Special Meetings. Special meetings of
the Board of Directors may be called by the Chairman of the
Board, if one shall have been elected, or by two or more
directors of the Corporation or by the President.
Section 5. Notice of Meetings. Notice of regular
meetings of the Board of Directors need not be given except as
otherwise required by law or these Restated By-Laws. Notice of
each special meeting of the Board of Directors for which notice
shall be required, shall be given by the Secretary as hereinafter
provided in this Section 5, in which notice shall be stated the
time and place of the meeting. Except as otherwise required by
these By-Laws, such notice need not state the purposes of such
meeting. Notice of any special meeting, and of any regular or
annual meeting for which notice is required, shall be given to
each director at least (a) four hours before the meeting if by
telephone or by being personally delivered or sent by telex,
telecopy, or similar means or (b) two days before the meeting if
delivered by mail to the director's residence or usual place of
business. Such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage
prepaid, or when transmitted if sent by telex, telecopy, or
similar means. Neither the business to be transacted at, nor the
purpose of, any special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting. Any
director may waive notice of any meeting by a writing signed by
the director entitled to the notice and filed with the minutes or
corporate records. The attendance at or participation of the
director at a meeting shall constitute waiver of notice of such
meeting, unless the director at the beginning of the meeting or
promptly upon such director's arrival objects to holding the
meeting or transacting business at the meeting.
Section 6. Organization. At each meeting of the
Board of Directors, the Chairman of the Board, if one shall have
been elected, or, in the absence of the Chairman of the Board or
if one shall not have been elected, the President (or, in the
President's absence, another director chosen by a majority of the
directors present) shall act as chairman of the meeting and
preside thereat. The Secretary or, in such person's absence, any
person appointed by the chairman shall act as secretary of the
meeting and keep the minutes thereof.
Section 7. Quorum and Manner of Acting. A majority
of the entire Board of Directors shall constitute a quorum for
the transaction of business at any meeting of the Board of
Directors, and, except as otherwise expressly required by statute
or the Restated Certificate of Incorporation or these Restated By-
Laws, the affirmative vote of a majority of the directors present
at any meeting at which a quorum is present shall be the act of
the Board of Directors. In the absence of a quorum at any
meeting of the Board of Directors, a majority of the directors
present thereat may adjourn such meeting to another time and
place. Notice of the time and place of any such adjourned
meeting shall be given to all of the directors unless such time
and place were announced at the meeting at which the adjournment
was taken, in which case such notice need only be given to the
directors who were not present thereat. At any adjourned meeting
at which a quorum is present, any business may be transacted
which might have been transacted at the meeting as originally
called. The directors shall act only as a Board and the
individual directors shall have no power as such.
Section 8. Action by Consent. Unless restricted by
the Restated Certificate of Incorporation, any action required or
permitted to be taken by the Board of Directors or any committee
thereof may be taken without a meeting if all members of the
Board of Directors or such committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with
the minutes of the proceedings of the Board of Directors or such
committee, as the case may be.
Section 9. Telephonic Meeting. Unless restricted
by the Restated Certificate of Incorporation, any one or more
members of the Board of Directors or any committee thereof may
participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other. Participation
by such means shall constitute presence in person at a meeting.
Section 10. Committees. The Board of Directors may,
by resolution passed by a majority of the entire Board of
Directors, designate one or more committees, including an
executive committee, each committee to consist of one or more of
the directors of the Corporation. The Board of Directors may
designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence of disqualification
of any member of a committee, the member or members present at
any meeting and not disqualified from voting, whether or not such
members constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
Each such committee, to the extent provided in the
resolution creating it, shall have and may exercise all the
powers and authority of the Board of Directors in the management
of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which
require it; provided, however, that no such committee shall have
the power or authority in reference to the following matters:
(a) approving or adopting, or recommending to the stockholders,
any action or matter expressly required by the General
Corporation Law of Delaware to be submitted to stockholders for
approval or (b) adopting, amending or repealing any by-law of the
Corporation. Each such committee shall serve at the pleasure of
the Board of Directors and have such name as may be determined
from time to time by resolution adopted by the Board of
Directors. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Directors.
Section 11. Fees and Compensation. Directors and
members of committees may receive such compensation, if any, for
their services, and such reimbursement for expenses, as may be
fixed or determined by the Board of Directors. No such payment
shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor.
Section 12. Resignations. Any director of the
Corporation may resign at any time by giving written notice of
such director's resignation to the Corporation. Any such
resignation shall take effect at the time specified therein or,
if the time when it shall become effective shall not be specified
therein, immediately upon its receipt. Unless otherwise
specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Section 13. Interested Directors. No contract or
transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in
which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer
is present at or participates in the meeting of the Board of
Directors or committee thereof which authorizes the contract or
transaction, or solely because such person's or persons' votes
are counted for such purposes if (a) the material facts as to
such person's or persons' relationship or interest and as to the
contract or transaction are disclosed or are known to the
directors or committee who then in good faith authorizes the
contract or transaction by the affirmative vote of a majority of
the disinterested directors, even though the disinterested
directors be less than a quorum, or (b) the material facts as to
such person's or persons' relationship or interest and as to the
contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders or (c) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee thereof or the
stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or
transaction.
ARTICLE IV
OFFICERS
--------
Section 1. General. The officers of the
Corporation shall be chosen by the Board of Directors and shall
include a President, one or more Vice Presidents (including
Senior, Executive or other classifications of Vice Presidents)
and a Secretary. The Board of Directors, in its discretion, may
also choose as an officer of the Corporation a Chairman of the
Board and a Vice Chairman of the Board and may choose other
officers (including a Treasurer, one or more Assistant
Secretaries and one or more Assistant Treasurers) as may be
necessary or desirable. Such officers as the Board of Directors
may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors.
The Board of Directors may delegate to any officer of the
Corporation the power to choose such other officers and to
proscribe their respective duties and powers. Any number of
offices may be held by the same person, unless otherwise
prohibited by law, the Restated Certificate of Incorporation or
these Restated By-Laws. The officers of the Corporation need not
be stockholders of the Corporation nor, except in the case of the
Chairman of the Board and Vice Chairman of the Board of
Directors, need such officers be directors of the Corporation.
Section 2. Term. All officers of the Corporation
shall hold office until their successors are chosen and
qualified, or until their earlier resignation or removal. Any
vacancy occurring in any office of the Corporation shall be
filled by the Board of Directors.
Section 3. Resignations. Any officer of the
Corporation may resign at any time by giving written notice of
such officer's resignation to the Corporation. Any such
resignation shall take effect at the time specified therein or,
if the time when it shall become effective shall not be specified
therein, immediately upon receipt. Unless otherwise specified
therein, the acceptance of any such resignation shall not be
necessary to make it effective.
Section 4. Removal. Any officer may be removed at
any time by the Board of Directors with or without cause.
Section 5. Compensation. The compensation of the
officers of the Corporation for their services as such officers
shall be fixed from time to time by the Board of Directors. An
officer of the Corporation shall not be prevented from receiving
compensation by reason of the fact that such officer is also a
director of the Corporation.
Section 6. Chairman of the Board. The Chairman of
the Board, if one shall have been elected, shall be a member of
the Board, an officer of the Corporation and, if present, shall
preside at each meeting of the Board of Directors or the
stockholders. The Chairman of the Board shall advise and counsel
with the President, and in the President's absence with other
executives of the Corporation, and shall perform such other
duties as may from time to time be assigned to the Chairman of
the Board by the Board of Directors.
ARTICLE V
STOCK CERTIFICATES AND THEIR TRANSFER
-------------------------------------
Section 1. Stock Certificates. Every holder of
stock in the Corporation shall be entitled to have a certificate,
signed by, or in the name of the Corporation by, the Chairman of
the Board or a Vice Chairman of the Board or the President or a
Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by such holder in the
Corporation. If the Corporation shall be authorized to issue
more than one class of stock or more than one series of any
class, the designations, preferences and relative, participating,
optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restriction of
such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the
Corporation shall issue to represent such class or series of
stock, provided that, except as otherwise provided in Section 202
of the General Corporation Law of Delaware, in lieu of the
foregoing requirements, there may be set forth on the face or
back of the certificate which the Corporation shall issue to
represent such class or series of stock, a statement that the
Corporation will furnish without charge to each stockholder who
so requests the designations, preferences and relative,
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.
Section 2. Facsimile Signatures. Any or all of the
signatures on a certificate may be a facsimile, engraved or
printed. In case any officer, transfer agent or registrar who
has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if such person was
such officer, transfer agent or registrar at the date of issue.
Section 3. Lost Certificates. The Board of
Directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore
issued by the Corporation alleged to have been lost, stolen, or
destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and
as a condition precedent to the issuance thereof, require the
owner of such lost, stolen, or destroyed certificate or
certificates, or the owner's legal representative, to give the
Corporation a bond in such sum as it may direct sufficient to
indemnify it against any claim that may be made against the
Corporation on account of the alleged loss, theft or destruction
of any such certificate or the issuance of such new certificate.
Section 4. Transfers of Stock. Upon surrender to
the Corporation or the transfer agent of the Corporation of a
certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it
shall be the duty of the Corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate and
record the transaction upon its records; provided, however, that
the Corporation shall be entitled to recognize and enforce any
lawful restriction on transfer. Whenever any transfer of stock
shall be made for collateral security, and not absolutely, it
shall be so expressed in the entry of transfer if, when the
certificates are presented to the Corporation for transfer, both
the transferor and the transferee request the Corporation to do
so.
Section 5. Transfer Agents and Registrars. The
Board of Directors may appoint, or authorize any officer or
officers to appoint, one or more transfer agents and one or more
registrars.
Section 6. Regulations. The Board of Directors may
make such additional rules and regulations, not inconsistent with
these Restated By-Laws, as it may deem expedient concerning the
issue, transfer and registration of certificates for shares of
stock of the Corporation.
Section 7. Fixing the Record Date. In order that
the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend
or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty nor less than ten days before the
date of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record date for the adjourned meeting.
Section 8. Registered Stockholders. The
Corporation shall be entitled to recognize the exclusive right of
a person registered on its records as the owner of shares of
stock to receive dividends and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares of stock on the part of any
other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
ARTICLE VI
INDEMNIFICATION OF OFFICERS AND DIRECTORS
-----------------------------------------
Section 1. General. Each person who was or is made a
party or is threatened to be made a party to or is involved
(including, without limitation, as a witness) in any threatened,
pending or completed action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative
hearing or any other proceeding, whether civil, criminal,
administrative or investigative ("Proceeding") brought by reason
of the fact that such person (the "Indemnitee") is or was a
director or officer of the Corporation or is or was serving at
the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to an employee
benefit plan, whether the basis of such Proceeding is alleged
action in an official capacity as a director or officer or in any
other capacity while serving as such a director or officer, shall
be indemnified and held harmless by the Corporation to the full
extent authorized by the General Corporation Law of Delaware, as
the same exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such
amendment), or by other applicable law as then in effect, against
all expenses, liabilities, losses and claims (including
attorneys' fees, judgments, fines, excise taxes under the
Employee Retirement Income Security Act of 1974, as amended from
time to time, penalties and amounts to be paid in settlement)
actually incurred or suffered by such Indemnitee in connection
with such Proceeding (collectively, "Losses").
Section 2. Derivative Actions. The Corporation
shall indemnify any person who was or is a party or is threatened
to be made a party to or is involved (including, without
limitation, as a witness) in any Proceeding brought by or in the
right of the Corporation to procure a judgment in its favor by
reason of the fact that such person (also an "Indemnitee") is or
was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director or
officer of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with
respect to an employee benefit plan, against Losses actually
incurred or suffered by the Indemnitee in connection with the
defense or settlement of such action or suit if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the
Corporation, provided that no indemnification shall be made in
respect of any claim, issue or matter as to which Delaware law
expressly prohibits such indemnification by reason of an
adjudication of liability of the Indemnitee unless and only to
the extent that the Court of Chancery of the State of Delaware or
the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, the
Indemnitee is fairly and reasonably entitled to indemnity for
such expenses which the Court of Chancery or such other court
shall deem proper.
Section 3. Indemnification in Certain Cases.
Notwithstanding any other provision of this Article VI, to the
extent that an Indemnitee has been wholly successful on the
merits or otherwise in any Proceeding referred to in Sections 1
or 2 of this Article VI on any claim, issue or matter therein,
the Indemnitee shall be indemnified against Losses actually
incurred or suffered by the Indemnitee in connection therewith.
If the Indemnitee is not wholly successful in such Proceeding but
is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the
Corporation shall indemnify the Indemnitee, against Losses
actually incurred or suffered by the Indemnitee in connection
with each successfully resolved claim, issue or matter. In any
review or Proceeding to determine such extent of indemnification,
the Corporation shall bear the burden of proving any lack of
success and which amounts sought in indemnity are allocable to
claims, issues or matters which were not successfully resolved.
For purposes of this Section 3 and without limitation, the
termination of any such claim, issue or matter by dismissal with
or without prejudice shall be deemed to be a successful
resolution as to such claim, issue or matter.
Section 4. Procedure. (a) Any indemnification
under Sections 1 and 2 of this Article VI (unless ordered by a
court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the
Indemnitee is proper (except that the right of the Indemnitee to
receive payments pursuant to Section 5 of this Article VI shall
not be subject to this Section 4) in the circumstances because
the Indemnitee has met the applicable standard of conduct. Such
determination shall be made promptly, but in no event later than
60 days after receipt by the Corporation of the Indemnitee's
written request for indemnification. The Secretary of the
Corporation shall, promptly upon receipt of the Indemnitee's
request for indemnification, advise the Board of Directors that
the Indemnitee has made such request for indemnification.
(b) The entitlement of the Indemnitee to
indemnification shall be determined in the specific case (1) by
the Board of Directors by a majority vote of the directors who
are not parties to such Proceeding, even though less than a
quorum (the "Disinterested Directors"), or (2) if there are no
Disinterested Directors, or if such Disinterested Directors so
direct, by independent legal counsel, or (3) by the stockholders.
(c) In the event the determination of entitlement is
to be made by independent legal counsel, such independent legal
counsel shall be selected by the Board of Directors and approved
by the Indemnitee. Upon failure of the Board of Directors to so
select such independent legal counsel or upon failure of the
Indemnitee to so approve, such independent legal counsel shall be
selected by the American Arbitration Association in New York, New
York or such other person as such Association shall designate to
make such selection.
(d) If the Board of Directors or independent legal
counsel shall have determined that the Indemnitee is not entitled
to indemnification to the full extent of the Indemnitee's
request, the Indemnitee shall have the right to seek entitlement
to indemnification in accordance with the procedures set forth in
Section 6 of this Article VI.
(e) If the person or persons empowered pursuant to
Section 4(b) of this Article VI to make a determination with
respect to entitlement to indemnification shall have failed to
make the requested determination within 60 days after receipt by
the Corporation of such request, the requisite determination of
entitlement to indemnification shall be deemed to have been made
and the Indemnitee shall be absolutely entitled to such
indemnification, absent (i) misrepresentation by the Indemnitee
of a material fact in the request for indemnification or (ii) a
final judicial determination that all or any part of such
indemnification is expressly prohibited by law.
(f) The termination of any proceeding by judgment,
order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, adversely
affect the rights of the Indemnitee to indemnification hereunder
except as may be specifically provided herein, or create a
presumption that the Indemnitee did not act in good faith and in
a manner which the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation or create a
presumption that (with respect to any criminal action or
proceeding) the Indemnitee had reasonable cause to believe that
the Indemnitee's conduct was unlawful.
(g) For purposes of any determination of good faith
hereunder, the Indemnitee shall be deemed to have acted in good
faith if the Indemnitee's action is based on the records or books
of account of the Corporation or an affiliate, including
financial statements, or on information supplied to the
Indemnitee by the officers of the Corporation or an affiliate in
the course of their duties, or on the advice of legal counsel for
the Corporation or an affiliate or on information or records
given or reports made to the Corporation or an affiliate by an
independent certified public accountant or by an appraiser or
other expert selected with reasonable care to the Corporation or
an affiliate. The Corporation shall have the burden of
establishing the absence of good faith. The provisions of this
Section 4(g) of this Article VI shall not be deemed to be
exclusive or to limit in any way the other circumstances in which
the Indemnitee may be deemed to have met the applicable standard
of conduct set forth in these Restated By-Laws.
(h) The knowledge and/or actions, or failure to act,
of any other director, officer, agent or employee of the
Corporation or an affiliate shall not be imputed to the
Indemnitee for purposes of determining the right to
indemnification under these Restated By-Laws.
Section 5. Advances for Expenses and Costs. All
expenses (including attorneys fees) incurred by or on behalf of
the Indemnitee (or reasonably expected by the Indemnitee to be
incurred by the Indemnitee within three months) in connection
with any Proceeding shall be paid by the Corporation in advance
of the final disposition of such Proceeding within twenty days
after the receipt by the Corporation of a statement or statements
from the Indemnitee requesting from time to time such advance or
advances whether or not a determination to indemnify has been
made under Section 4 of this Article VI. The Indemnitee's
entitlement to such advancement of expenses shall include those
incurred in connection with any Proceeding by the Indemnitee
seeking an adjudication or award in arbitration pursuant to these
By-Laws. The financial ability of an Indemnitee to repay an
advance shall not be a prerequisite to the making of such
advance. Such statement or statements shall reasonably evidence
such expenses incurred (or reasonably expected to be incurred) by
the Indemnitee in connection therewith and shall include or be
accompanied by a written undertaking by or on behalf of the
Indemnitee to repay such amount if it shall ultimately be
determined that the Indemnitee is not entitled to be indemnified
therefor pursuant to the terms of this Article VI.
Section 6. Remedies in Cases of Determination not
to Indemnify or to Advance Expenses. (a) In the event that (i)
a determination is made that the Indemnitee is not entitled to
indemnification hereunder, (ii) advances are not made pursuant to
Section 5 of this Article VI or (iii) payment has not been timely
made following a determination of entitlement to indemnification
pursuant to Section 4 of this Article VI, the Indemnitee shall be
entitled to seek a final adjudication either through an
arbitration proceeding or in an appropriate court of the State of
Delaware or any other court of competent jurisdiction of the
Indemnitee's entitlement to such indemnification or advance.
(b) In the event a determination has been made in
accordance with the procedures set forth in Section 4 of this
Article VI, in whole or in part, that the Indemnitee is not
entitled to indemnification, any judicial proceeding or
arbitration referred to in paragraph (a) of this Section 6 shall
be de novo and the Indemnitee shall not be prejudiced by reason
of any such prior determination that the Indemnitee is not
entitled to indemnification, and the Corporation shall bear the
burdens of proof specified in Sections 3 and 4 of this Article VI
in such proceeding.
(c) If a determination is made or deemed to have been
made pursuant to the terms of Sections 4 or 6 of this Article VI
that the Indemnitee is entitled to indemnification, the
Corporation shall be bound by such determination in any judicial
proceeding or arbitration in the absence of (i) a
misrepresentation of a material fact by the Indemnitee or (ii) a
final judicial determination that all or any part of such
indemnification is expressly prohibited by law.
(d) To the extent deemed appropriate by the court,
interest shall be paid by the Corporation to the Indemnitee at a
reasonable interest rate for amounts which the Corporation
indemnifies or is obliged to indemnify the Indemnitee for the
period commencing with the date on which the Indemnitee requested
indemnification (or reimbursement or advancement of expenses) and
ending with the date on which such payment is made to the
Indemnitee by the Corporation.
Section 7. Rights Non-Exclusive. The
indemnification and advancement of expenses provided by, or
granted pursuant to, the other Sections of this Article VI shall
not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be
entitled under any law, by-law, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in
such person's official capacity and as to action in another
capacity while holding such office.
Section 8. Insurance. The Corporation shall have
power to purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit
plan, against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of
such person's status as such, whether or not the Corporation
would have the power to indemnify such person against such
liability under the provisions of this Article VI.
Section 9. Definition of Corporation. For purposes
of this Article VI, references to "the Corporation" shall
include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including
service with respect to an employee benefit plan, shall stand in
the same position under this Article VI with respect to the
resulting or surviving corporation as such person would have with
respect to such constituent corporation if its separate existence
had continued.
Section 10. Other Definitions. For purposes of this
Article VI, references to "fines" shall include any excise taxes
assessed on a person with respect to any employee benefit plan;
and references to "serving at the request of the Corporation"
shall include any service as a director, officer, employee or
agent of the corporation which imposes duties on, or involves
services by, such director, officer, employee, or agent with
respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a
manner such person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the
best interests of the Corporation" as referred to in this Article
VI.
Section 11. Survival of Rights. The indemnification
and advancement of expenses provided by, or granted pursuant to
this Article VI shall, unless otherwise provided when authorized
or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person. No amendment, alteration, rescission or replacement of
these By-Laws or any provision hereof shall be effective as to an
Indemnitee with respect to any action taken or omitted by such
Indemnitee in Indemnitee's position with the Corporation or any
other entity which the Indemnitee is or was serving at the
request of the Corporation prior to such amendment, alteration,
rescission or replacement.
Section 12. Indemnification of Employees and Agents of
the Corporation. The Corporation may, by action of the Board of
Directors from time to time, grant rights to indemnification and
advancement of expenses to employees and agents of the
Corporation with the same scope and effect as the provisions of
this Article VI with respect to the indemnification of directors
and officers of the Corporation.
Section 13. Savings Clause. If this Article VI or any
portion hereof shall be invalidated on any ground by any court of
competent jurisdiction, then the Corporation shall nevertheless
indemnify each person entitled to indemnification under the first
paragraph of this Article VI as to all losses actually and
reasonably incurred or suffered by such person and for which
indemnification is available to such person pursuant to this
Article VI to the full extent permitted by any applicable portion
of this Article VI that shall not have been invalidated and to
the full extent permitted by applicable law.
ARTICLE VII
GENERAL PROVISIONS
------------------
Section 1. Dividends. Subject to the provisions of
statute and the Restated Certificate of Incorporation, dividends
upon the shares of capital stock of the Corporation may be
declared by the Board of Directors at any regular or special
meeting. Dividends may be paid in cash, in property or in shares
of stock of the Corporation, unless otherwise provided by statute
or the Restated Certificate of Incorporation.
Section 2. Reserves. Before payment of any
dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board
of Directors may, from time to time, in its absolute discretion,
think proper as a reserve or reserves to meet contingencies, or
for equalizing dividends, or for repairing or maintaining any
property of the Corporation or for such other purpose as the
Board of Directors may think conducive to the interests of the
Corporation. The Board of Directors may modify or abolish any
such reserve in the manner in which it was created.
Section 3. Seal. The seal of the Corporation shall
be in such form as shall be approved by the Board of Directors.
Section 4. Fiscal Year. The fiscal year of the
Corporation shall be fixed, and once fixed, may thereafter be
changed, by resolution of the Board of Directors.
Section 5. Checks, Notes, Drafts, Etc. All checks,
notes, drafts or other orders for the payment of money of the
Corporation shall be signed, endorsed or accepted in the name of
the Corporation by such officer, officers, person or persons as
from time to time may be designated by the Board of Directors or
by an officer or officers authorized by the Board of Directors to
make such designation.
Section 6. Execution of Contracts, Deeds, Etc. The
Board of Directors may authorize any officer or officers, agent
or agents, in the name and on behalf of the Corporation to enter
into or execute and deliver any and all deeds, bonds, mortgages,
contracts and other obligations or instruments, and such
authority may be general or confined to specific instances.
Section 7. Voting of Stock in Other Corporations.
Unless otherwise provided by resolution of the Board of
Directors, the Chairman of the Board or the President, from time
to time, may (or may appoint one or more attorneys or agents to)
cast the votes which the Corporation may be entitled to cast as a
shareholder or otherwise in any other corporation, any of whose
shares or securities may be held by the Corporation, at meetings
of the holders of the shares or other securities of such other
corporation. In the event one or more attorneys or agents are
appointed, the Chairman of the Board or the President may
instruct the person or persons so appointed as to the manner of
casting such votes or giving such consent. The Chairman of the
Board or the President may, or may instruct the attorneys or
agents appointed to, execute or cause to be executed in the name
and on behalf of the Corporation and under its seal or otherwise,
such written proxies, consents, waivers or other instruments as
may be necessary or proper in the circumstances.
ARTICLE VIII
AMENDMENTS
----------
These Restated By-Laws may be repealed, altered,
amended or rescinded in whole or in part, or new By-Laws may be
adopted by either the affirmative vote of the holders of at least
a majority of the voting power of all of the issued and
outstanding shares of capital stock of the Corporation entitled
to vote thereon or by the Board of Directors.
EXECUTION COPY
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- --------------------------------------------------------------------------------
CREDIT AGREEMENT
among
GULFSTREAM DELAWARE CORPORATION,
CERTAIN LENDERS,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent,
Dated as of October 16, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . 19
SECTION 2. TERM LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1 Term Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.2 Repayment of Term Loans . . . . . . . . . . . . . . . . . . . . . 20
2.3 Proceeds of Term Loans. . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.1 Revolving Credit Commitments. . . . . . . . . . . . . . . . . . . 21
3.2 Proceeds of Revolving Credit Loans. . . . . . . . . . . . . . . . 22
3.3 Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . 22
3.4 Participating Interests . . . . . . . . . . . . . . . . . . . . . 22
3.5 Procedure for Opening Letters of Credit . . . . . . . . . . . . . 22
3.6 Payments in Respect of Letters of Credit. . . . . . . . . . . . . 23
3.7 Swing Line Commitment . . . . . . . . . . . . . . . . . . . . . . 24
3.8 Participations. . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4. GENERAL PROVISIONS APPLICABLE TO
LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . 25
4.1 Procedure for Borrowing . . . . . . . . . . . . . . . . . . . . . 25
4.2 Repayment of Loans; Evidence of Debt. . . . . . . . . . . . . . . 26
4.3 Conversion Options. . . . . . . . . . . . . . . . . . . . . . . . 27
4.4 Changes of Commitment Amounts . . . . . . . . . . . . . . . . . . 28
4.5 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . . 28
4.6 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . 29
4.7 Interest Rates and Payment Dates. . . . . . . . . . . . . . . . . 30
4.8 Computation of Interest and Fees. . . . . . . . . . . . . . . . . 31
4.9 Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.10 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.11 Letter of Credit Fees. . . . . . . . . . . . . . . . . . . . . . 31
4.12 Letter of Credit Reserves. . . . . . . . . . . . . . . . . . . . 32
4.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 33
4.14 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . 33
4.15 Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.16 Participations . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.17 Inability to Determine Interest Rate . . . . . . . . . . . . . . 34
4.18 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . . . 35
4.19 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.20 Requirements of Law. . . . . . . . . . . . . . . . . . . . . . . 38
4.21 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 40
5.1 Corporate Existence; Compliance with Law. . . . . . . . . . . . . 40
5.2 Corporate Power; Authorization. . . . . . . . . . . . . . . . . . 40
5.3 Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . 40
5.4 No Legal Bar. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.5 No Material Litigation. . . . . . . . . . . . . . . . . . . . . . 41
5.6 Financial Condition. . . . . . . . . . . . . . . . . . . . . 41
5.7 Investment Company Act. . . . . . . . . . . . . . . . . . . . . . 42
5.8 Federal Regulation. . . . . . . . . . . . . . . . . . . . . . . . 42
5.9 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.10 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . 42
5.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.12 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.13 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . 43
5.14 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . 44
6.1 Conditions to Effectiveness of this Agreement, Initial Loans and
Letters of Credit. . . . . . . . . . . . . . . . . . . . . . 44
6.2 Conditions to All Loans and Letters of Credit . . . . . . . . . . 47
SECTION 7. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . 48
7.1 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 48
7.2 Certificates; Other Information . . . . . . . . . . . . . . . . . 50
7.3 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . 51
7.4 Conduct of Business and Maintenance of Existence. . . . . . . . . 51
7.5 Maintenance of Property; Insurance. . . . . . . . . . . . . . . . 51
7.6 Inspection of Property; Books and Records; Discussions. . . . . . 52
7.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.8 Additional Subsidiary Guarantors; Stock Pledge. . . . . . . . . . 53
SECTION 8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 54
8.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.2 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . 55
8.3 Limitation on Contingent Obligations. . . . . . . . . . . . . . . 57
8.4 Prohibition of Fundamental Changes. . . . . . . . . . . . . . . . 57
8.5 Prohibition on Sale of Assets . . . . . . . . . . . . . . . . . . 58
8.6 Limitation on Investments, Loans and Advances . . . . . . . . . . 58
8.7 Limitation on Capital Expenditures. . . . . . . . . . . . . . . . 60
8.8 Maintenance of Interest Coverage. . . . . . . . . . . . . . . . . 60
8.9 Maintenance of Current Ratio. . . . . . . . . . . . . . . . . . . 60
8.10 Maintenance of Leverage Ratio. . . . . . . . . . . . . . . . . . 61
8.11 Limitation on Restricted Payments. . . . . . . . . . . . . . . . 61
8.12 Transactions with Affiliates . . . . . . . . . . . . . . . . . . 62
8.13 Foreign Exchange Contracts . . . . . . . . . . . . . . . . . . . 62
8.14 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 63
10.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . 67
10.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . 67
10.4 Reliance by the Administrative Agent . . . . . . . . . . . . . . 67
10.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . 68
10.6 Non-Reliance on Administrative Agent and Other Lenders . . . . . 68
10.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 69
10.8 Administrative Agent in its Individual Capacities. . . . . . . . 69
10.9 Successor Administrative Agent . . . . . . . . . . . . . . . . . 69
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 70
11.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . 70
11.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . 72
11.4 Survival of Representations and Warranties . . . . . . . . . . . 72
11.5 Payment of Expenses and Taxes. . . . . . . . . . . . . . . . . . 72
11.6 Successors and Assigns; Participations; Purchasing Lenders . . . 73
11.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . 76
11.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.9 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.10 GOVERNING LAW; NO THIRD PARTY RIGHTS. . . . . . . . . . . . . . 78
11.11 SUBMISSION TO JURISDICTION; WAIVERS . . . . . . . . . . . . . . 78
11.12 Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . . 79
SCHEDULES:
Schedule 1.1A Lists of Addresses for Notices; Lending Offices;
Commitment Amounts
Schedule 1.1B Terms of Used Aircraft Inventory Financing
Schedule 3.3 Outstanding Letters of Credit
Schedule 5.14 ERISA
Schedule 5.5 Material Litigation
Schedule 5.12A Domestic Subsidiaries
Schedule 5.12B Foreign Subsidiaries
Schedule 5.6(d) Dividends
Schedule 8.1 Existing Indebtedness
Schedule 8.2 Existing Liens
Schedule 8.3 Existing Contingent Obligations
Schedule 8.13 Existing Foreign Exchange Contracts
EXHIBITS:
Exhibit A Revolving Credit Note
Exhibit B Swing Line Note
Exhibit C Term Note
Exhibit D Company Pledge Agreement
Exhibit E Holdings Guarantee
Exhibit F Holdings Pledge Agreement
Exhibit G Subsidiary Guarantee
Exhibit H Subsidiary Pledge Agreement
Exhibit I Form of Exemption Certificate
Exhibit J-1 Opinion of Fried, Frank, Harris, Shriver
& Jacobson
Exhibit J-2 Opinion of Donald Mayer, Esq.
Exhibit K-1 Holdings Closing Certificate
Exhibit K-2 Company Closing Certificate
Exhibit K-3 Subsidiary Guarantor Closing Certificate
Exhibit L L/C Participation Certificate
Exhibit M Swing Line Loan Participation Certificate
Exhibit N Assignment and Acceptance
CREDIT AGREEMENT, dated as of October 16, 1996, among GULFSTREAM
DELAWARE CORPORATION, a Delaware corporation (the "COMPANY"), the several
lenders from time to time parties hereto (the "LENDERS") and THE CHASE MANHATTAN
BANK, a New York banking corporation, as administrative agent for the Lenders
(in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, Holdings and the Company have informed the Administrative
Agent and the Lenders that Holdings intends to issue and sell shares of its
common stock in an initial public offering registered under the Securities Act
of 1933, as amended (the "IPO"); and
WHEREAS, in connection with the IPO, Holdings and the Company have
requested the Lenders to enter into this Agreement to make loans and other
extensions of credit to be used, together with the proceeds of the IPO, to
refinance certain of the outstanding indebtedness of Company, to pay fees and
expenses related to the IPO and the other transactions contemplated hereby, to
retire certain capital stock of Holdings and to provide financing for the
working capital needs and general corporate purposes of the Company and its
Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms defined in
the preamble hereto shall have the meanings set forth therein, and the following
terms have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "PRIME RATE" shall mean the rate of interest per
annum publicly announced from time to time by Chase as its prime rate in effect
at its principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by Chase in connection with extensions of
credit to debtors); and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day,
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 on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which is a Business
Day, the average of the quotations for the day of such transactions received by
the Administrative Agent from three federal funds brokers of recognized standing
selected by it. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms hereof, the ABR shall be
determined without regard to clause (b), of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or
the Federal Funds Effective Rate, respectively.
"ABR LOANS": Loans whose interest rate is based on the ABR.
"ACCOUNTANTS": as defined in subsection 7.1(a)
"ADJUSTMENT DATE": the first Business Day following receipt by the
Administrative Agent of both (i) the financial statements required to be
delivered pursuant to subsection 7.1(a) or 7.1(b), as the case may be, for the
most recently completed fiscal period and (ii) the certificate required to be
delivered pursuant to subsection 7.2(b) with respect to such fiscal period.
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": of any Person (a) any Person (other than a Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such Person, or (b) any Person who is a director or officer
(i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person
described in clause (a) above. For purposes of this definition, control of a
Person shall mean the power, direct or indirect, either to (i) vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person, or (ii) direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
modified from time to time.
"AGGREGATE REVOLVING CREDIT EXTENSIONS OF CREDIT": at any particular
time, the sum of (a) the aggregate then outstanding principal amount of the
Revolving Credit Loans, (b) the aggregate amount then available to be drawn
under all outstanding Letters of Credit and (c) the aggregate then outstanding
amount of Revolving L/C Obligations.
"APPLICABLE MARGIN": (a) with respect to ABR Loans, .75%, and (b)
with respect to Eurodollar Loans, 1.75%, PROVIDED that, from and after the first
Adjustment Date to occur after the Closing Date, the Applicable Margin for all
Loans will be adjusted, if required on each Adjustment Date, to the Applicable
Margin set forth on ANNEX A hereto opposite the Leverage Ratio Level of the
Company in effect on such Adjustment Date, and PROVIDED further, that in the
event that the financial statements required to be delivered pursuant to
subSection or , as applicable, and the related certificate required pursuant to
subsection , are not delivered when due, then, during the period from the date
upon which such financial statements were required to be delivered until one
Business Day following the date upon which they actually are delivered, Leverage
Ratio Level I shall be deemed to be in effect for the purposes of determining
Applicable Margins during such period.
"ASSET SALE": any sale, sale-leaseback, assignment, conveyance,
transfer or other disposition by the Company or any Subsidiary thereof of any of
its property or assets, including the stock of any Subsidiary of the Company and
any primary issuance of capital stock of any Subsidiary of the Company other
than to the Company or any Subsidiary of the Company (except sales,
sale-leasebacks, assignments, conveyances, transfers and other dispositions
permitted by clauses (a), (b), (c), and (d) of subsection ).
"ASSIGNEE": as defined in subsection .
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance
substantially in the form of Exhibit N hereto.
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any Lender, at a
particular time, an amount equal to the excess, if any, of (a) the amount of
such Lender's Revolving Credit Commitment at such time less (b) the sum of (i)
the aggregate unpaid principal amount at such time of all Revolving Credit Loans
made by such Lender pursuant to subsection , (ii) such Lender's L/C
Participating Interest in the aggregate amount available to be drawn at such
time under all outstanding Letters of Credit, (iii) such Lender's Revolving
Credit Commitment Percentage of the aggregate outstanding amount of Revolving
L/C Obligations and (iv) such Lender's Revolving Credit Commitment Percentage of
the aggregate unpaid principal amount at such time of all Swing Line Loans,
PROVIDED; HOWEVER, that the amount referred to in this clause (iv) shall be zero
for the purposes of calculating the Available Revolving Credit Commitment
pursuant to subsection 4.9; collectively, as to all the Lenders, the "AVAILABLE
REVOLVING CREDIT COMMITMENTS".
"BENEFITTED LENDER": as defined in subSection hereof.
"BOARD": the Board of Governors of the Federal Reserve System of the
United States or any successor.
"BORROWING DATE": any Business Day, or, in the case of Eurodollar
Loans, any Working Day, specified in a notice pursuant to (a) subsection 3.7 or
as a date on which the Company requests Chase to make Swing Line Loans or the
Lenders to make Revolving Credit Loans, respectively, hereunder or (b)
subsection 3.5 as a date on which the Company requests the Issuing Lender to
issue a Letter of Credit hereunder.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
"CAPITAL EXPENDITURES": for any period, all amounts (other than those
arising from the acquisition or lease of businesses and assets which are
permitted by subsection 8.6(g)) which are set forth on Holdings' and its
Subsidiaries' consolidated statement of cash flows for such period as "Additions
to property and equipment", in accordance with GAAP, consistent with the
Holdings financial statements for the year ended December 31, 1995 (it being
understood that tooling expenditures shall, in any event, constitute capital
expenditures).
"CASH EQUIVALENTS": (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than six months from the
date of acquisition, (ii) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any Lender or with any domestic commercial bank
having capital and surplus in excess of $250,000,000, (iii) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (i) and (ii) entered into with any financial
institution meeting the qualifications specified in clause (ii) above, and (iv)
commercial paper issued by any Lender, the parent corporation of any Lender or
any Subsidiary of such Lender's parent corporation, and commercial paper rated
A-1 or the equivalent thereof by Standard & Poor's Rating Group or P-1 or the
equivalent thereof by Moody's Investors Service, Inc. and in each case maturing
within six months after the date of acquisition thereof.
"CHANGE IN LAW": with respect to any Lender, the adoption of any law,
rule, regulation, policy, guideline or directive (whether or not having the
force of law) or any change therein or in the interpretation or application
thereof by any Governmental Authority, including, without limitation, the
issuance of any final rule, regulation or guideline by any regulatory agency
having jurisdiction over such Lender or, in the case of subsection 4.12(b) or
4.20(b), any corporation controlling such Lender.
"CHASE": as defined in the preamble hereto.
"CLOSING DATE": the date on which each of the conditions precedent to
the effectiveness of this Agreement contained in Section 6.1 has been either
satisfied or waived in accordance with the terms and provisions of Section 6.1.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COMMERCIAL L/C": a commercial documentary Letter of Credit under
which the relevant Issuing Lender agrees to make payments in Dollars for the
account of the Company, on behalf of the Company or any Subsidiary thereof, in
respect of obligations of the Company or any Subsidiary thereof in connection
with the importation or exportation of goods in the ordinary course of business.
"COMMITMENT PERCENTAGE": as to any Lender at any time, its Term Loan
Commitment Percentage or its Revolving Credit Commitment Percentage, as the
context may require.
"COMMITMENTS": the collective reference to the Revolving Credit
Commitments, the Swing Line Commitment and the Term Loan Commitments;
individually, a "COMMITMENT".
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Company within the meaning of Section
4001 of ERISA or is part of a group which includes the Company and which is
treated as a single employer under Section 414 of the Code.
"COMPANY": as defined in the preamble hereto.
"COMPANY PLEDGE AGREEMENT": the Pledge Agreement, substantially in
the form of Exhibit D hereto, made by the Company in favor of the Administrative
Agent, for the ratable benefit of the Lenders, as the same may be amended,
supplemented or otherwise modified from time to time (it being understood and
agreed that, subject to Section 7.8(c) hereof, the Company Pledge Agreement
shall not require the Company to pledge (x) any of the stock of any Foreign
Subsidiary of the Company or Holdings which is owned by a Foreign Subsidiary of
the Company or Holdings or (y) more than 65% of the stock of (i) any other
Foreign Subsidiary of the Company or Holdings or (ii) any other Subsidiary of
the Company or Holdings if more than 65% of the assets of such Subsidiary are
securities of foreign Persons (such determination to be made on the basis of
fair market value)).
"CONSOLIDATED CURRENT ASSETS": at a particular date, all amounts
which would, in conformity with GAAP (except that the unamortized amount of
production tooling shall be included as a current asset), be included under
current assets on a consolidated balance sheet of Holdings and its Subsidiaries
as at such date, plus the lesser of (i) the Available Revolving Credit
Commitment at such date and (ii) $165,000,000.
"CONSOLIDATED CURRENT LIABILITIES": at a particular date, all amounts
which would, in conformity with GAAP, be included under current liabilities on a
consolidated balance sheet of Holdings and its Subsidiaries as at such date,
excluding any portion of the Loans otherwise so included.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income ((i)
including earnings and losses from discontinued operations, (ii) excluding
extraordinary gains, and gains and losses arising from the proposed or actual
disposition of material assets, and (iii) excluding the non-cash portion of
other non-recurring losses) of Holdings and its Subsidiaries for such period,
PLUS to the extent reflected as a charge in the statement of consolidated net
income for such period, the sum of (a) interest expense (net of interest
income), amortization (including accelerated amortization) and write offs of
debt discount and debt issuance costs, including such write-offs in connection
with the prepayment of debt, and commissions, discounts and other fees and
charges associated with Letters of Credit, (b) taxes measured by income, (c)
depreciation and amortization expenses including acceleration thereof and
including the amortization of the increase in inventory resulting from the
application of APB 16 for transactions contemplated by this Agreement including
acquisitions permitted under 8.6(g), (d) non-cash compensation expenses arising
from the sale of stock, the granting of stock options, the granting of stock
appreciation rights and similar arrangements, (e) the excess of the expense in
respect of post-retirement benefits and post-employment benefits accrued under
Statement of Financial Accounting Standards No. 106 ("FASB 106") and Statement
of Financial Accounting Standards No. 112 ("FASB 112") over the cash expense in
respect of such post-retirement benefits and post-employment benefits and (f)
the amount of any non-cash charges made or required to be made in connection
with the Refinancing (including, in the case of stock appreciation
rights, any \charge thereafter on a cumulative basis) in respect of (A) the
charge to expense for compensation relating to stock options, stock
appreciation rights and stock purchases by officers, directors and key
employees of Holdings or any of its Subsidiaries and (B) the charge to
expense for deferred financing costs resulting from the prepayment of
all amounts owing and payable under the Existing Credit Agreements; PROVIDED,
that Consolidated EBITDA during any period shall be increased by research and
development expense incurred during such period in respect of the Gulfstream V
program (if the amount of such expense for such period is greater than $0), but
only to the extent of customer deposits received, net of cancellations, during
such period.
"CONSOLIDATED INTEREST EXPENSE": for any period the amount of
interest expense, both expensed and capitalized (excluding amortization and
write offs of debt discount and debt issuance costs) net of interest income, of
Holdings and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, for such period, PROVIDED that (i) Consolidated Interest Expense for
the period of four consecutive fiscal quarters ending December 31, 1996, shall
be equal to the product of (A) Consolidated Interest Expense for the fiscal
quarter ending December 31, 1996 times (B) 4, (ii) Consolidated Interest Expense
for the period of four consecutive fiscal quarters ending March 31, 1997, shall
be equal to the product of (A) Consolidated Interest Expense for the two
consecutive fiscal quarters ending March 31, 1997 times (B) 2, and (iii)
Consolidated Interest Expense for the period of four consecutive fiscal quarters
ending June 30, 1997, shall be equal to the product of (A) Consolidated Interest
Expense for the three consecutive fiscal quarters ending June 30, 1997 times (B)
a fraction, the numerator of which is 4 and the denominator of which is 3.
"CONSOLIDATED NET INCOME": for any period, the net income or net loss
of Holdings and its Subsidiaries for such period, determined in accordance with
GAAP on a consolidated basis, as reflected in the financial statements furnished
to the Administrative Agent in accordance with subSections and (b) hereof.
"CONSOLIDATED TOTAL DEBT": at any date of determination, the
principal amount of all indebtedness of Holdings and its consolidated
Subsidiaries outstanding in accordance with GAAP under this Agreement plus any
other amounts, without duplication, included in clause (a) of the definition of
Indebtedness (including any amounts drawn and unreimbursed under letters of
credit) at such date of determination, on a consolidated basis in accordance
with GAAP.
"CONTINGENT OBLIGATION": as to any Person, any obligation of such
Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent (a)
to purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d)otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term ContingentObligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount (based on the maximum reasonably anticipated net
liability in respect thereof as determined by the Company in good faith) of the
primary obligation or portion thereof in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated net liability in respect thereof (assuming such Person is required
to perform thereunder) as determined by the Company in good faith.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of the property owned by it
is bound.
"CREDIT DOCUMENTS": the collective reference to this Agreement, the
Notes, the Pledge Agreements, the Guarantees and any security agreement and
guarantee executed and delivered pursuant to the terms of subsection .
"CREDIT PARTIES": the collective reference to Holdings, the Company
and each Subsidiary which is a party, or which at any time becomes a party, to a
Credit Document.
"DEFAULT": any of the events specified in Section , whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Company other than a
Foreign Subsidiary.
"ENVIRONMENTAL LAWS": any and all Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
requirements of any Governmental Authority regulating, relating to or imposing
liability or standards of conduct concerning environmental protection matters,
including without limitation, Hazardous Materials, as now or may at any time
hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day, as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal) of reserve requirements current on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto), as now and from time to time hereafter in effect, dealing
with reserve requirements prescribed for Eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board)
maintained by a member bank of such System. As of the Closing Date, there
are no Eurocurrency Reserve Requirements in effect.
"EURODOLLAR BASE RATE": with respect to each day during any Interest
Period for any Eurodollar Loan, the rate per annum equal to the rate at which
Chase is offered Dollar deposits at or about 10:00 a.m., New York City time, two
Working Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the foreign currency and exchange operations in respect
of its Eurodollar Loans then are being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of its Eurodollar Loan to be outstanding during
such Interest Period.
"EURODOLLAR LENDING OFFICE": initially, the office of each Lender
designated as such in Schedule 1.1A; thereafter, such other office of such
Lender, if any, which shall be making or maintaining Eurodollar Loans as
designated as such from time to time in a notice from such Lender to the
Administrative Agent.
"EURODOLLAR LOANS": Loans at such time as they are made and/or being
maintained at a rate of interest based upon a Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
EURODOLLAR BASE RATE _
1.00 - Eurocurrency Reserve Requirement
"EVENT OF DEFAULT": any of the events specified in Section , PROVIDED
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"EXISTING CREDIT AGREEMENTS": the collective reference to (i) the
Credit Agreement, dated as of March 19, 1990, among the Company, the banks and
other financial institutions parties thereto and Chase, as administrative agent,
as amended, and (ii) the Credit Agreement, dated as of November 30, 1993, among
the Company, the banks and other financial institutions parties thereto and
Chase, as administrative agent, as amended.
"FINANCING SUBSIDIARY": any Affiliate or Subsidiary of the Company
which is a party to the Used Aircraft Inventory Financing.
"FL AFFILIATE": any Affiliate (other than any described in clause (b)
of the definition thereof) of any member of the FL Group.
"FL GROUP": FL & Co. and the FL Affiliates.
"FL & CO.": FLC Partnership, L.P., a New York limited partnership
("FLC"), each of the general partners thereof, any subordinated debt and equity
partnership controlled by FLC or such general partner or any combination of the
foregoing.
"FOREIGN SUBSIDIARY": any Subsidiary of the Company (or if so
specified, Holdings) (a) which is organized under the laws of any jurisdiction
outside the United States (within the meaning of Section 7701(a)(9) of the
Code), or (b) whose principal assets consist of capital stock or other equity
interests of one or more Persons which conduct the major portion of their
business outside the United States (within the meaning of Section 7701 (a)(9) of
the Code).
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTEES": the collective reference to the Holdings Guarantee and
the Subsidiary Guarantee.
"GULFSTREAM V": the type of large cabin business jet aircraft
produced by the Company and designated "Gulfstream V".
"HAZARDOUS MATERIALS": any substance (a) which is or becomes defined
as a "hazardous waste," "hazardous substance," pollutant or contaminant under
any federal, state or local statute, regulation, rule or ordinance or amendments
thereto including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and/or the
Resource Conservation and Recovery Act (42 U.S.C.Section 6901 et seq.); and (b)
without limitation, which is or contains petroleum products (including crude oil
or any fraction thereof), PCBs, asbestos, urea formaldehyde foam insulation,
radon gas or infectious or radioactive materials.
"HOLDINGS": Gulfstream Aerospace Corporation, a Delaware corporation.
"HOLDINGS DIVIDEND LIMIT": as defined in subsection 8.11(e).
"HOLDINGS GUARANTEE": the Guarantee, substantially in the form of
Exhibit E hereto, made by Holdings in favor of the Administrative Agent, for the
ratable benefit of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"HOLDINGS NOTE": the Note due October 1, 2003 and dated the date
hereof, in the original principal amount of $100,000,000, made by Holdings in
favor of the Company in connection with the Refinancing.
"HOLDINGS PLEDGE AGREEMENT": the Pledge Agreement, substantially in
the form of Exhibit F hereto, made by Holdings in favor of the Administrative
Agent, for the ratable benefit of the Lenders, as the same may be amended,
supplemented or otherwise modified from time to time (it being understood and
agreed that, subject to Section 7.8(c) hereof, the Holdings Pledge Agreement
shall not require Holdings to pledge (x) any of the stock of any Foreign
Subsidiary of the Company or Holdings which is owned by a Foreign Subsidiary of
the Company or Holdings or (y) more than 65% of the stock of (i) any other
Foreign Subsidiary of the Company or Holdings or (ii) any other Subsidiary of
the Company or Holdings if more than 65% of the assets of such Subsidiary are
securities of foreign Persons (such determination to be made on the basis of
fair market value)).
"HOLDINGS PREFERRED": the 7% Cumulative Preferred Stock issued by
Holdings and outstanding on the Closing Date.
"INDEBTEDNESS": of any Person, at any particular date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade payables or liabilities
and deferred payment for services to employees or former employees incurred in
the ordinary course of business and payable in accordance with customary
practices and other deferred compensation arrangements), (b) the face amount of
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (c) all liabilities (other than Lease
Obligations) secured by any Lien on any property owned by such Person, to the
extent attributable to such Person's interest in such property, even though such
Person has not assumed or become liable for the payment thereof, (d) lease
obligations of such Person which, in accordance with GAAP, should be capitalized
and (e) all indebtedness of such Person arising under acceptance facilities; but
excluding (y) customer deposits and interest payable thereon in the ordinary
course of business and (z) trade and other accounts and accrued expenses payable
in the ordinary course of business in accordance with customary trade terms and
in the case of both clauses (y) and (z) above, which are not overdue for a
period of more than 90 days or, if overdue for more than 90 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of such Person.
"INSOLVENCY": with respect to a Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of such term as used in Section
4245 of ERISA.
"INTEREST COVERAGE RATIO": as at the last day of any fiscal quarter
of Holdings, the ratio of (a) Consolidated EBITDA less Capital Expenditures, in
each case for the period of four fiscal quarters ending on such day to (b)
Consolidated Interest Expense for the period of four fiscal quarters ending on
such day, in each period subject to the proviso at the end of the definition of
Consolidated Interest Expense.
"INTEREST PAYMENT DATE": (a) as to ABR Loans, the last day of each
March, June, September and December, commencing on the first such day to occur
after any ABR Loans are made or any Eurodollar Loans are converted to ABR Loans,
(b) as to any Eurodollar Loan in respect of which the Company has selected an
Interest Period of one, two or three months, the last day of such Interest
Period, (c) as to any Eurodollar Loan in respect of which the Company has
selected an Interest Period of six months, the day which is three months after
the date on which such Eurodollar Loan is made or an ABR Loan is converted to
such a Eurodollar Loan, and the last day of such Interest Period, (d) as to any
Eurodollar Loan, each day on which principal of such Eurodollar Loan is payable,
(e) in the case of any Term Loan, when such Loan is paid in full, and (f) in the
case of the Revolving Credit Loans, on the Revolving Credit Termination Date.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(a) initially, the period commencing on, as the case may be, the
Borrowing Date or conversion date with respect to such Eurodollar Loan and
ending one, two, three or six months thereafter as selected by the Company
in its notice of borrowing as provided in subSection or its notice of
conversion as provided in subsection 4.3; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter as selected by the Company
by irrevocable notice to the Administrative Agent not less than three
Working Days prior to the last day of the then current Interest Period
with respect to such Eurodollar Loan;
PROVIDED that the foregoing provisions relating to Interest Periods are subject
to the following:
(A) if any Interest Period would otherwise end on a day which is
not a Working Day, that Interest Period shall be extended to the next
succeeding Working 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 Working Day;
(B) any Interest Period that would otherwise extend beyond (i)
in the case of an Interest Period for a Term Loan, the final scheduled
installment date set forth in subsection 2.2 shall end on such date or,
if such Installment Payment Date shall not be a Working Day, on the next
preceding Working Day and (ii) in the case of any Interest Period for a
Revolving Credit Loan, the Revolving Credit Termination Date shall end on
the Revolving Credit Termination Date, or if the Revolving Credit
Termination Date shall not be a Working Day, on the next preceding Working
Day;
(C) if the Company shall fail to give notice as provided above
in clause (b), it shall be deemed to have selected a conversion of a
Eurodollar Loan into an ABR Loan (which conversion shall occur
automatically and without need for compliance with the conditions for
conversion set forth in subsection 4.3);
(D) any Interest Period that begins on the last 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 Working Day of a calendar month; and
(E) the Company shall select Interest Periods so as not to
require a prepayment (to the extent practicable) or a scheduled payment
of a Eurodollar Loan during an Interest Period for such Eurodollar Loan.
"IPO": as defined in the Recitals hereto.
"ISSUING LENDER": The Chase Manhattan Bank.
"L/C APPLICATION": a letter of credit application in the relevant
Issuing Lender's then customary form for the type of letter of credit requested.
"L/C PARTICIPATING INTEREST": an undivided participating interest in
the face amount of each issued and outstanding Letter of Credit and the L/C
Application relating thereto.
"L/C PARTICIPATION CERTIFICATE": a certificate in substantially the
form of Exhibit L hereto.
"LEASE OBLIGATIONS": of the Company and its Subsidiaries, as of the
date of any determination thereof, the rental commitments of the Company and its
Subsidiaries determined on a consolidated basis, if any, under leases for real
and/or personal property (net of rental commitments from sub-leases thereof),
excluding however, obligations under leases which are classified as Indebtedness
under clause (d) of the definition of Indebtedness.
"LENDERS": as defined in the preamble hereto.
"LETTER OF CREDIT": a letter of credit issued by the Issuing Lender
pursuant to the terms of subsection 3.3.
"LEVERAGE RATIO": at any date, the ratio of Consolidated Total Debt
at such date to Consolidated EBITDA for the period of four consecutive fiscal
quarters ending on such date.
"LEVERAGE RATIO LEVEL": the existence of Leverage Ratio Level I,
Leverage Ratio Level II, Leverage Ratio Level III, Leverage Ratio Level IV,
Leverage Ratio Level V or Leverage Ratio Level VI, as the case may be.
"LEVERAGE RATIO LEVEL I": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is greater than or equal to 3.50 to 1.00.
"LEVERAGE RATIO LEVEL II": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 3.50 to 1.00 but greater than or equal to 3.00 to
1.00.
"LEVERAGE RATIO LEVEL III": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 3.00 to 1.00 but greater than or equal to 2.50 to
1.00.
"LEVERAGE RATIO LEVEL IV": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 2.50 to 1.00 but greater than or equal to 2.00 to
1.00.
"LEVERAGE RATIO LEVEL V": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 2.00 to 1.00 but greater than or equal to 1.50 to
1.00.
"LEVERAGE RATIO LEVEL VI": shall exist on an Adjustment Date if the
Leverage Ratio for the period of four consecutive fiscal quarters ending on the
last day of the period covered by the financial statements relating to such
Adjustment Date is less than 1.50 to 1.00.
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction in respect of
any of the foregoing except for the filing of financing statements in connection
with Lease Obligations incurred by the Company or its Subsidiaries to the extent
that such financing statements relate to the property subject to such Lease
Obligations).
"LOANS": the collective reference to the Term Loans, the Swing Line
Loans and the Revolving Credit Loans; individually, a "LOAN".
"MATERIAL ADVERSE EFFECT": a material adverse effect on the business,
financial condition, assets or results of operations of the Company and its
Subsidiaries taken as a whole.
"MATERIAL SUBSIDIARY": any Subsidiary of the Company or Holdings
which at any time has a total asset value (including the total asset values of
any Subsidiaries), or for which Holdings, the Company or any of their respective
Subsidiaries shall have paid consideration (including the assumption of
Indebtedness) in connection with the acquisition of the stock or the assets of
such Subsidiary, in excess of $20,000,000.
"MONEY MARKET RATE": for any day, with respect to any Money Market
Rate Loan, the rate per annum quoted by Chase to the Company in accordance with
subsection 3.7(a) as the rate at which Chase is willing to make such Loan.
"MONEY MARKET RATE LOANS": Swing Line Loans the rate of interest
applicable to which is based upon the Money Market Rate.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET PROCEEDS": the aggregate cash proceeds received by the Company
or any Subsidiary of the Company in respect of any Asset Sale, and any cash
payments received in respect of promissory notes or other non-cash consideration
delivered to the Company or such Subsidiary in respect of an Asset Sale (subject
to the limitations set forth in subsection 8.6(f)), net of (without duplication)
(i) the reasonable expenses (including legal fees and brokers' and underwriters'
commissions paid to third parties which are not Affiliates or Subsidiaries of
the Company) incurred in effecting such Asset Sale, (ii) any taxes reasonably
attributable to such Asset Sale and, in case of an Asset Sale in a foreign
jurisdiction, the repatriation of the proceeds of such Asset Sale reasonably
estimated by the Company or such Subsidiary to be actually payable, (iii) any
amounts payable to a Governmental Authority triggered as a result of any such
Asset Sale, (iv) any Indebtedness or Contractual Obligation of the Company and
its Subsidiaries (other than the Loans and other Obligations) required to be
paid or retained in connection with such Asset Sale and (v) the aggregate amount
of reserves required in the Company's reasonable judgment to be maintained on
the books of the Company in order to pay contingent liabilities with respect to
such Asset Sale; PROVIDED that amounts deducted from aggregate proceeds pursuant
to clause (v) and not actually paid by the Company or any of its Subsidiaries in
liquidation of such contingent liabilities shall be deemed to be Net Proceeds
and shall be prepaid in accordance with subsection 4.6 at such time as such
contingent liabilities shall cease to be obligations of the Company or any of
its Subsidiaries.
"NON-U.S. LENDER": as defined in subsection 4.18(e).
"NOTES": the collective reference to the Revolving Credit Notes, the
Swing Line Note and the Term Loan Notes; one of the Notes, a "NOTE".
"OBLIGATIONS": the unpaid principal of and interest on the Notes and
all other obligations and liabilities of the Company to the Administrative Agent
or the Lenders (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the Loans
and interest accruing at the then applicable rate provided in the Credit
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Company
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out of,
or in connection with, this Agreement, the Notes, the other Credit Documents,
any Letter of Credit or L/C Application, any agreements between the Company and
any Lender relating to interest rate, currency or similar swap and hedging
arrangements or any other document made, delivered or given in connection
therewith, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or any Lender) or
otherwise.
"PARTICIPANT": as defined in subsection 11.6(b)
"PARTICIPATING LENDER": any Lender (other than the Issuing Lender
with respect to such Letter of Credit) with respect to its L/C Participating
Interest in each Letter of Credit.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor thereto.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, limited liability company, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN": any pension plan which is covered by Title IV of ERISA and in
respect of which the Company or a Commonly Controlled Entity is an "employer" as
defined in Section 3(5) of ERISA.
"PLEDGE AGREEMENTS": the collective reference to the Holdings Pledge
Agreement, the Company Pledge Agreement, the Subsidiary Pledge Agreements and
any pledge agreement delivered after the Closing Date pursuant to subsection ;
individually, a "PLEDGE AGREEMENT".
"PLEDGED STOCK": as defined in the respective Pledge Agreements.
"PROPERTIES": each parcel of real property currently or previously
owned or operated by the Company or any Subsidiary of the Company.
"REFINANCING": the transactions described in subsection 6.1(d), (e)
and (f), and the transactions related thereto.
"REFUNDED SWING LINE LOANS": as defined in subsection 3.7(c).
"REGISTRATION STATEMENT": the Registration Statement No.
333-09897 on Form S-1, filed by Holdings with the Securities and Exchange
Commission on August 9, 1996.
"REGULATION G": Regulation G of the Board, as from time to time in
effect.
"REGULATION U": Regulation U of the Board, as from time to time in
effect.
"RELATED DOCUMENT": any agreement, certificate, document or
instrument relating to a Letter of Credit.
"RELEASE LENDERS": at a particular time, Lenders that hold Term Loans
and Revolving Credit Commitments in an aggregate principal amount equal to at
least 75% of the sum of the aggregate unpaid principal amount of the Term Loans
at such time, if any, and the aggregate Revolving Credit Commitments at such
time.
"REORGANIZATION": with respect to a Multiemployer Plan, the condition
that such Plan is in reorganization as such term is used in Section 4241 of
ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder.
"REQUIRED LENDERS": at a particular time, Lenders that hold Term
Loans and Revolving Credit Commitments in an aggregate principal amount equal to
at least 51% of the sum of the aggregate unpaid principal amount of the Term
Loans outstanding at such time, if any, and the aggregate Revolving Credit
Commitments at such time.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation (including, without limitation,
Environmental Laws) or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"RESPONSIBLE OFFICER": the chief executive officer or the chief
operating officer of the Company or, with respect to financial matters, the
chief financial officer or controller of the Company.
"REVOLVING CREDIT COMMITMENT": as to any Lender, its obligations to
make Revolving Credit Loans to the Company pursuant to subsection , and to
purchase its L/C Participating Interest in any Letter of Credit, in an aggregate
amount on the Closing Date not to exceed at any time the amount set forth
opposite such Lender's name in Schedule 1.1A under the heading "Revolving
Credit" and in an aggregate amount not to exceed at any time the amount equal to
such Lender's Revolving Credit Commitment Percentage of the aggregate Revolving
Credit Commitments, as the aggregate Revolving Credit Commitments may be reduced
from time to time pursuant to this Agreement; collectively, as to all the
Lenders, the "REVOLVING CREDIT COMMITMENTS".
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Lender, at any
time, the percentage which such Lender's Revolving Credit Commitment constitutes
of all of the Revolving Credit Commitments (or, if the Revolving Credit
Commitments shall have been terminated, the percentage of the outstanding
Aggregate Revolving Credit Extensions of Credit and Swing Line Loans constituted
by such Lender's Aggregate Revolving Credit Extensions of Credit and
participating interest in Swing Line Loans).
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and including
the Closing Date to but not including the Revolving Credit Termination Date.
"REVOLVING CREDIT LOAN" and "REVOLVING CREDIT LOANS": as defined in
subsection .
"REVOLVING CREDIT NOTE": as defined in subsection 4.2.
"REVOLVING CREDIT TERMINATION DATE": the earlier of (i) September 30,
2002 and (ii) any other date on which the Revolving Credit Commitments shall
terminate hereunder.
"REVOLVING L/C OBLIGATIONS": the obligations of the Company to
reimburse the relevant Issuing Lender for any payments made by the relevant
Issuing Lender under any Letter of Credit that have not been reimbursed by the
Company pursuant to subsection 3.6.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"STANDBY L/C": an irrevocable standby or direct pay Letter of Credit
under which the relevant Issuing Lender agrees to make payments in Dollars for
the account of the Company, on behalf of the Company or any Subsidiary thereof,
in respect of obligations of the Company or a Subsidiary thereof incurred
pursuant to contracts made or performance undertaken, or to be undertaken, or
like matters relating to contracts to which the Company or a Subsidiary thereof
is or proposes to become a party in the ordinary course of the Company's or such
Subsidiary's business, including, without limitation, for insurance purposes or
in respect of advance payments or as bid or performance bonds.
"SUBSIDIARY": as to any Person, any corporation, partnership or other
entity of which shares of stock of each class or other equity interests having
ordinary voting power (other than stock or other equity interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned by such Person or by one or more Subsidiaries
of such Person or by such Person and one or more Subsidiaries of such Person. A
Subsidiary shall be deemed wholly-owned by a Person who owns all of the voting
shares or other equity interests of such Subsidiary except for directors'
qualifying or similar shares.
"SUBSIDIARY GUARANTEE": the Subsidiary Guarantee to be executed by
each Subsidiary Guarantor in favor of the Administrative Agent, for the ratable
benefit of the Lenders, substantially in the form of Exhibit G hereto, as the
same may be amended, supplemented or otherwise modified from time to time.
"SUBSIDIARY GUARANTOR": the Material Subsidiaries of Holdings and
such other Subsidiaries as the Company may elect to include as guarantors, other
than Foreign Subsidiaries of Holdings or the Company or other Subsidiaries of
Holdings or the Company if more than 65% of the assets of such subsidiaries are
securities of foreign Persons (such determination to be made on the basis of
fair market value); PROVIDED that the term "Subsidiary Guarantor" shall, in any
event, include any Subsidiary which enters into a Guarantee pursuant to
subsection .
"SUBSIDIARY NOTE": the promissory note made by Gulfstream Aerospace
Corporation, a Georgia corporation and a Subsidiary of the Company, in favor of
the Company and evidencing the intercompany indebtedness owed from time to time
by such Subsidiary to the Company.
"SUBSIDIARY PLEDGE AGREEMENT": the Subsidiary Pledge Agreement to be
executed by each Subsidiary Pledgor in favor of the Administrative Agent, for
the ratable benefit of the Lenders, substantially in the form of Exhibit H
hereto, as the same may be amended, supplemented or otherwise modified from time
to time (it being understood and agreed that, subject to Section 7.8(c) hereof,
the Subsidiary Pledge Agreement shall not require a Subsidiary Pledgor to pledge
(x) any of the stock of any Foreign Subsidiary of the Subsidiary Pledgor, the
Company or Holdings which is owned by a Foreign Subsidiary of the Subsidiary
Pledgor, the Company or Holdings or (y) more than 65% of the stock of (i) any
other Foreign Subsidiary of the Subsidiary Pledgor, the Company or Holdings or
(ii) any other Subsidiary of the Subsidiary Pledgor, the Company or Holdings if
more than 65% of the assets of such Subsidiary are securities of foreign Persons
(such determination to be made on the basis of fair market value)).
"SUBSIDIARY PLEDGOR": Any Subsidiary of the Company which, after the
Closing Date, enters into a Pledge Agreement pursuant to subsection .
"SWING LINE COMMITMENT": Chase's obligation to make Swing Line Loans
pursuant to subsection 3.7.
"SWING LINE LOAN" and "SWING LINE LOANS": as defined in subsection
3.7(a).
"SWING LINE LOAN PARTICIPATION CERTIFICATE": a certificate in
substantially the form of Exhibit M hereto.
"SWING LINE NOTE": as defined in subsection 4.2.
"TERM INSTALLMENT PAYMENT DATE": as defined in subsection 2.2.
"TERM LOAN" and "TERM LOANS": as defined in subsection .
"TERM LOAN COMMITMENT": as to any Lender, its obligations to make
Term Loans to the Company pursuant to subSection in an aggregate amount not to
exceed the amount set forth opposite such Lender's name in Schedule 1.1A under
the heading "Term Loan", as the same may be reduced from time to time pursuant
to subsection 4.4; collectively, as to all the Lenders, the "TERM LOAN
COMMITMENTS".
"TERM LOAN COMMITMENT PERCENTAGE": as to any Lender, at any time, the
percentage of the aggregate principal amount of all Term Loans then outstanding
constituted by the aggregate principal amount of such Lender's Term Loans then
outstanding.
"TERM LOAN NOTE" and "TERM LOAN NOTES": as defined in subsection 4.2.
"TYPE": as to any Loan, its nature as an ABR Loan, a Eurodollar Loan,
or a Money Market Rate Loan.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"USED AIRCRAFT INVENTORY FINANCING": the collective reference to each
financing arrangement (other than any sale in which there is no recourse to the
Company or any of its Subsidiaries, to the extent that such a sale might be
deemed to be a financing arrangement) between any Financing Subsidiary and a
third party with regard to used aircraft held by the Company or any of its
Subsidiaries in inventory, substantially upon the terms set forth in Schedule
1.1B; PROVIDED, in any event, that all such arrangements collectively shall be
limited to such portion of the used aircraft inventory of the Company and its
Subsidiaries having a fair market value not in excess of $200,000,000 in the
aggregate.
"WORKING DAY": any day on which dealings in foreign currencies and
exchange between banks may be carried on in London, England and in New York, New
York.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, any other Credit Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the Notes, any other Credit Document and
any certificate or other document made or delivered pursuant hereto, accounting
terms relating to Holdings, the Company and its Subsidiaries not defined in
subSection and accounting terms partly defined in subSection to the extent not
defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to the singular and plural forms of such terms.
SECTION 2. TERM LOANS
2.1 TERM LOANS. Subject to the terms and conditions hereof, each
Lender severally agrees to make the term loans in Dollars (individually, a "TERM
LOAN"; and collectively, the "TERM LOANS") to the Company on the Closing Date in
an aggregate principal amount not to exceed such Lender's Term Loan Commitment.
The Term Loans shall initially be ABR Loans.
2.2 REPAYMENT OF TERM LOANS. The Company shall repay the Term Loans
in 22 consecutive quarterly installments on the last day of each March, June,
September and December (each such day, a "TERM INSTALLMENT PAYMENT DATE"),
commencing on June 30, 1997, each of which installments on any such date shall
be the amount set forth opposite such date below (or such earlier date on which
the Term Loans become due and payable hereunder):
Installment Date Amount
---------------- ------
June 30, 1997 6,666,666.00
September 30, 1997 6,666,667.00
December 31, 1997 6,666,667.00
March 31, 1998 18,750,000.00
June 30, 1998 18,750,000.00
September 30, 1998 18,750,000.00
December 31, 1998 18,750,000.00
March 31, 1999 18,750,000.00
June 30, 1999 18,750,000.00
September 30, 1999 18,750,000.00
December 31, 1999 18,750,000.00
March 31, 2000 18,750,000.00
June 30, 2000 18,750,000.00
September 30, 2000 18,750,000.00
December 31, 2000 18,750,000.00
March 31, 2001 18,750,000.00
June 30, 2001 18,750,000.00
September 30, 2001 18,750,000.00
December 31, 2001 18,750,000.00
March 31, 2002 26,666,666.00
June 30, 2002 26,666,667.00
September 30, 2002 26,666,667.00
2.3 PROCEEDS OF TERM LOANS. The Company shall use the proceeds of
the Term Loans solely (a) to finance in part the refinancing on the Closing Date
of the Existing Credit Agreements as described in subsection 6.1(f), (b) for the
payment of related fees and expenses in connection with the IPO and the
transactions contemplated hereby and (c) to effect the repurchase on the Closing
Date of the Holdings Preferred as described in subsection 6.1(e).
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS
3.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Lender agrees to extend credit to the Company from time
to time on any Borrowing Date during the Revolving Credit Commitment Period (i)
by purchasing an L/C Participating Interest in each Letter of Credit issued by
the Issuing Lender and (ii) by making loans in Dollars (individually, a
REVOLVING CREDIT LOAN, and collectively the "REVOLVING CREDIT LOANS") to the
Company from time to time. Notwithstanding the foregoing, in no event shall (i)
any Revolving Credit Loan or Swing Line Loan be made, or any Letter of Credit be
issued, if, after giving effect to such making or issuance and the use of
proceeds thereof as irrevocably directed by the Company, the sum of the
Aggregate Revolving Credit Extensions of Credit and the aggregate outstanding
principal amount of the Swing Line Loans would exceed the aggregate Revolving
Credit Commitments or if subsection 3.5 would be violated thereby, (ii) any
Revolving Credit Loan or Swing Line Loan be made, or any Letter of Credit be
issued, if the amount of such Loan to be made or any Letter of Credit to be
issued would, after giving effect to the use of proceeds, if any, thereof,
exceed the Available Revolving Credit Commitment or (iii) any Revolving Credit
Loan or Swing Line Loan be made, other than to fund Revolving L/C Obligations,
if the sum of the aggregate outstanding principal amount of Revolving Credit
Loans and the aggregate outstanding principal amount of Swing Line Loans would,
after giving effect to the making of such Revolving Credit Loans or such Swing
Line Loan and use of proceeds, if any, thereof, exceed $200,000,000. During
the Revolving Credit Commitment Period, the Company may use the Revolving Credit
Commitments by borrowing, prepaying the Revolving Credit Loans or Swing Line
Loans in whole or in part, and reborrowing, all in accordance with the terms
and conditions hereof, and/or by having the Issuing Lenders issue Letters of
Credit, having such Letters of Credit expire undrawn upon or if drawn upon,
reimbursing the relevant Issuing Lender for such drawing, and having the
Issuing Lenders issue new Letters of Credit.
(b) The Revolving Credit Loans shall on the Closing Date be made
initially as ABR Loans. Each borrowing of Revolving Credit Loans pursuant to
the Revolving Credit Commitments shall be in an aggregate principal amount of
the lesser of (i) $5,000,000, or a whole multiple of $1,000,000 in excess
thereof, and (ii) the Available Revolving Credit Commitments, except that any
borrowing of a Revolving Credit Loan to be used solely to pay a like amount of
Swing Line Loans may be in the aggregate principal amount of such Swing Line
Loans.
3.2 PROCEEDS OF REVOLVING CREDIT LOANS. The Company shall use the
proceeds of Revolving Credit Loans solely (a) for the purposes described in
subsection 2.3, (b) for financing general working capital needs of the Company
or any of its Subsidiaries, and (c) for other general corporate purposes of the
Company or any of its Subsidiaries, all in accordance with the terms and
conditions hereof.
3.3 ISSUANCE OF LETTERS OF CREDIT. (a) The Company may from time to
time request the Issuing Lender to issue a Letter of Credit, which may be either
a Standby L/C or a Commercial L/C, by delivering to the Administrative Agent at
its address specified in subSection and the Issuing Lender an L/C Application
completed to the satisfaction of the Issuing Lender, together with the proposed
form of such Letter of Credit (which shall comply with the applicable
requirements of paragraph (b) below) and such other certificates, documents and
other papers and information as the Issuing Lender may reasonably request. All
of the letters of credit issued and outstanding on the Closing Date under the
Existing Credit Agreements and set forth on Schedule 3.3 hereto shall on the
Closing Date remain outstanding and shall in each case be deemed to be, and
shall be, a Letter of Credit issued and outstanding under the terms of this
Agreement.
(b) Each Letter of Credit issued hereunder shall, among other things,
(i) be in such form requested by the Company as shall be acceptable to the
relevant Issuing Lender in its sole discretion and (ii) have an expiry date, in
the case of each Standby L/C, occurring not later than the earlier of (x) 365
days after the issuance of such Standby L/C and (y) the Revolving Credit
Termination Date, and in the case of each Commercial L/C, occurring not later
than the earlier of (x) 180 days after the date of issuance of such Commercial
L/C and (y) the Revolving Credit Termination Date. Each L/C Application and
each Letter of Credit shall be subject to the Uniform Customs and, to the extent
not inconsistent therewith, the laws of the State of New York.
3.4 PARTICIPATING INTERESTS. Effective in the case of each Letter of
Credit opened by the Issuing Lender as of the date of the opening thereof
(including each Letter of Credit set forth on Schedule 3.3 hereto and deemed
opened and outstanding as of the Closing Date), the Issuing Lender agrees to
allot and does allot, to itself and each other Lender, and each Lender severally
and irrevocably agrees to take and does take in such Letter of Credit and the
related L/C Application, an L/C Participating Interest in a percentage equal to
such Lender's Revolving Credit Commitment Percentage.
3.5 PROCEDURE FOR OPENING LETTERS OF CREDIT. Upon receipt of any L/C
Application from the Company in respect of a Letter of Credit, the
Administrative Agent will promptly notify each Lender thereof. The relevant
Issuing Lender will process such L/C Application, and the other certificates,
documents and other papers delivered to the Issuing Lender in connection
therewith, upon receipt thereof in accordance with its customary procedures and,
subject to the terms and conditions hereof, shall promptly open such Letter of
Credit by issuing the original of such Letter of Credit to the beneficiary
thereof and by furnishing a copy thereof to the Company and each of the other
Lenders, PROVIDED that no such Letter of Credit shall be issued (a) if
subsection would be violated thereby or (b) if the maximum aggregate amount
available to be drawn under all Letters of Credit outstanding at such time would
exceed $150,000,000.
3.6 PAYMENTS IN RESPECT OF LETTERS OF CREDIT. (a) The Company
agrees forthwith upon demand by the relevant Issuing Lender and otherwise in
accordance with the terms of the L/C Application relating thereto (i) to
reimburse the Issuing Lender, through the Administrative Agent, for any payment
made by the Issuing Lender under any Letter of Credit and (ii) to pay interest
on any unreimbursed portion of any such payment from the date of such payment
until reimbursement in full thereof at a rate per annum equal to (A) prior to
the date which is one Business Day after the day on which the Issuing Lender
demands reimbursement from the Company for such payment, the ABR plus the
Applicable Margin for ABR Loans and (B) on such date and thereafter, the ABR
plus the Applicable Margin for ABR Loans plus 2%.
(b) In the event that the Issuing Lender makes a payment under any
Letter of Credit and is not reimbursed in full therefor forthwith upon demand of
the Issuing Lender, and otherwise in accordance with the terms of the L/C
Application relating to such Letter of Credit, the Issuing Lender will promptly
notify each other Lender through the Administrative Agent. Forthwith upon its
receipt of any such notice, each other Lender will transfer to the Issuing
Lender, through the Administrative Agent, in immediately available funds, an
amount equal to such other Lender's PRO RATA share of the Revolving L/C
Obligation arising from such unreimbursed payment. Upon its receipt from such
other Lender of such amount, the Administrative Agent will complete, execute and
deliver to such other Lender an L/C Participation Certificate dated the date of
such receipt and in such amount.
(c) Whenever, at any time after the Issuing Lender has made a payment
under any Letter of Credit and has received from any other Lender such other
Lender's PRO RATA share of the Revolving L/C Obligation arising therefrom, the
Issuing Lender receives any reimbursement on account of such Revolving L/C
Obligation or any payment of interest on account thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded), the
Issuing Lender will, as promptly as practicable, distribute to such other
Lender, through the Administrative Agent, its PRO RATA share thereof in like
funds as received; PROVIDED, that in the event that the receipt by the Issuing
Lender of such reimbursement or such payment of interest (as the case may be) is
required to be returned, such other Lender will return to the Issuing Lender,
through the Administrative Agent, any portion thereof previously distributed by
the Issuing Lender to it in like funds as such reimbursement or payment is
required to be returned by the Issuing Lender.
3.7 SWING LINE COMMITMENT. (a) Subject to the terms and conditions
hereof, Chase agrees to make swing line loans (individually, a "SWING LINE
LOAN"; collectively, the "SWING LINE LOANS") to the Company from time to time
during the Revolving Credit Commitment Period in an aggregate principal amount
at any one time outstanding not to exceed $20,000,000, PROVIDED that at no time
may the sum of the aggregate outstanding principal amount of the Swing Line
Loans and the Aggregate Revolving Credit Extensions of Credit exceed the
Revolving Credit Commitments. Amounts borrowed by the Company under this
subsection may be repaid and, through but excluding the Revolving Credit
Termination Date, reborrowed. All Swing Line Loans may from time to time be (i)
ABR Loans, (ii) Money Market Rate Loans or (iii) a combination thereof, and
shall not be entitled to be converted into Eurodollar Loans. The Company shall
give Chase irrevocable notice (which notice must be received by Chase prior to
12:00 Noon, New York City time) on the requested Borrowing Date specifying the
amount of each requested Swing Line Loan, which shall be in minimum amounts of
$500,000 or a whole multiple thereof, in the case of Swing Line Loans which are
ABR Loans, or $2,000,000 or a whole multiple thereof, in the case of Swing Line
Loans which are Money Market Rate Loans. In the case of any Swing Line Loans
that the Company desires to request as Money Market Rate Loans, the Company may,
on any Borrowing Date for Swing Line Loans and prior 12:00 noon, New York City
time, request a quote of the Money Market Rate which would be applicable for
such Swing Line Loans from Chase, specifying the amount of the proposed Money
Market Rate Loans. Upon receipt of such quote, the Company shall promptly (but
not later than 12:00 noon, New York City time on such Borrowing Date) notify
Chase whether it requests Chase to make Money Market Rate Loans at such Money
Market Rate. The proceeds of each Swing Line Loan will be made available by
Chase to the Company by crediting the account of the Company at Chase with such
proceeds. The proceeds of Swing Line Loans may be used solely for the purposes
referred to in subsection 3.2.
(b) The Swing Line Loans shall be evidenced by a promissory note of
the Company substantially in the form of Exhibit C, with appropriate insertions
(the "SWING LINE NOTE"), payable to the order of Chase and representing the
obligation of the Company to pay the aggregate unpaid principal amount of the
Swing Line Loans, with interest thereon as prescribed in subsection 4.7. Chase
is hereby authorized to record the Borrowing Date, the amount of each Swing Line
Loan and the date and amount of each payment or prepayment of principal thereof,
on the schedule annexed to and constituting a part of the Swing Line Note and,
in the absence of manifest error, any such recordation shall constitute PRIMA
FACIE evidence of the accuracy of the information so recorded, PROVIDED that the
failure of Chase to make such recordation (or any error in such recordation)
shall not affect the obligations of the Company hereunder or under the Swing
Line Note. The Swing Line Note shall (a) be dated the Closing Date, (b) be
stated to mature on the Revolving Credit Termination Date and (c) bear interest
for the period from the date thereof 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, subsection 4.7.
(c) Chase at any time in its sole and absolute discretion may, and on
the fifteenth day (or if such day is not a Business Day, the next Business Day)
and the last Business Day of each month shall, on behalf of the Company (which
hereby irrevocably directs Chase to act on its behalf), request each Lender,
including Chase, to make a Revolving Credit Loan in an amount equal to such
Lender's Revolving Credit Commitment Percentage of the amount of the Swing Line
Loans (the "REFUNDED SWING LINE LOANS") outstanding on the date such notice is
given. Unless any of the events described in paragraph (f) of Section shall
have occurred (in which event the procedures of paragraph (d) of this subsection
shall apply) each Lender shall make the proceeds of its Revolving Credit Loan
available to Chase for the account of Chase at the office of Chase located at
270 Park Avenue, New York, New York 10017 prior to 12:00 Noon (New York City
time) in funds immediately available on the Business Day next succeeding the
date such notice is given. The proceeds of such Revolving Credit Loans shall be
immediately applied to repay the Refunded Swing Line Loans. Refunded Swing Line
Loans shall be initially ABR Loans or (subject to the requirements of subsection
4.1) Eurodollar Loans.
(d) If prior to the making of a Revolving Credit Loan pursuant to
paragraph (c) of this subsection one of the events described in paragraph (f) of
Section shall have occurred, each Lender will, on the date such Loan would
otherwise have been made, purchase an undivided participating interest in the
Refunded Swing Line Loans in an amount equal to its Revolving Credit Commitment
Percentage of such Refunded Swing Line Loans. Each Lender will immediately
transfer to Chase, in immediately available funds, the amount of its
participation and upon receipt thereof Chase will deliver to such Lender a Swing
Line Loan Participation Certificate dated the date of receipt of such funds and
in such amount.
(e) Whenever, at any time after Chase has received from any Lender
such Lender's participating interest in a Swing Line Loan, Chase receives any
payment on account thereof, Chase will distribute to such Lender its
participating interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded) in like funds as received;
PROVIDED, HOWEVER, that in the event that such payment received by Chase is
required to be returned, such Lender will return to Chase any portion thereof
previously distributed by Chase to it in like funds as such payment is required
to be returned by Chase.
3.8 PARTICIPATIONS. Each Lender's obligation to purchase
participating interests pursuant to subsections 3.4 and 3.7(d) is absolute and
unconditional as set forth in subsection 4.16.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO
LOANS AND LETTERS OF CREDIT _
4.1 PROCEDURE FOR BORROWING. (a) The Company may borrow under the
Commitments on any Working Day, if the borrowing is of Eurodollar Loans, or on
any Business Day, if the borrowing is of ABR Loans, PROVIDED that, with respect
to the borrowings to take place on the Closing Date, the Company shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, on the Closing
Date), and with respect to any subsequent borrowings, the Company shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time, (i) three Working
Days prior to the requested Borrowing Date if all or any part of the Loans are
to be Eurodollar Loans and (ii) one Business Day prior to the requested
Borrowing Date if the borrowing is to be solely of ABR Loans) specifying (A) the
amount of the borrowing, (B) whether such Loans are initially to be Eurodollar
Loans or ABR Loans, or a combination thereof, and (C) if the borrowing is to be
entirely or partly Eurodollar Loans, the length of the Interest Period for such
Eurodollar Loans. Upon receipt of such notice the Administrative Agent shall
promptly notify each Lender (which notice shall in any event be delivered to
each Lender by 4:00 P.M., New York City time, on such date). Not later than
12:00 Noon, New York City time, on the Borrowing Date specified in such notice,
each Lender shall make available to the Administrative Agent at the office of
the Administrative Agent specified in subsection (or at such other location as
the Administrative Agent may direct) an amount in immediately available funds
equal to the amount of the Loan to be made by such Lender. Loan proceeds
received by the Administrative Agent hereunder shall promptly be made available
to the Company by the Administrative Agent's crediting the account of the
Company, at the office of the Administrative Agent specified in subsection ,
with the aggregate amount actually received by the Administrative Agent from the
Lenders and in like funds as received by the Administrative Agent.
(b) Any borrowing of Eurodollar Loans hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, (i) the aggregate principal amount of all Eurodollar Loans having the
same Interest Period shall not be less than $5,000,000, or a whole multiple of
$1,000,000 in excess thereof, and (ii) no more than ten Interest Periods shall
be in effect at any one time.
(c) Eurodollar Loans shall be made by each Lender at its Eurodollar
Lending Office and ABR Loans shall be made by each Lender at its ABR Lending
Office.
4.2 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Company hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender (i) the then unpaid principal amount of each Revolving Credit Loan
of such Lender on the Revolving Credit Termination Date (or such earlier date on
which the Revolving Credit Loans become due and payable pursuant to Section 9)
and (ii) the principal amount of the Term Loan of such Lender, in accordance
with the applicable amortization schedule set forth in subsection 2.2 (or the
then unpaid principal amount of such Term Loans, on the date that any or all of
the Term Loans become due and payable pursuant to Section 9). The Company
hereby further agrees to pay interest on the unpaid principal amount of the
Loans from time to time outstanding from the date hereof until payment in full
thereof at the rates per annum, and on the dates, set forth in subsection 4.7.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Company to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 11.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Company to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Company and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 4.2(b) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Company therein recorded; PROVIDED, HOWEVER, that the failure
of any Lender or the Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Company to repay (with applicable interest) the Loans made to such Company
by such Lender in accordance with the terms of this Agreement.
(e) The Company agrees that, upon the request to the Company and the
Administrative Agent by any Lender, the Company will execute and deliver to such
Lender (i) a promissory note of the Company evidencing the Revolving Credit
Loans of such Lender, substantially in the form of Exhibit A, with appropriate
insertions as to date and principal amount (a "REVOLVING CREDIT NOTE"), (ii) a
promissory note of the Company evidencing the Swing Line Loans of such Lender,
substantially in the form of Exhibit B, with appropriate insertions as to date
and principal amount (a "SWING LINE NOTE"), and (iii) a promissory note of the
Company evidencing the Term Loans of such Lender, substantially in the form of
Exhibit C with appropriate insertions as to date and principal amount (a "TERM
NOTE").
4.3 CONVERSION OPTIONS. The Company may elect from time to time to
convert Eurodollar Loans into ABR Loans by giving the Administrative Agent
irrevocable notice of such election, to be received by the Administrative Agent
prior to 12:00 Noon, New York City time, at least three Working Days prior to
the proposed conversion date, PROVIDED that any such conversion of Eurodollar
Loans shall only be made on the last day of an Interest Period with respect
thereto. The Company may elect from time to time to convert all or a portion of
the ABR Loans (other than Swing Line Loans) then outstanding to Eurodollar Loans
by giving the Administrative Agent irrevocable notice of such election, to be
received by the Administrative Agent prior to 12:00 Noon, New York City time, at
least three Working Days prior to the proposed conversion date, specifying the
Interest Period selected therefor, and, if no Default or Event of Default has
occurred and is continuing, such conversion shall be made on the requested
conversion date or, if such requested conversion date is not a Working Day, on
the next succeeding Working Day. Upon receipt of any notice pursuant to this
subsection 4.3, the Administrative Agent shall promptly, but in any event by
4:00 P.M., New York City time, notify each Lender thereof. All or any part of
the outstanding Loans (other than Swing Line Loans) may be converted as
provided herein, PROVIDED that partial conversions of Loans shall be in the
aggregate principal amount of $5,000,000, or a whole multiple of $1,000,000 in
excess thereof, and the aggregate principal amount of the resulting Eurodollar
Loans outstanding in respect of any one Interest Period shall be at least
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.
4.4 CHANGES OF COMMITMENT AMOUNTS. (a) The Company shall have the
right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate or, from time to time, reduce the Revolving Credit
Commitments subject to the provisions of this subsection 4.4. To the extent, if
any, that the sum of the amount of the Revolving Credit Loans, Swing Line Loans
and Revolving L/C Obligations then outstanding and the amounts available to be
drawn under outstanding Letters of Credit exceeds the amount of the Revolving
Credit Commitments as then reduced, the Company shall be required to make a
prepayment equal to such excess amount, the proceeds of which shall be applied
FIRST, to payment of the Swing Line Loans then outstanding, SECOND, to payment
of the Revolving Credit Loans then outstanding, THIRD, to payment of any
Revolving L/C Obligations then outstanding, and LAST, to cash collateralize any
outstanding Letters of Credit on terms reasonably satisfactory to the
Administrative Agent. Any such termination of the Revolving Credit Commitments
shall be accompanied by prepayment in full of the Revolving Credit Loans, Swing
Line Loans and Revolving L/C Obligations then outstanding and by cash
collateralization of any outstanding Letter of Credit on terms reasonably
satisfactory to the Administrative Agent.
(b) Interest accrued on the amount of any partial prepayment pursuant
to this subsection 4.4 to the date of such partial prepayment shall be paid on
the Interest Payment Date next succeeding the date of such partial prepayment.
In the case of the termination of the Revolving Credit Commitments, interest
accrued on the amount of any prepayment relating thereto and any unpaid
commitment fee accrued hereunder shall be paid on the date of such prepayment
or termination, as the case may be. Any such partial reduction of the
Revolving Credit Commitments shall be in an amount of $2,500,000 or a whole
multiple of $1,000,000 in excess thereof, and shall, in each case, reduce
permanently the amount of the Revolving Credit Commitments, then in effect.
4.5 OPTIONAL PREPAYMENTS. The Company may at any time and from time
to time prepay Loans, in whole or in part, without premium or penalty, upon at
least one Business Days' irrevocable notice to the Administrative Agent in the
case of ABR Loans, and three Business Days' irrevocable notice to the
Administrative Agent in the case of Eurodollar Loans, specifying the date and
amount of prepayment and whether the prepayment is of Revolving Credit Loans or
Term Loans, PROVIDED that Eurodollar Loans may not be optionally prepaid on
other than the last day of any Interest Period with respect thereto. Upon
receipt of such notice the Administrative Agent shall promptly notify each
Lender thereof. If such notice is given, the Company shall make such
prepayment, and the payment amount specified in such notice shall be due and
payable, on the date specified therein. Accrued interest on any Notes or on
the amount of any Loans paid in full pursuant to this subsection 4.5 shall be
paid on the date of such prepayment. Accrued interest on the amount of any
partial prepayment shall be paid on the Interest Payment Date next succeeding
the date of such partial prepayment (or in the case of prepayment in full of
Term Loans, on the date of such payment. Partial prepayments (i) of Term
Loans shall be in an aggregate principal amount equal to the lesser of
(A) $2,500,000 or a whole multiple of $1,000,000 in excess thereof and
(B) the aggregate unpaid principal amount of the Term Loans, as the case may
be, and (ii) of Revolving Credit Loans shall be in an aggregate principal
amount equal to the lesser of (A) $2,500,000 or a whole multiple of $1,000,000
in excess thereof and (B) the aggregate unpaid principal amount of the
Revolving Credit Loans, as the case may be. Except as otherwise may be agreed
by the Company and the Required Lenders, any prepayment of the Term Loans
pursuant to this subsection 4.5 shall be applied, FIRST, to the installments
of the Term Loans scheduled to be paid during the next twelve months after
the date of such prepayment and SECOND the balance, if any, to the remaining
installments of the Term Loans on a PRO RATA basis. Amounts prepaid on
account of the Term Loans pursuant to this subsection 4.5 or otherwise
may not be reborrowed.
4.6 MANDATORY PREPAYMENTS. (a) Subject to the provisions of
subsection promptly following the consummation of any Asset Sale by the Company
or any of its Subsidiaries, in the case of cash proceeds, and promptly following
receipt of cash proceeds representing payments under notes or other securities
received in connection with any non-cash consideration obtained in connection
with such Asset Sale, the Company shall, to the extent that the cumulative
amount of Net Proceeds received after the Closing Date exceeds $20,000,000,
apply such amount of the Net Proceeds of such Asset Sale in excess of
$20,000,000, FIRST, to the installments of the Term Loans scheduled to be paid
during the next twelve months after the date of such prepayment and SECOND to
the remaining installments of the Term Loans on a PRO RATA basis.
(b) Upon receipt by the Administrative Agent of the Net Proceeds
required to be paid to the Lenders hereunder from any Asset Sale (i) consisting
of the sale of all of the shares of stock of any Subsidiary Guarantor, the
obligations of such Subsidiary Guarantor under its Guarantee shall automatically
be discharged and released without any further action by the Administrative
Agent or any Lender, PROVIDED that the Administrative Agent and the Lenders
agree, upon the request of the Company, to execute and deliver any instrument or
other document in a form acceptable to the Administrative Agent which may
reasonably be required to evidence such discharge and release and (ii) in
connection with the sale or other disposition of the capital stock of a
Subsidiary of the Company, the Administrative Agent shall release to the pledgor
thereof, without representation, warranty or recovery, express or implied, the
capital stock of such Subsidiary held by it as Pledged Stock (as defined in the
relevant Pledge Agreement), if any, under the relevant Pledge Agreement.
(c) The Company shall give the Administrative Agent (which shall
promptly notify each Lender) at least one Business Day's notice of each
prepayment pursuant to this subsection 4.6 setting forth the date and amount
thereof. Prepayment of Eurodollar Loans, if not on the last day of the Interest
Period with respect thereto, shall, at the Company's option as long as no
Default or Event of Default has occurred and is continuing, be prepaid subject
to the provisions of subsection 4.21 or such Net Proceeds (after application to
any ABR Loans) shall be deposited with the Administrative Agent as cash
collateral for such Eurodollar Loans on terms reasonably satisfactory to the
Administrative Agent and thereafter shall be applied to the prepayment of the
Term Loans constituting Eurodollar Loans on the last day of the respective
Interest Periods for such Eurodollar Loans next ending most closely to the
date of receipt of such Net Proceeds. After such application, unless a
Default or an Event of Default shall have occurred and be continuing,
any remaining interest earned on such cash collateral shall be paid to the
Company.
(d) Amounts prepaid on account of the Term Loans pursuant to this
subsection 4.6 or otherwise may not be reborrowed. Accrued interest on any Term
Loans prepaid pursuant to this subsection 4.6 shall be paid on the Interest
Payment Date next succeeding the date of any partial prepayment and on the date
of such payment or prepayment in the case of a payment or prepayment in full of
the Term Loans.
(e) Upon the Revolving Credit Termination Date the Company shall,
with respect to each then outstanding Letter of Credit, if any, cause such
Letter of Credit to be cancelled without such Letter of Credit being drawn upon.
4.7 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto on the unpaid principal amount thereof at a rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable Margin.
(b) ABR Loans shall bear interest for the period from and including
the date thereof until maturity thereof on the unpaid principal amount thereof
at a rate per annum equal to the ABR plus the Applicable Margin.
(c) Money Market Rate Loans shall bear interest for the period from
and including the date thereof until maturity thereof on the unpaid principal
amount thereof at a rate per annum equal to the Money Market Rate plus the
Applicable Margin for ABR Loans.
(d) If all or a portion of (i) the principal amount of any of the
Loans or (ii) any interest payable thereon shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amount
shall, without limiting the rights of the Lenders under Section , bear interest
at a rate per annum which is (x) in the case of overdue principal, 2% above the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this subsection or (y) in the case of overdue interest, 2% above
the rate described in paragraph (b) of this subsection, in each case from the
date of such nonpayment until such amount is paid in full (as well after as
before judgment).
(e) Interest shall be payable in arrears on each Interest Payment
Date; PROVIDED that interest accruing pursuant to paragraph (c) of this
subsection shall be payable on demand.
4.8 COMPUTATION OF INTEREST AND FEES. (a) Interest in respect of ABR
Loans at any time the ABR is calculated based on the Prime Rate and all fees
hereunder shall be calculated on the basis of a 365 or 366, as the case may be,
day year for the actual days elapsed. Interest in respect of Eurodollar Loans
and ABR Loans at any time the ABR is not calculated based on the Prime Rate
shall be calculated on the basis of a 360 day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
Company and the Lenders of each determination of a Eurodollar Rate. Any change
in the interest rate on a Loan resulting from a change in the ABR or the
Eurocurrency Reserve Requirement shall become effective as of the opening of
business on the day on which such change in the ABR or the Eurocurrency Reserve
Requirement, as the case may be, becomes effective. The Administrative Agent
shall as soon as practicable notify the Company and the Lenders of the effective
date and the amount of each such change.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Company and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Company, deliver to the
Company a statement showing the quotations used by the Administrative Agent in
determining the Eurodollar Rate.
4.9 COMMITMENT FEES. The Company agrees to pay to the Administrative
Agent, for the account of each Lender, a commitment fee of 0.375% per annum from
and including the Closing Date to but excluding the Revolving Credit Termination
Date on the amount of such Lender's Available Revolving Credit Commitment during
the period for which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Credit
Termination Date or such earlier date as the Revolving Credit Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the date hereof, PROVIDED that, from and after the first Adjustment Date,
the rate for such commitment fee will be adjusted, if required, on each
Adjustment Date, to the rate set forth on ANNEX A hereto opposite the Leverage
Ratio Level of the Company in effect on such Adjustment Date and PROVIDED,
FURTHER, that, in the event that the financial statements required to be
delivered pursuant to subsection 7.1(a) or 7.1(b), as applicable, and the
related certificate required pursuant to subsection 7.2(b), are not delivered
when due, then, during the period from the date upon which such financial
statements were required to be delivered until one Business Day following the
date upon which they actually are delivered, the Leverage Ratio Level I shall be
deemed to be in effect for the purposes of determining the rate for such
commitment fee for such period.
4.10 CERTAIN FEES. The parties hereto acknowledge and agree that the
Company has agreed to pay to Chase the fees set forth in the letter agreement
dated as of August 9, 1996 between the Company, Chase and Chase Securities Inc.
The parties hereto acknowledge and agree that the Company's only obligation is
to pay such fees to Chase in accordance with the terms of such letter agreement
and the Company is not liable or otherwise obligated to the Lenders to pay such
fees.
4.11 LETTER OF CREDIT FEES. (a) In lieu of any letter of credit
commissions and fees provided for in any L/C Application relating to Standby
L/Cs (other than standard administrative issuance, amendment and negotiation
fees), the Company agrees to pay the Administrative Agent, for the account of
the Issuing Lender and the Participating Lenders, with respect to each Standby
L/C, a Standby L/C fee equal to the Applicable Margin for Eurodollar Loans then
in effect plus 1/4 of 1% per annum (of which the Issuing Lender shall retain for
its own account, as the Issuing Lender and not on account of its L/C
Participating Interest therein, 1/4 of 1% per annum) on the amount available to
be drawn under each Standby L/C payable, in arrears, on the last day of each
fiscal quarter of the Company.
(b) In lieu of any letter of credit commissions and fees provided for
in any L/C Application relating to Commercial L/Cs (other than standard
administrative issuance, amendment and negotiation fees), the Company agrees to
pay the Administrative Agent, for the account of the Issuing Lender and the
Participating Lenders, with respect to each Commercial L/C, a Commercial L/C fee
of 3/4 of 1% (of which the Issuing Lender shall retain for its own account, as
the Issuing Lender and not on account of its L/C Participating Interest therein,
1/4 of 1%) on the maximum face amount of each Commercial L/C payable on the date
such Commercial L/C is issued.
(c) In connection with any payment of fees pursuant to this
subsection 4.11, the Administrative Agent agrees to provide to the Company a
statement of any such fees so paid; PROVIDED that the failure by the
Administrative Agent to provide the Company with any such invoice shall not
relieve the Company of its obligation to pay such fees.
4.12 LETTER OF CREDIT RESERVES. (a) If any Change in Law after the
date of this Agreement shall either (i) impose, modify, deem or make applicable
any reserve, special deposit, assessment or similar requirement against letters
of credit issued by the Issuing Lender or (ii) impose on the Issuing Lender any
other condition regarding this Agreement or any Letter of Credit, and the result
of any event referred to in clause (i) or (ii) above shall be to increase the
cost to the Issuing Lender of issuing or maintaining any Letter of Credit (which
increase in cost shall be the result of the Issuing Lender's reasonable
allocation of the aggregate of such cost increases resulting from such events),
then, upon demand by the Issuing Lender, the Company shall immediately pay to
the Issuing Lender, from time to time as specified by the Issuing Lender,
additional amounts which shall be sufficient to compensate the Issuing Lender
for such increased cost, together with interest on each such amount from the
date demanded until payment in full thereof at a rate per annum equal to the ABR
plus the Applicable Margin for ABR Loans. A certificate submitted by the
Issuing Lender to the Company concurrently with any such demand by the Issuing
Lender, shall be conclusive, absent manifest error, as to the amount thereof.
(b) In the event that at any time after the date hereof any Change
in Law with respect to the Issuing Lender shall, in the opinion of the
Issuing Lender, require that any obligation under any Letter of Credit be
treated as an asset or otherwise be included for purposes of calculating the
appropriate amount of capital to be maintained by the Issuing Lender or any
corporation controlling the Issuing Lender, and such Change in Law shall have
the effect of reducing the rate of return on the Issuing Lender's or such
corporation's capital, as the case may be, as a consequence of the Issuing
Lender's obligations under such Letter of Credit to a level below that which
the Issuing Lender or such corporation, as the case may be, could have
achieved but for such Change in Law (taking into account the Issuing Lender's
or such corporation's policies, as the case may be, with respect to capital
adequacy) by an amount deemed by the Issuing Lender to be material, then from
time to time following notice by the Issuing Lender to the Company of such
Change in Law, within 15 days after demand by the Issuing Lender, the Company
shall pay to the Issuing Lender such additional amount or amounts as will
compensate the Issuing Lender or such corporation, as the case may be, for
such reduction. If the Issuing Lender becomes entitled to claim any
additional amounts pursuant to this subsection 4.12(b), it shall promptly
notify the Company of the event by reason of which it has become so entitled.
A certificate submitted by the Issuing Lender to the Company concurrently
with any such demand by the Issuing Lender, shall be conclusive, absent
manifest error, as to the amount thereof.
(c) The Company agrees that the provisions of the foregoing
paragraphs (a) and (b) and the provisions of each L/C Application providing for
reimbursement or payment to the Issuing Lender in the event of the imposition or
implementation of, or increase in, any reserve, special deposit, capital
adequacy or similar requirement in respect of the Letter of Credit relating
thereto shall apply equally to each Participating Lender in respect of its L/C
Participating Interest in such Letter of Credit, as if the references in such
paragraphs and provisions referred to, where applicable, such Participating
Lender or any corporation controlling such Participating Lender.
4.13 FURTHER ASSURANCES. The Company hereby agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender to effect more fully the
purposes of this Agreement and the issuance of Letters of Credit hereunder. The
Company further agrees to execute any and all instruments reasonably requested
by the Issuing Lender in connection with the obtaining and/or maintaining of any
insurance coverage applicable to any Letters of Credit.
4.14 OBLIGATIONS ABSOLUTE. The payment obligations of the Company
under this Agreement with respect to the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:
(i) the existence of any claim, set-off, defense or other
right which the Company or any of its Subsidiaries may have at any time
against any beneficiary, or any transferee, of any Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), the Issuing Lender, the Administrative Agent or any Lender, or any
other Person, whether in connection with this Agreement, the Related
Documents, any Credit Documents, the transactions contemplated herein, or
any unrelated transaction;
(ii) any statement or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect, except where acceptance thereof constitutes gross negligence or
willful misconduct on the part of the Issuing Lender;
(iii) payment by the Issuing Lender under any Letter of
Credit against presentation of a draft or certificate which does not comply
with the terms of such Letter of Credit, except where such payment
constitutes gross negligence or wilful misconduct on the part of the
Issuing Lender; or
(iv) any other circumstances or happening whatsoever,
whether or not similar to any of the foregoing, except for any such
circumstances or happening constituting gross negligence or willful
misconduct on the part of the Issuing Lender.
4.15 ASSIGNMENTS. No Participating Lender's participation in any
Letter of Credit or any of its rights or duties hereunder shall be subdivided,
assigned or transferred (other than in connection with a transfer of part or all
of such Participating Lender's Revolving Credit Commitment in accordance with
subsection ) without the prior written consent of the relevant Issuing Lender,
which consent will not be unreasonably withheld. Such consent may be given or
withheld without the consent or agreement of any other Participating Lender.
Notwithstanding the foregoing, a Participating Lender may subparticipate its L/C
Participating Interest without obtaining the prior written consent of the
relevant Issuing Lender.
4.16 PARTICIPATIONS. Each Lender's obligation to purchase
participating interests pursuant to subsections 3.4 and 3.7(d) shall be absolute
and unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Issuing Lender, the Company,
Holdings or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of the Company; (iv) any breach of this
Agreement by the Company or any other Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
4.17 INABILITY TO DETERMINE INTEREST RATE. In the event that the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that (a) by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest Period with respect
to (i) proposed Loans that the Company has requested be made as Eurodollar
Loans, (ii) any Eurodollar Loans that will result from the requested conversion
of all or part of ABR Loans into Eurodollar Loans or (iii) the continuation of
any Eurodollar Loan as such for an additional Interest Period, or (b) dollar
deposits in the relevant amount and for the relevant period with respect to any
such Eurodollar Loan are not available to any of the Lenders in their respective
Eurodollar Lending Offices' interbank eurodollar market, the Administrative
Agent shall forthwith give notice of such determination, confirmed in writing,
to the Company and the Lenders at least one day prior to, as the case may be,
the requested Borrowing Date, the conversion date or the last day of such
Interest Period. If such notice is given (i) any requested Eurodollar Loans
shall be made as ABR Loans, (ii) any ABR Loans that were to have been converted
to Eurodollar Loans shall be continued as ABR Loans, and (iii) any outstanding
Eurodollar Loans shall be converted, on the last day of the then current
Interest Period applicable thereto, into ABR Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar Loans shall be
made.
4.18 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing of any
Loans (other than Swing Line Loans) by the Company from the Lenders, each
payment by the Company on account of any fee hereunder (other than as set forth
in subsections 4.9, 4.10 and 4.11), and payments to Lenders in respect of
proceeds of Collateral and any reduction of the Term Loan Commitments and the
Revolving Credit Commitments of the Lenders hereunder shall be made PRO RATA
according to the relevant Commitment Percentages of the Lenders. Each payment
(including each prepayment) by the Company on account of principal of and
interest on the Loans (other than Swing Line Loans and other than as set forth
in subsections 4.19, 4.20 and 4.21) shall be made PRO RATA according to the
relevant Commitment Percentages of the Lenders. All payments (including
prepayments) to be made by the Company on account of principal, interest and
fees shall be made without set-off or counterclaim and shall be made to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office located at 270 Park Avenue, New York, New York 10017, in
lawful money of the United States of America and in immediately available
funds. The Administrative Agent shall promptly distribute such payments
ratably to each Lender in like funds as received. If any payment hereunder
(other than payments on Eurodollar Loans) 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. If
any payment on a Eurodollar Loan becomes due and payable on a day other than a
Working Day, the maturity thereof shall be extended to the next succeeding
Working Day unless the result of such extension would be to extend such payment
into another calendar month in which event such payment shall be made on the
immediately preceding Working Day.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will not make
the amount which would constitute its relevant Commitment Percentage of the
borrowing on such 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 in accordance with subsection and
the Administrative Agent may, in reliance upon such assumption, make available
to the Company a corresponding amount. If such amount is made available to the
Administrative Agent by such Lender on a date after such Borrowing Date, such
Lender shall pay to the Administrative Agent on demand an amount equal to the
product of (i) the daily average Federal funds rate during such period as quoted
by the Administrative Agent, times (ii) the amount of such Lender's relevant
Commitment Percentage of such borrowing not made available on the Borrowing
Date, times (iii) a fraction the numerator of which is the number of days that
elapse from and including such Borrowing Date to the date on which such Lender's
relevant Commitment Percentage of such borrowing shall have become immediately
available to the Administrative Agent and the denominator of which is 360. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this subsection 4.18(b) shall be conclusive, absent
manifest error. If such Lender's relevant Commitment Percentage of such
borrowing is not in fact made available to the Administrative Agent by such
Lender within three Business Days of such Borrowing Date, the Administrative
Agent shall be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans hereunder and on demand, from the Company,
without prejudice to any rights which the Company or the Administrative Agent
may have against such Lender hereunder. Nothing contained in this subsection
4.18(b) shall relieve any Lender which has failed to make available its ratable
portion of any borrowing hereunder from its obligation to do so in accordance
with the terms hereof.
(c) The failure of any Lender to make the Loan to be made by it on
any Borrowing Date shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on such Borrowing Date.
(d) All payments and optional prepayments (other than prepayments as
set forth in subsection 4.20 with respect to increased costs) of Eurodollar
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
Eurodollar Loans with the same Interest Period shall not be less than $5,000,000
or a whole multiple of $1,000,000 in excess thereof.
(e) Each Lender, Assignee and Participant that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of
America, or any estate or trust that is subject to U.S. federal income taxation
regardless of the source of its income (a"Non-U.S. Lender") shall deliver to the
Company and the Administrative Agent, and if applicable, the assigning Lender
(or, in the case of a Participant, to the Lender from which the related
participation shall have been purchased) on or before the date on which it
becomes a party to this Agreement (or, in the case of a Participant, on or
before the date on which such Participant purchases the related participation)
either:
(A) (x) two duly completed and signed copies of either Internal
Revenue Service Form 1001 (relating to such Non-U.S. Lender and entitling
it to a complete exemption from withholding of U.S. Taxes on all amounts to
be received by such Non-U.S. Lender pursuant to this Agreement and the
other Credit Documents) or Form 4224 (relating to all amounts to be
received by such Non-U.S. Lender pursuant to this Agreement and the other
Credit Documents), or successor and related applicable forms, as the case
may be, and (y) two duly completed and signed copies of Internal Revenue
Service Form W-8 or W-9, or successor and related applicable forms, as the
case may be; or
(B) in the case of a Non-U.S. Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and that does not comply
with the requirements of clause (A) hereof, (x) a statement in the form of
Exhibit I (or such other form of statement as shall be reasonably requested
by the Company from time to time) to the effect that such Non-U.S. Lender
is eligible for a complete exemption from withholding of U.S. Taxes under
Code Section 871(h) or 881(c), and (y) two duly completed and signed copies
of Internal Revenue Service Form W-8 or successor and related applicable
form (it being understood and agreed that no Participant and, without the
prior written consent of the Company described in clause (C) of the proviso
to the first sentence of subsection , no Assignee shall be entitled to
deliver any forms or statements pursuant to this clause (B), but rather
shall be required to deliver forms pursuant to clause (A) of this
subsection ).
Each Non-U.S. Lender that delivers a statement in the form of Exhibit I (or such
other form of statement as shall have been requested by the Company) agrees that
it shall be the sole beneficial and record owner of Loans or Notes held by it.
Further, each Non-U.S. Lender agrees (i) to deliver to the Company and the
Administrative Agent, and if applicable, the assigning Lender (or, in the
case of a Participant, to the Lender from which the related participation shall
have been purchased) two further duly completed and signed copies of such Forms
1001, 4224, W-8 or W-9, as the case may be, or successor and related applicable
forms, on or before the date that any such form expires or becomes obsolete and
promptly after the occurrence of any event requiring a change from the most
recent form(s) previously delivered by it to the Company (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) in accordance with applicable U.S. laws and regulations, (ii) in the
case of a Non-U.S. Lender that delivers a statement in the form of Exhibit I (or
such other form of statement as shall have been requested by the Company), to
deliver to the Company and the Administrative Agent, and if applicable, the
assigning Lender, such statement on an annual basis on the anniversary of the
date on which such Non-U.S. Lender became a party to this Agreement and to
deliver promptly to the Company and the Administrative Agent, and if applicable,
the assigning Lender, such additional statements and forms as shall be
reasonably requested by the Company from time to time, and (iii) to notify
promptly the Company and the Administrative Agent (or, in the case of a
Participant, the Lender from which the related participation shall have been
purchased) if it is no longer able to deliver, or if it is required to withdrawn
or cancel, any form or statement previously delivered by it pursuant to this
subsection 4.18(e). Each Non-U.S. Lender agrees to indemnify and hold harmless
the Company from and against any taxes, penalties, interest or other costs or
losses (including, without limitation, reasonable attorneys' fees and expenses)
incurred or payable by the Company as a result of the failure of the Company to
comply with its obligations to deduct or withhold any U.S. Taxes from any
payments made pursuant to this Agreement to such Non-U.S. Lender or the
Administrative Agent which failure resulted from the Company's reliance on any
form, statement, certificate or other information provided to it by such Non-
U.S. Lender pursuant to clause (B) or clause (ii) of this subsection 4.18(e).
The Company hereby agrees that for so long as a Non-U.S. Lender complies with
this subsection 4.18 Company shall not withhold any amounts from any payments
made pursuant to this Agreement to such Non-U.S. Lender, unless the Company
reasonably determines that it is required by law to withhold or deduct any
amounts from any payments made to such Non-U.S. Lender shall not be required to
deliver any form or statement pursuant to the immediately preceding sentences in
this subsection 4.18(e) that such Non-U.S. Lender is not legally able to deliver
(it being understood and agreed that the Company shall withhold or deduct such
amounts from any payments made to such Non-U.S. Lender that the Company
reasonably determines are required by law). If any Credit Party other than the
Company makes any payment to any Non-U.S. Lender and such Credit Party as if
such Credit Party were the Company (but a Non-U.S. Lender shall not be required
to provide any form or make any statement to any such Credit Party unless such
Non-U.S. Lender has received a request to do so from such Credit Party and has a
reasonable time to comply with such request.
4.19 ILLEGALITY. Notwithstanding any other provisions herein, if any
Requirement of Law or any change therein or in the interpretation or application
thereof occurring after the date that any lender becomes a Lender party to this
Agreement, shall make it unlawful for such Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement, the commitment of such Lender hereunder
to make Eurodollar Loans or to convert all or a portion of ABR Loans into
Eurodollar Loans shall forthwith be cancelled and such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall, if required by law and if such
Lender so requests, be converted automatically to ABR Loans on the date
specified by such Lender in such request. To the extent that such affected
Eurodollar Loans are converted into ABR Loans, all payments of principal which
would otherwise be applied to such Eurodollar Loans shall be applied instead
to such Lender's ABR Loans. The Company hereby agrees promptly to pay any
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for any costs incurred by such Lender in making any conversion in
accordance with this subsection 4.19 including, but not limited to, any
interest or fees payable by such Lender to lenders of funds obtained by
it in order to make or maintain its Eurodollar Loans hereunder (such Lender's
notice of such costs, as certified to the Company through the Administrative
Agent, to be conclusive absent manifest error).
4.20 REQUIREMENTS OF LAW. (a) In the event that, at any time after
the date hereof, any Requirement of Law or any change therein or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority:
(i) does or shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any Eurodollar Loans
made by it, or change the basis of taxation of payments to such Lender of
principal, commitment fee, interest or any other amount payable hereunder
(except for changes in the rate of tax on the overall net income of such
Lender);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement 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 such Lender which are not otherwise included in
the determination of the Eurodollar Rate; or
(iii) does or shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender of
making, converting, renewing or maintaining advances or extensions of credit or
to reduce any amount receivable hereunder, in each case, in respect of its
Eurodollar Loans, then, in any such case, the Company shall promptly pay such
Lender, on demand, any additional amounts necessary to compensate such Lender
for such additional cost or reduced amount receivable which such Lender deems to
be material as determined by such Lender with respect to such Eurodollar Loans,
together with interest on each such amount from the date demanded until payment
in full thereof at a rate per annum equal to the ABR plus the Applicable Margin
for ABR Loans.
(b) In the event that at any time after the date hereof, any Change
in Law with respect to any Lender shall, in the opinion of such Lender, require
that any Commitment of such Lender be treated as an asset or otherwise be
included for purposes of calculating the appropriate amount of capital to be
maintained by such Lender or any corporation controlling such Lender, and such
Change in Law shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital, as the case may be, as a consequence of
such Lender's obligations hereunder to a level below that which such Lender or
such corporation, as the case may be, could have achieved but for such Change in
Law (taking into account such Lender's or such corporation's policies, as the
case may be, with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time following notice by such Lender
to the Company of such Change in Law as provided in paragraph (c) of this
subsection 4.20, within 15 days after demand by such Lender, the Company
shall pay to such Lender such additional amount or amounts as will compensate
such Lender or such corporation, as the case may be, for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection 4.20, it shall promptly notify the Company, through
the Administrative Agent, of the event by reason of which it has become so
entitled. If any Lender has notified the Company through the Administrative
Agent of any increased costs pursuant to paragraph (a) of this subsection 4.20,
the Company at any time thereafter may, upon at least two Working Days' notice
to the Administrative Agent (which shall promptly notify the Lenders thereof),
and subject to subsection 4.21, prepay (or convert into ABR Loans) all (but not
a part) of the Eurodollar Loans then outstanding. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of paragraph (a) of
this subsection 4.20 with respect to such Lender, it will, if requested by the
Company and to the extent permitted by law or by the relevant Governmental
Authority, endeavor in good faith to avoid or minimize the increase in costs or
reduction in payments resulting from such event (including, without limitation,
endeavoring to change its Eurodollar Lending Office); PROVIDED, HOWEVER, that
such avoidance or minimization can be made in such a manner that such Lender, in
its sole determination, suffers no economic, legal or regulatory disadvantage.
If any Lender has notified the Company, through the Administrative Agent, of any
increased costs pursuant to paragraph (b) of this subsection 4.20, the Company
at any time thereafter may, upon at least three Business Days' notice to the
Administrative Agent (which shall promptly notify the Lenders thereof), and
subject to subsection 4.21, reduce or terminate the Revolving Credit Commitments
in accordance with subsection 4.4.
(d) A certificate submitted by such Lender, through the
Administrative Agent, to the Company shall be conclusive in the absence of
manifest error. The covenants contained in this subsection 4.20 shall survive
the termination of this Agreement and payment of the outstanding Notes.
4.21 INDEMNITY. The Company agrees to indemnify each Lender and to
hold such Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Company in payment of the
principal amount of or interest on any Eurodollar Loans of such Lender,
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to make
or maintain its Eurodollar Loans hereunder, (b) default by the Company in making
a borrowing of Eurodollar Loans after the Company has given a notice in
accordance with subsection or in making a conversion of ABR Loans to Eurodollar
Loans after the Company has given notice in accordance with subsection 4.3, (c)
default by the Company in making any prepayment of Eurodollar Loans after the
Company has given a notice in accordance with subsections 4.5 and 4.6 or (d) a
payment or prepayment of a Eurodollar Loan or a Money Market Rate Loan or
conversion of any Eurodollar Loan into an ABR Loan, in either case on a day
which is not the last day of an Interest Period with respect thereto (or, with
respect to a Money Market Rate Loan, the maturity date thereof), including, but
not limited to, any such loss or expense arising from interest or fees payable
by such Lender to lenders of funds obtained by it in order to maintain its
Eurodollar Loans hereunder. This covenant shall survive termination of
this Agreement and payment of the outstanding Obligations.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
continue and make the Loans and to induce the Issuing Lenders to issue, and the
Participating Lenders to participate in, the Letters of Credit, the Company
hereby represents and warrants to each Lender and the Administrative Agent, on
and as of the Closing Date and on the date of each Loan made or Letter of Credit
issued thereafter, that:
5.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Credit Party and
its Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged, except to the extent that the failure to possess such
corporate power and authority and such legal right would not, in the aggregate,
have a Material Adverse Effect, (c) is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have
Material Adverse Effect and (d) is in compliance with all Requirements of Law
(including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, any so-called "Superfund" or "Superlien" law, or
any applicable federal, state, local or other statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing liability
or standards of conduct concerning, any Hazardous Materials), except to the
extent that the failure to comply therewith would not, in the aggregate, have a
Material Adverse Effect.
5.2 CORPORATE POWER; AUTHORIZATION. Each Credit Party has the
corporate power and authority and the legal right to make, deliver and perform
the Credit Documents to which it is a party and to pledge the Pledged Stock
pursuant to the Pledge Agreement to which it is a party, and the Company has the
corporate power and authority and legal right to borrow hereunder and to have
Letters of Credit issued for its account hereunder. Each Credit Party has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party, the pledge of the
Pledged Stock pursuant to the Pledge Agreement to which it is a party and, in
case of the Company, to authorize the borrowings hereunder and the issuance of
Letters of Credit for its account hereunder. No consent or authorization of, or
filing with, any Person (including, without limitation, any Governmental
Authority) is required in connection with the execution, delivery or performance
by any Credit Party, or the use of proceeds of the Loans on the Closing Date as
contemplated hereby, or the validity or enforceability against any Credit Party,
of any Credit Document, to the extent that it is a party thereto, or the pledge
of the Pledged Stock pursuant to the Pledge Agreements, or the guarantee of the
Obligations pursuant to the Guarantees.
5.3 ENFORCEABLE OBLIGATIONS. Each of the Credit Documents has been
duly executed and delivered on behalf of the Credit Party thereto and each of
such Credit Documents constitutes the legal, valid and binding obligation of
such Credit Party, enforceable against such Credit Party in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
5.4 NO LEGAL BAR. The performance of each Credit Document, the
pledge of the Pledged Stock pursuant to the Pledge Agreements, the guarantee of
the Obligations pursuant to the Guarantees, the use of the proceeds of the Loans
and of drawings under the Letters of Credit will not violate any Requirement of
Law or any Contractual Obligation applicable to or binding upon any Credit
Party, any of its Subsidiaries or any of its properties or assets, which
violations, individually or in the aggregate, would have a material adverse
effect on the ability of such Credit Party to perform its obligations under the
Credit Documents to the extent that it is a party thereto, or which would give
rise to any liability on the part of the Administrative Agent or any Lender, or
which would have a Material Adverse Effect, and will not result in the creation
or imposition of (or the obligation to create or impose) any Lien (other than
liens created pursuant to the Credit Documents) on any of its or their
respective properties or assets pursuant to any Requirement of Law applicable to
it or them, as the case may be, or any of its or their Contractual Obligations,
except for the Liens arising under the Pledge Agreements.
5.5 NO MATERIAL LITIGATION. No litigation or investigation known to
the Company through receipt of written notice or proceeding of or by any
Governmental Authority or any other Person is pending against any Credit Party
or any of its Subsidiaries, including, without limitation, the investigations,
actions, suits and proceedings described in Schedule 5.5, (a) with respect to
the validity, binding effect or enforceability of any Credit Document or with
respect to the Loans made hereunder, the use of proceeds thereof or of any
drawings under a Letter of Creditor and the other transactions contemplated
hereby or thereby, or (b) which would have a Material Adverse Effect.
5.6 FINANCIAL CONDITION. (a) The unaudited consolidated balance
sheet of Holdings as of June 30, 1996, a copy of which has heretofore been
furnished to each Lender, presents fairly, in all material respects, in
accordance with GAAP, the consolidated financial condition of Holdings as at
such date subject to normal year end audit adjustments and such balance sheet is
condensed and excludes detailed footnote disclosures. As of the date of such
balance sheet, except as disclosed in the Registration Statement, neither
Holdings nor any of its Subsidiaries had any material obligation, contingent or
otherwise, which was not reflected therein or in the notes thereto and which
would have a Material Adverse Effect.
(b) The audited consolidated balance sheet of Holdings and its
Subsidiaries at December 31, 1995, as restated, and the related consolidated
statements of operations, stockholders' equity and cash flows for the fiscal
year ended on such date, reported on by Deloitte & Touche LLP, copies of each of
which have heretofore been furnished to each Lender, present fairly in
accordance with GAAP in all material respects the consolidated financial
condition of Holdings and its Subsidiaries as at such date, and the consolidated
results of their operations and cash flows for the fiscal period then ended.
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the period involved (except as concurred in by the Accountants
(as defined below). Except as disclosed in the Registration Statement, neither
Holdings nor any of its Subsidiaries had, as of the date of such financial
statements, any material obligation, contingent or otherwise, which was not
reflected in the foregoing statements or in the notes thereto and which would
have a Material Adverse Effect.
(c) Except as set forth in the Registration Statement, since December
31, 1995, there have not been any events or states of fact which individually or
in the aggregate would have a Material Adverse Effect.
(d) Between December 31, 1995 and the Closing Date, except as
disclosed in Schedule 5.6(d), no dividends or other distributions have been
declared, paid or made upon any shares of capital stock of the Company nor have
any shares of capital stock of the Company been redeemed, retired, purchased or
otherwise acquired by the issuer thereof.
5.7 INVESTMENT COMPANY ACT. Neither any Credit Party nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended).
5.8 FEDERAL REGULATION. No part of the proceeds of any of the Loans
or any drawing under a Letter of Credit will be used for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation G,
T, U or X of the Board. Neither the Company nor any of its Subsidiaries is
engaged or will engage, principally or as one of its important activities, in
the business of extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under said Regulation U.
5.9 NO DEFAULT. Neither the Company nor any of its Subsidiaries is
in default in the payment or performance of any of its or their Contractual
Obligations in any respect which would have a Material Adverse Effect. Neither
the Company nor any of its Subsidiaries is in default under any order, award or
decree of any Governmental Authority or arbitrator binding upon or affecting it
or them or by which any of its or their properties or assets may be bound or
affected in any respect which would have a Material Adverse Effect and no such
order, award or decree would materially adversely affect the ability of the
Company and its Subsidiaries taken as a whole to carry on their businesses as
presently conducted or the ability of any Credit Party to perform its
obligations under any Credit Document to which it is a party.
5.10 NO BURDENSOME RESTRICTIONS. Neither the Company nor any of its
Subsidiaries is a party to or is bound by any Contractual Obligation or subject
to any Requirement of Law or other corporate restriction which would have a
Material Adverse Effect.
5.11 TAXES. Each of the Company and its Subsidiaries has filed or
caused to be filed or has timely requested an extension to file or has received
an approved extension to file all tax returns which, to the knowledge of the
Company, are required to have been filed, and has paid all taxes shown to be
due and payable on said returns or extension requests or on any assessments
made against it or any of its property and all other taxes, fees or other
charges imposed on it or any of its property by any Governmental Authority
(other than those the amount or validity of which is currently being contested
in good faith by appropriate proceedings and with respect to which reserves
in conformity with GAAP have been provided in the books of the Company or its
Subsidiaries, as the case may be), except any such filings or taxes, fees or
charges, the making of or the payment of which, or the failure to make or pay,
would not have a Material Adverse Effect, and, to the knowledge of the Company,
no claims are being asserted with respect to any such taxes, fees or other
charges (other than those the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided in the books of the
Company or its Subsidiaries, as the case may be), except as to any such
taxes, fees or other charges, the payment of which, or the failure to pay,
would not have a Material Adverse Effect.
5.12 SUBSIDIARIES. As of the Closing Date, the Subsidiaries of the
Company listed on Schedule 5.12A constitute all of the Domestic Subsidiaries of
the Company and the Subsidiaries listed on Schedule 5.12B constitute all of the
Foreign Subsidiaries of the Company.
5.13 OWNERSHIP OF PROPERTY; LIENS. Except as set forth in the
Registration Statement, the Company and each of its Subsidiaries has good and
marketable title to, or valid and subsisting leasehold interests in, all its
respective material real property, and good title to all its respective material
other property, and none of such property is subject, except as permitted
hereunder, to any Lien (including, without limitation and subject to subsection
8.2 hereof, Federal, state and other tax liens).
5.14 ERISA. No "prohibited transaction" (as defined in Section 406
of ERISA or Section 4975 of the Code) or "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or Reportable Event (other than a Reportable
Event with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred during the five years preceding each date on
which this representation is made or deemed made with respect to any Plan in any
case the consequences of which would have a Material Adverse Effect. Except as
disclosed in Schedule 5.14, the present value of all accrued benefits under each
Single Employer Plan maintained by the Company or a Commonly Controlled Entity
(based on those assumptions used to fund such Plan) did not, as of the most
recent annual valuation date in respect of each such Plan, exceed the fair
market value of the assets of the Plan (including for these purposes accrued but
unpaid contributions) allocable to such benefits by more than $2,000,000, and
the present value of all accrued benefits under all such Single Employer Plans
under which the present value of benefits exceeds the assets allocable thereto
did not, as of such valuation date, exceed the fair market value of all such
Plans (including for these purposes accrued but unpaid contributions) allocable
to such benefits by more than $15,000,000. The liability to which the Company
or any Commonly Controlled Entity would become subject under ERISA if the
Company or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
hereof would not have a Material Adverse Effect. No Multiemployer Plan is
either in Reorganization or Insolvent in any case the consequences of which
would have a Material Adverse Effect.
SECTION 6. CONDITIONS PRECEDENT
6.1 CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT, INITIAL LOANS AND
LETTERS OF CREDIT. The effectiveness of this Agreement, the obligation of each
Lender to make its Loans and the obligation of the Issuing Lender to issue any
Letter of Credit on the Closing Date are subject to the satisfaction, or waiver
by the Lenders (or, in the case of conditions specified 6.1(g), (i) or (p), by
the Administrative Agent) immediately prior to or concurrently with the
effectiveness of this Agreement, the making of such Loans or the issuance of
such Letter of Credit, as the case may be, of the following conditions
precedent:
(a) CREDIT AGREEMENT. The Administrative Agent shall have received
this Agreement, executed and delivered by a duly authorized officer of the
Company with a counterpart for each Lender.
(b) PLEDGE AGREEMENTS. The Administrative Agent shall have received
the Holdings Pledge Agreement and the Company Pledge Agreement, each
executed and delivered by a duly authorized officer of the Credit Party
party thereto, together with (i) (A) the Holdings Note, (B) the Subsidiary
Note and (C) all stock certificates representing all of the Pledged Stock
(as defined in such Pledge Agreement) and (ii) undated stock powers for
each certificate representing such Pledged Stock, and undated endorsements
to the Holdings Note and the Subsidiary Note, each duly executed in blank
and delivered by a duly authorized officer of such Credit Party, and in
each case accompanied by the acknowledgement and consent of each issuer of
such Pledged Stock or such note thereunder, as the case may be, in the form
annexed to each such Pledge Agreement.
(c) GUARANTEES. The Administrative Agent shall have received (i) the
Holdings Guarantee, executed and delivered by a duly authorized officer of
Holdings, and (ii) the Subsidiary Guarantee, executed and delivered by a
duly authorized officer of each Subsidiary Guarantor.
(d) CONSUMMATION OF THE IPO. The Administrative Agent shall have
received evidence satisfactory to it that the IPO shall have been
consummated with gross cash proceeds (net of underwriting discount) thereof
of not less than $75,000,000, and that any such proceeds not applied as
described in 6.1(e) or to any fees and expenses associated with the
Refinancing and the IPO, shall have been contributed to the Company.
(e) REPURCHASE OR REPAYMENT OF EXISTING HOLDINGS PREFERRED. The
Administrative Agent shall have received evidence satisfactory to it that
Holdings shall have effected the repurchase or repayment of all of the
existing Holdings Preferred in accordance with the terms thereof and shall
have paid all fees and expenses associated therewith and with the
transactions contemplated thereby.
(f) TERMINATION OF EXISTING CREDIT AGREEMENTS. The Administrative
Agent shall have received evidence satisfactory to it that all principal,
interest, fees, and other amounts owing or payable under the Existing
Credit Agreement shall have been paid in full, the Existing Credit
Agreements shall have been terminated and all Liens thereunder shall have
been terminated and released.
(g) LEGAL OPINIONS. The Administrative Agent shall have received
such legal opinions covering the transactions contemplated by this
Agreement as the Administrative Agent shall reasonably request, dated the
Closing Date and addressed to the Administrative Agent and the Lenders,
including, (i) an opinion of Fried, Frank, Harris, Shriver & Jacobson,
counsel to Holdings and the Company, substantially in the form of Exhibit
J-1 hereto with such changes thereto as may be approved by and otherwise in
form and substance satisfactory to the Administrative Agent and its counsel
and (ii) an opinion of General Counsel to the Company, substantially in the
form of Exhibit J-2 hereto with such changes thereto as may be approved by
and otherwise in form and substance satisfactory to the Administrative
Agent and its counsel. Such opinions shall also cover such other matters
incident to the transactions contemplated by this Agreement as the
Administrative Agent shall reasonably require.
(h) INSURANCE. The Administrative Agent shall have received (i) a
schedule describing all insurance maintained by the Company and its
Subsidiaries pursuant to subsection 7.5(b), which schedule shall set forth
for each insurance policy the scope of coverage, the policy limits and
deductibles, the insurer and the expiration date, (ii) binders (or other
customary evidence as to the obtaining and maintenance by the Company of
such insurance) for each policy set forth on such schedule insuring against
aviation and products liability risk and (iii) a written summary, in form
and substance satisfactory to the Administrative Agent, of all insurance
policies insuring against products liability risk which have been
maintained from time to time by the Company and its Subsidiaries during the
five years immediately preceding the Closing Date.
(i) SOLVENCY OPINION. The Administrative Agent shall have received
an opinion from Marshall & Stevens, Incorporated or, any other firm
acceptable to the Administrative Agent and the Company documenting the
solvency of Holdings and its Subsidiaries after giving effect to the
Refinancing, the IPO and the transactions related thereto.
(j) CLOSING CERTIFICATES. The Administrative Agent shall have
received a Closing Certificate of Holdings, the Company and each Subsidiary
Guarantor, dated the Closing Date, substantially in the form of Exhibits K-
1, K-2 and J-3 hereto, respectively, with appropriate insertions and
attachments, satisfactory in form and substance to the Administrative
Agent and its counsel, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of Holdings, the Company
and each Subsidiary Guarantor, respectively.
(k) FINANCIAL INFORMATION. The Administrative Agent shall have
received a copy of (i) the financial statements referred to in subsection
5.6(b) and such financial statements for the year ended December 31, 1994,
(ii) the financial statements referred to in subsection 5.6(a) and such
financial statements for each prior fiscal quarter of Holdings ended during
1996 and (iii) a pro forma balance sheet of the Company as at June 30,
1996, adjusted to give effect to the Refinancing, the Loans to be made on
the Closing Date and the use of proceeds thereof, in each case with a
photocopy thereof for each Lender.
(l) NO LEGAL CONSTRAINTS. Except as disclosed in the Registration
Statement, no litigation, inquiry, injunction or restraining order shall be
pending, entered or threatened (including any proposed statute, rule or
regulation) which is reasonably likely to have a Material Adverse Effect or
a material adverse effect on (i) the transactions described in subsections
6.1(d), (e) and (f) and the transactions related thereto, (ii) the ability
of the Credit Parties to perform their obligations under the Credit
Documents or (iii) the rights and remedies of the Administrative Agent and
the Lenders under the Credit Documents.
(m) ABSENCE OF OTHER DEVELOPMENTS. Except as disclosed in the
Registration Statement, there shall not have occurred any change, or
development or event involving a prospective change, which in either case
is reasonably likely to have a Material Adverse Effect or a material
adverse effect on the rights and remedies of the Administrative Agent and
the Lenders under the Credit Documents.
(n) EVENTS OF DEFAULT UNDER OTHER AGREEMENTS. No default or event of
default shall have occurred and be continuing under any capital stock or
material Indebtedness of Holdings, the Company or their Subsidiaries, or
would occur after giving effect to the transactions described in
subsections 6.1(d), (e) and (f) or otherwise contemplated hereby, except
any such defaults or events of default which (i) have previously been
waived or the obligation with respect to which such default or breach has
occurred has been or will be refinanced and extinguished on or prior to the
Closing Date or (ii) would otherwise not have a Material Adverse Effect.
(o) FEES. The Administrative Agent shall have received for the
account of the Lenders, or for its own account, as the case may be, all
fees and expenses payable to the Lenders and the Administrative Agent on or
prior to the Closing Date.
(p) RELATED AGREEMENTS. The Administrative Agent shall have received
each additional document, instrument or piece of information reasonably
requested by the Lenders, including, without limitation, a copy of any debt
instrument, security agreement or other material contract to which any
Credit Party or any of their Subsidiaries is a party.
(q) ADDITIONAL MATTERS. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Administrative Agent and its
counsel.
6.2 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT. The obligation of
each Lender to make any Loan (other than any Revolving Credit Loan the proceeds
of which are to be used to repay Refunded Swing Line Loans) and the obligation
of the Issuing Lender to issue any Letter of Credit is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) REPRESENTATIONS AND WARRANTIES. If such Loan is made (and/or
Letter of Credit issued) on the Closing Date, each of the representations
and warranties made in or pursuant to Section or which are contained in any
other Credit Document or in any certificate, document or financial or other
statement furnished by or on behalf of Holdings, the Company or any
Subsidiary thereof, at any time under or in connection herewith, shall be
true and correct in all material respects on and as of the Closing Date as
if made on and as of the Closing Date (unless stated to relate to a
specific earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier
date). If such Loan is made (and/or Letter of Credit issued) subsequent to
the Closing Date, each of the representations and warranties made in or
pursuant to Section or which are contained in any other Credit Document or
in any certificate, document or financial or other statement furnished by
or on behalf of Holdings, the Company or any Subsidiary thereof shall be
true and correct in all material respects on and as of the date of such
Loan (or Letter of Credit) as if made on and as of such date (unless stated
to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of
such earlier date).
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect
to the Loan to be made or the Letter of Credit to be issued on such
Borrowing Date.
Each borrowing by the Company hereunder and the issuance of each
Letter of Credit by the Issuing Lender hereunder shall constitute a
representation and warranty by the Company as of the date of such borrowing or
issuance that the conditions in clauses (a) and (b) of this subsection have
been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in
effect, any Loan, Note or Revolving L/C Obligation remains outstanding and
unpaid, any amount remains available to be drawn under any Letter of Credit
or any other amount is owing to any Lender or the Administrative Agent
hereunder, it shall, and, in the case of the agreements contained in
subsections , , , and cause each of its Subsidiaries to:
7.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent (with
sufficient copies for each Lender):
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of Holdings, a copy of the consolidated balance
sheet of Holdings and its consolidated Subsidiaries as at the end of such
year and the related consolidated statements of operations, stockholders'
equity and cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by Deloitte & Touche LLP or other
independent certified public accountants of nationally recognized standing
not unacceptable to the Required Lenders (the "ACCOUNTANTS"); PROVIDED that
if for any reason whatsoever the consolidated balance sheet of Holdings and
its consolidated Subsidiaries and the related consolidated statements of
operations, stockholders' equity and cash flows for any fiscal year would
be materially different from the consolidated balance sheet of the Company
and its consolidated Subsidiaries and the related consolidated statements
of operations, stockholders' equity and cash flows for such fiscal year,
then the Company shall also provide, as soon as available, but in any event
within 90 days after the end of each fiscal year of the Company, a copy of
the consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of operations, stockholders' equity and of cash flows for such
year, setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like qualification
or exception, or qualification arising out of the scope of the audit, by
the Accountants;
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of Holdings, the unaudited consolidated balance sheet of
Holdings and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of operations,
stockholders' equity and cash flows of Holdings and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments); PROVIDED that if for any reason whatsoever the unaudited
consolidated balance sheet of Holdings and its consolidated Subsidiaries
and the related unaudited consolidated statements of operations,
stockholders' equity and cash flows for such quarter would be materially
different from the unaudited consolidated balance sheet of the Company and
its consolidated Subsidiaries and the related unaudited consolidated
statements of operations, stockholders' equity and cash flows for such
quarter, then the Company shall also provide, as soon as available, but in
any event not later than 45 days after the end of each of the first three
quarterly periods of each fiscal year of the Company, the unaudited
consolidated balance sheet of the Company and its consolidated Subsidiaries
as at the end of such quarter and the related unaudited consolidated
statements of operations, stockholders' equity and cash flows of the
Company and its consolidated Subsidiaries for such quarter and the portion
of the fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (
subject to normal year-end audit adjustments);
(c) as soon as available, but in any event within 60 days after
the beginning of each fiscal year of Holdings to which such budget relates,
an annual operating budget, on a consolidated basis, for Holdings and its
Subsidiaries, as adopted by the Board of Directors of the Company;
all financial statements shall be prepared in reasonable detail (except that
interim statements may be condensed and may exclude detailed footnote disclosure
to the extent consistent with the rules and regulations of the Securities and
Exchange Commission relating to the presentation of financial information in
Quarterly Reports on Form 10-Q) in all material respects (subject, in the case
of interim statements, to normal year-end audit adjustments) and in accordance
with GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as concurred in by the Accountants or officer, as the case
may be, and disclosed therein and except that interim financial statements need
not be restated for changes in accounting principles which require retroactive
application, and operations which have been discontinued (as defined in
Accounting Principles Board Opinion No. 30) during the current year need not be
shown in interim financial statements as such either for the current period or
comparable prior period). In the event Holdings changes its accounting methods
because of changes in GAAP, or any change in GAAP occurs which increases or
diminishes the protection and coverage afforded to the Lenders under current
GAAP accounting methods, the Company or the Administrative Agent, as the case
may be, may request of the other parties to this Agreement an amendment of the
financial covenants contained in this Agreement to reflect such changes in GAAP
and to provide the Lenders with protection and coverage equivalent to that
existing prior to such changes in accounting methods or GAAP, and each of the
Company, the Administrative Agent and the Lenders agree to consider such request
in good faith.
7.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent (with sufficient copies for each Lender):
(a) concurrently with the delivery of the consolidated financial
statements referred to in subsection , a letter from the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary to express their opinion on such
financial statements no knowledge was obtained of any Default or Event of
Default, except as specified in such letter;
(b) concurrently with the delivery of the financial statements
referred to in subsections and (b), a certificate of the chief financial
officer of the Company (i) stating that, to the best of such officer's
knowledge, each of Holdings, the Company and their respective Subsidiaries
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement, the Notes and the
other Credit Documents to be observed, performed or satisfied by it, and
that such officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate, (ii) showing in detail as
of the end of the related fiscal period the figures and calculations
supporting such statement in respect of subsections (d) and (e)(ii),
8.3(c), 8.5(e), 8.7, 8.8, 8.9, 8.10 and 8.13, and (iii) showing in detail
as of the end of the related fiscal period the Interest Coverage Ratio and
the Leverage Ratio of Holdings and its Subsidiaries and the calculations
supporting such statement and stating the Applicable Margin and commitment
fee payable as a result of such ratios;
(c) promptly upon receipt thereof, copies of all final reports
submitted to Holdings and the Company by independent certified public
accountants in connection with each annual, interim or special audit of the
books of Holdings and the Company made by such accountants, including,
without limitation, any final report pertaining to the company's internal
control systems submitted by such accountants to management in connection
with their annual audit;
(d) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available generally by Holdings, the Company or any of their respective
Subsidiaries and all regular and periodic reports and all final
registration statements and final prospectuses, if any, filed by Holdings,
the Company or any of their respective Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any Governmental
Authority succeeding to any of its functions;
(e) concurrently with the delivery of the financial statements
referred to in subsections and (b), a management summary describing and
analyzing the performance of Holdings, the Company and their respective
Subsidiaries during the periods covered by such financial statements; and
(f) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
7.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all of
its obligations and liabilities of whatever nature (including, without
limitation, taxes), except (a) when the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books of the
Company or any of its Subsidiaries, as the case may be, (b) for delinquent
obligations which do not have a Material Adverse Effect and (c) for trade and
other accounts payable in the ordinary course of business in accordance with
customary trade terms and which are not overdue for a period of more than 90
days (or any longer period if longer payment terms are accepted in the ordinary
course of business) or, if overdue for more than 90 days (or such longer
period), as to which a dispute exists and adequate reserves in conformity with
GAAP have been established on the books of the Company and its Subsidiaries, as
the case may be.
7.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to
engage in business of the same general type as now conducted by it, and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except for rights,
privileges and franchises the loss of which would not in the aggregate have a
Material Adverse Effect, and except as otherwise permitted by subsections and ;
and comply with all applicable Requirements of Law except to the extent that the
failure to comply therewith would not, in the aggregate, have a Material Adverse
Effect.
7.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all property
useful and necessary in its business in good working order and condition
(ordinary wear and tear excepted); and
(b) Maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and with only such
deductibles as are usually maintained by, and against at least such risks (but
including, in any event, public liability and product liability insurance) as
are usually insured against in the same general area, by companies engaged in
the same or a similar business; and furnish to each Lender, (i) annually, a
schedule disclosing (in a manner substantially similar to that used in the
schedule provided pursuant to subsection 6.1(h)) all insurance against aviation
and products liability risk maintained by the Company and its Subsidiaries
pursuant to this subsection 7.5(b) or otherwise and (ii) upon written request of
any Lender, full information as to the insurance carried; PROVIDED that the
Company may implement programs of self insurance in the ordinary course of
business and in accordance with industry standards for a company of similar size
so long as reserves are maintained in accordance with GAAP for the liabilities
associated therewith.
7.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities
which permit financial statements to be prepared in conformity with GAAP and all
Requirements of Law; and permit representatives of any Lender upon reasonable
notice to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired upon reasonable notice during normal business hours, and
to discuss the business, operations, properties and financial and other
condition of the Company and its Subsidiaries with officers and employees
thereof and with their independent certified public accountants.
7.7 NOTICES. Promptly give notice to the Administrative Agent and
each Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any instrument or
other agreement, guarantee or collateral document of the Company or any of
its Subsidiaries which default or event of default has not been waived and
would have a Material Adverse Effect, or any other default or event of
default under any such instrument, agreement, guarantee or other collateral
document which, but for the proviso to clause (e) of Section , would have
constituted a Default or Event of Default under this Agreement, or (ii)
litigation, investigation or proceeding which may exist at any time
between Holdings, the Company or any of their respective Subsidiaries and
any Governmental Authority, or receipt of any notice of any environmental
claim or assessment against Holdings, the Company or any of their
respective Subsidiaries by any Governmental Authority, which in any such
case would have a Material Adverse Effect;
(c) of any litigation or proceeding affecting the Company or any of
its Subsidiaries (i) in which more than $5,000,000 of the amount claimed is
not covered by insurance or (ii) in which injunctive or similar relief is
sought which if obtained would have a Material Adverse Effect;
(d) of the following events, as soon as practicable after, and in any
event within 30 days after, the Company knows thereof: (i) the occurrence
of any Reportable Event with respect to any Single Employer Plan which
Reportable Event could have a Material Adverse Effect, or (ii) the
institution of proceedings or the taking of any other action by PBGC, the
Company or any Commonly Controlled Entity to terminate, withdraw from or
partially withdraw from any Plan and, with respect to a Multiemployer Plan,
the Reorganization or Insolvency of such Plan, in each of the foregoing
cases which could have a Material Adverse Effect, and in addition to such
notice, deliver to the Administrative Agent and each Lender whichever of
the following may be applicable: (A) a certificate of the chief financial
officer of the Company setting forth details as to such Reportable Event
and the action that the Company or such Commonly Controlled Entity proposes
to take with respect thereto, together with a copy of any notice of such
Reportable Event that may be required to be filed with PBGC, or (B) any
notice delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be terminated, as
the case may be;
(e) of a material adverse change known to the Company or any of its
Subsidiaries in the business, financial condition, assets or results of
operations of the Company and its Subsidiaries taken as a whole.
Each notice pursuant to this subsection 7.7 be accompanied by a statement of the
chief executive officer or the chief financial officer of the Company setting
forth details of the occurrence referred to therein and stating what action the
Company proposes to take with respect thereto.
7.8 ADDITIONAL SUBSIDIARY GUARANTORS; STOCK PLEDGE. (a) If, at any
time that the Leverage Ratio then in effect is not less than or equal to
1.5:1.0, any Subsidiary of the Company or Holdings (whether presently existing
or hereafter created or acquired) shall become a Material Subsidiary, the
Company or Holdings shall cause to be pledged 100% of the issued and outstanding
stock of such Material Subsidiary owned by it pursuant to a Pledge Agreement
substantially in the form of Exhibit D or H, as appropriate, each of which
Pledge Agreements shall be accompanied by such resolutions, incumbency
certificates and legal opinions as are reasonably requested by the
Administrative Agent and its counsel; PROVIDED that if (x) (i) such
Material Subsidiary is a Domestic Subsidiary of the Company or Holdings
more than 65% of the assets of which are securities of foreign Persons (such
determination to be made on the basis of fair market value) or (ii) such
Material Subsidiary is a Foreign Subsidiary of the Company or Holdings, only 65%
of the stock of such Material Subsidiary shall be required to be pledged
pursuant to this subsection , or (y) such Material Subsidiary is a Foreign
Subsidiary of the Company or Holdings which is owned by a Foreign Subsidiary of
the Company or Holdings, none of the stock of such Material Subsidiary shall be
required to be pledged pursuant to this Section 7.8(a).
(b) If any Subsidiary of the Company or Holdings (whether presently
existing or hereafter created or acquired) shall become a Material Subsidiary,
the Company or Holdings shall cause such Material Subsidiary to promptly
thereafter execute and deliver a Guarantee in favor of the Administrative Agent
in substantially the form of Exhibit G, each of which Guarantees shall be
accompanied by such resolutions, incumbency certificates and legal opinions as
are reasonably requested by the Administrative Agent and its counsel; PROVIDED
that no Guarantee shall be required to be delivered under this paragraph (b) by
a Foreign Subsidiary of the Company or Holdings or by a Material Subsidiary if
more than 65% of the assets of such Material Subsidiary are securities of
foreign Persons (such determination to be made on the basis of fair market
value).
(c) In the event that there shall be a Change in Law which eliminates
the adverse tax consequences to the Company, Holdings or any of their
Subsidiaries which would have resulted on the date hereof from (A) the pledge of
more than 65% of stock of any Foreign Subsidiary which is a Material Subsidiary
or any Domestic Subsidiary which is a Material Subsidiary more than 65% of the
assets of which are securities of foreign Persons (such determination to be made
on the basis of fair market value) or (B) the guarantee by a Foreign Subsidiary
which is a Material Subsidiary or such a Domestic Subsidiary which is a Material
Subsidiary of the Loans and the other obligations of the Company hereunder, the
Company shall promptly thereafter (i) if at such time the Leverage Ratio then in
effect is not less than or equal to 1.5:1.0, pledge and deliver, or shall cause
to be pledged and delivered, to the Administrative Agent such additional stock
as can be so pledged without any adverse tax consequences and (ii) cause any
such Foreign Subsidiary or Domestic Subsidiary which is a Material Subsidiary
and has not previously executed and delivered a Guarantee because of such
adverse tax consequences to deliver a Guarantee to the Administrative Agent to
the extent any such guarantee can be so executed and delivered without any
adverse tax consequences.
(d) In the event that at any time after the date hereof any
Subsidiary, the stock of which is then pledged to the Administrative Agent for
the benefit of the Lenders hereunder, shall undertake a recapitalization
involving the incurrence of debt or the issuance of equity, such debt or equity
shall be evidenced by securities and the Company shall promptly pledge, or cause
to be pledged, such securities to the Administrative Agent, for the ratable
benefit of the Lenders, upon terms and subject to conditions reasonably
satisfactory to the Administrative Agent and, until the Administrative Agent
possesses a perfected security interest in such securities, the Company shall
hold such securities in trust for the Administrative Agent; PROVIDED, HOWEVER,
that, except as set forth in clause (c) above, if, (x) (i) such Subsidiary is a
Domestic Subsidiary more than 65% of the assets of which are securities of
foreign companies (such determination to be made on the basis of fair market
value) or (ii) such Subsidiary is a Foreign Subsidiary, or (y) such Subsidiary
is a Foreign Subsidiary of the Company or Holdings that is owned by a
Foreign Subsidiary of the Company or Holdings the Company shall be required to
pledge only such portion of such securities so that, after giving effect
thereto, only 65% of the stock of such Subsidiary in the case of clause (x) or
no stock of a Subsidiary in the case of clause (y) is pledged to the
Administrative Agent, for the ratable benefit of the Lenders, under the relevant
Pledge Agreement. The Administrative Agent and the Lenders agree that,
simultaneously with any such recapitalization, the Administrative Agent shall
release securities of any Subsidiary then held by it and exchange such
securities for those issued in connection with such recapitalization.
SECTION 8. NEGATIVE COVENANTS
The Company hereby agrees that it shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly so long as the Commitments remain
in effect or any Loan, Note or Revolving L/C Obligation remains outstanding and
unpaid, any amount remains available to be drawn under any Letter of Credit or
any other amount is owing to any Lender or the Administrative Agent hereunder:
8.1 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness of the Company hereunder and in connection with the
Letters of Credit and this Agreement;
(b) Indebtedness outstanding on the date hereof and listed on
Schedule 8.1;
(c) Indebtedness in respect of Used Aircraft Inventory Financing in
an aggregate amount outstanding at any time, when added (without duplication) to
the aggregate amount of Contingent Obligations permitted under subsection 8.3(c)
outstanding at such time, not to exceed $60,000,000;
(d) Indebtedness of the Company and its Subsidiaries incurred for
industrial revenue bonds, for capitalized lease obligations and for the deferred
purchase price of newly acquired property of the Company and its Subsidiaries,
in an amount (based on the remaining balance of the obligations therefor on the
books of the Company and its Subsidiaries) which shall not exceed in the
aggregate at any one time outstanding $40,000,000;
(e) (i) Indebtedness of the Company to any Subsidiary Guarantor and
of any Subsidiary Guarantor to the Company or any other Subsidiary Guarantor and
(ii) additional Indebtedness of the Company or any Subsidiary Guarantor to any
Subsidiary that is not a Subsidiary Guarantor and of any Subsidiary that is not
a Subsidiary Guarantor to the Company or any Subsidiary Guarantor, in an
aggregate amount for this clause (ii) not to exceed an aggregate principal
amount of $10,000,000 outstanding at any time;
(f) Indebtedness to the extent arising from or constituted by foreign
currency exchange contracts permitted by subsection ;
(g) Indebtedness in the nature of unsecured standby letters of credit
(other than the Standby L/Cs) issued for the account of the Company or any
Domestic Subsidiary not to exceed an aggregate face amount of $50,000,000 at any
one time outstanding; and
(h) other Indebtedness of the Company or any of its Subsidiaries
incurred in the ordinary course of their respective businesses in an aggregate
principal amount not to exceed $3,000,000 outstanding at any time.
8.2 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets, income or profits, whether now owned
or hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges not
yet due or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Company or such Subsidiary, as the case may be, in accordance with
GAAP;
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business in
respect of obligations which are not yet due or which are being contested in
good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or such Subsidiary, as the
case may be, in accordance with GAAP;
(c) Liens in existence on the date hereof listed on Schedule 8.2,
PROVIDED that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby shall not
subsequently be increased;
(d) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(e) Liens or deposits to secure the performance of bids, tenders,
trade or government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(f) easements, right-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred, or leases or subleases
granted to others, in the ordinary course of business, which do not interfere
with or adversely affect in any material respect the ordinary conduct of the
business of the Company and its Subsidiaries taken as a whole;
(g) Liens in favor of the Lenders pursuant to the Credit Documents
and bankers' liens arising by operation of law;
(h) Liens on assets of corporations which become Subsidiaries of the
Company after the date hereof, PROVIDED that such Liens exist at the time such
corporations become Subsidiaries and are not created in anticipation thereof;
(i) Liens on documents of title and the property covered thereby
securing Indebtedness in respect of the Letters of Credit which are Commercial
L/Cs;
(j) Liens on property of the Financing Subsidiary created solely for
the purpose of securing Indebtedness permitted by subsection 8.1(c);
(k) Liens created solely for the purpose of securing Indebtedness
permitted by subsection 8.1(d), representing or incurred to finance, refinance
or refund the purchase price of property, PROVIDED that no such Lien shall
extend to or cover other property of the Company or such Subsidiary other than
the respective property so acquired, and the principal amount of Indebtedness
secured by any such Lien shall at no time exceed the original purchase price of
such property;
(l) Liens securing any Indebtedness permitted under subsection ,
PROVIDED that no such Lien shall encumber any Collateral (as defined in any
Pledge Agreement) under any of the Pledge Agreements;
(m) Liens securing any Indebtedness permitted under subsection
8.1(h), PROVIDED that no such Lien shall encumber any Collateral (as defined in
any Pledge Agreement) under any of the Pledge Agreements;
(n) additional Liens, PROVIDED that (i) the maximum aggregate amount
of obligations secured thereby does not exceed $5,000,000 in the aggregate at
any time, and (ii) no such Lien shall encumber any Collateral (as defined in any
Pledge Agreement) under any of the Pledge Agreements.
8.3 LIMITATION ON CONTINGENT OBLIGATIONS. Create, incur, assume or
suffer to exist any Contingent Obligation except:
(a) Contingent Obligations in existence on the date hereof and listed
on Schedule 8.3;
(b) guarantees made in the ordinary course of business of the Company and
its Subsidiaries in connection with employee relocation, travel and
entertainment for an aggregate amount not to exceed $1,000,000 at any one time
outstanding;
(c) Contingent Obligations in respect of Indebtedness permitted under
subsection 8.1(c) in a maximum aggregate amount outstanding at any time, when
added (without duplication) to the aggregate amount of Indebtedness permitted
under subsection 8.1(c) outstanding at such time, not to exceed $60,000,000.
(d) Contingent Obligations to the extent arising from or constituted by
foreign currency exchange contracts permitted by subsection ;
(e) Contingent Obligations pursuant to the Subsidiary Guarantees; and
(f) (i) guarantees by the Company or any Subsidiary Guarantor of
Indebtedness permitted under subsection 8.1 or other obligations permitted
hereunder of the Company or any Subsidiary Guarantor and (ii) guarantees by the
Company or any Subsidiary Guarantor of Indebtedness permitted under subsection
8.1 or other obligations permitted hereunder of any Subsidiary that is not a
Subsidiary Guarantor permitted under subsection 8.1(e) subject to the
limitations set forth in subsection 8.6(g).
8.4 PROHIBITION OF FUNDAMENTAL CHANGES. Enter into any transaction
of acquisition of, or merger or consolidation or amalgamation with, any other
Person (including any Subsidiary or Affiliate of the Company or any of its
Subsidiaries), or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or make any material change in the present method
of conducting business or engage in any type of business other than of the same
general type now conducted by it, except for the transactions otherwise
permitted pursuant to subsections and .
8.5 PROHIBITION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, tax benefits, receivables and leasehold
interests), whether now owned or hereafter acquired except:
(a) the sale or other disposition of any tangible personal property
that, in the reasonable judgment of the Company, has become uneconomic, obsolete
or worn out, and which is disposed of in the ordinary course of business;
(b) sales or other dispositions of inventory in each case made in the
ordinary course of business (including all or any portion of the used aircraft
inventory of the Company and its Subsidiaries, other than in connection with the
Used Aircraft Inventory Financing);
(c) the sale, lease, transfer or other disposition of any or all of
its assets (upon voluntary liquidation or otherwise) to the Company or a wholly-
owned Subsidiary and any Subsidiary of the Company may sell or otherwise dispose
of, or part with control of any or all of, the stock of any Subsidiary to a
wholly-owned Subsidiary, PROVIDED that to the extent that any such transaction
would result in the transfer of any assets of, or any stock of, a Subsidiary
that is not a Subsidiary Guarantor, such transfer shall be limited as set forth
in subsection 8.6(g);
(d) asset sales in connection with the Used Aircraft Inventory
Financing; and
(e) for the sale or other disposition by the Company or any of its
Subsidiaries of other assets, PROVIDED that (i) such sale or other disposition
shall be made for fair value on an arm's-length basis, (ii) the aggregate fair
market value of all such assets sold or disposed of under this clause after
the Closing Date shall not exceed $10,000,000 in any fiscal year and
$20,000,000 in the aggregate, (iii) the Net Proceeds from such sale or other
disposition shall be applied in accordance with the provisions of subsection
4.6, and (iv) non-cash consideration therefor shall constitute investments
permitted under subsection 8.6(f).
8.6 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance,
loan, extension of credit or capital contribution to, or Contingent Obligation
for the benefit of, or purchase, stock, bonds, notes, debentures or other
securities of or any interest in, or make any other investment in, or acquire
assets other than in the ordinary course of business from, any Person, except:
(a) the Company may make loans or advances to, or investments in, any
Subsidiary Guarantor, and any Subsidiary Guarantor may make loans or advances
to, or investments in, the Company or any other Subsidiary Guarantor, to the
extent the Indebtedness created thereby is permitted by subsection 8.1(e)(i);
(b) the Company and its Subsidiaries may invest in, acquire and hold
Cash Equivalents;
(c) the Company or any of its Subsidiaries may make travel and
entertainment advances and relocation loans in the ordinary course of business
to officers and employees of the Company or any such Subsidiary, PROVIDED that
the aggregate principal amount of all such loans and advances outstanding at any
one time, together with the guarantees of such Loans and advances made pursuant
to subsection 8.3(b), shall not exceed $1,000,000;
(d) the Company or any of its Subsidiaries may make payroll advances
in the ordinary course of business;
(e) the Company or any of its Subsidiaries may acquire and hold
receivables and promissory notes owing to it, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms (PROVIDED that nothing in this subsection 8.6 shall
prevent the Company or any Subsidiary from offering such concessionary trade
terms, or from receiving such investments in connection with the bankruptcy or
reorganization of their respective suppliers or customers or the settlement of
disputes with such customers or suppliers arising in the ordinary course of
business, as management deems reasonable in the circumstances);
(f) the Company and its Subsidiaries may make investments
constituting non-cash consideration in connection with Asset Sales permitted by
subsection ; PROVIDED that (i) the amount of any such investment shall not
exceed 10% of the aggregate consideration to be received by the Company and its
Subsidiaries in respect of such Asset Sale and (ii) to the extent that the
amount of any such investment exceeds $20,000,000, the Company shall use its
best efforts to (x) cause each such investment to be made in such a form and on
such terms so that such investment can be pledged to the Administrative Agent,
for the benefit of the Lenders, and (y) pledge such investment to the
Administrative Agent, for the benefit of the Lenders, on terms reasonably
satisfactory to the Administrative Agent;
(g) the Company and its Subsidiaries may make loans or advances to,
incur Contingent Obligations for the benefit of, make acquisitions from or of,
and make investments in, other Persons, including, without limitation,
Indebtedness described in subsection 8.1(e)(ii) and Contingent Obligations
described in subsections 8.1(f); PROVIDED that the aggregate amount of the
consideration paid or invested and the amounts loaned, advanced or guaranteed by
the Company and its Subsidiaries in all such transactions after the Closing Date
(net, in the case of loans, advances or investments, of any repayments or return
of capital in respect thereof actually received in cash by the Company or such
Subsidiary (net of applicable taxes) after the Closing Date), when added to the
amount of any transfers or dispositions of assets described in the proviso to
subsection 8.5(c), does not exceed an aggregate amount of $10,000,000 in any
single transaction or series of related transactions or $20,000,000 in any
fiscal year of the Company; and
(h) the Company may make a loan to Holdings on the Closing Date in
connection with the Refinancing, evidenced by the Holdings Note and in an
aggregate principal amount not to exceed $100,000,000.
8.7 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make
Capital Expenditures, other than Capital Expenditures in any fiscal year of the
Company in the aggregate for the Company and its Subsidiaries not exceeding
$40,000,000 (the "BASE AMOUNT"); PROVIDED, HOWEVER, that the Base Amount for any
fiscal year may be increased by a maximum of $5,000,000 by carrying over to such
fiscal year any portion of the Base Amount not spent in the immediately
preceding fiscal year (but not in any year prior thereto).
8.8 MAINTENANCE OF INTEREST COVERAGE. Permit for any period of four
consecutive fiscal quarters ending during any period set forth below the
Interest Coverage Ratio for such period to be less than the ratio set forth
opposite such period below:
Period Ratio
------ -----
Closing Date 1.75:1.0
through
September 30, 1997
October 1, 1997 2.00:1.0
through
December 31, 1997
January 1, 1998 3.00:1.0
through
December 31, 1998
January 1, 1999 4.00:1.0
and at all
times thereafter
8.9 MAINTENANCE OF CURRENT RATIO. Permit the ratio of Consolidated
Current Assets to Consolidated Current Liabilities at any time to be less than
1.00 to 1.00.
8.10 MAINTENANCE OF LEVERAGE RATIO. Permit, as at the end of any
fiscal quarter of Holdings ending during any period set forth below, the
Leverage Ratio to be more than the ratio set forth opposite such period below:
PERIOD RATIO
Closing Date 5.0:1.0
through
June 30, 1997
July 1, 1997 4.0:1.0
through
September 30, 1997
October 1, 1997 3.5:1.0
through
December 31, 1997
January 1, 1998 3.0:1.0
through
December 31, 1998
January 1, 1999 2.5:1.0
and at all
times thereafter
8.11 LIMITATION ON RESTRICTED PAYMENTS. Except as contemplated in
connection with the Refinancing and paid on the Closing Date, declare any
dividends on any shares of any class of stock, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, retirement or other acquisition of any shares of any class of stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Company or any of its Subsidiaries, except that:
(a) Subsidiaries may pay dividends to the Company or to Domestic
Subsidiaries which are directly or indirectly wholly-owned by the Company;
(b) the Company may pay dividends to Holdings in an amount equal to
the amount required for Holdings to pay franchise taxes, fees and expenses
necessary to maintain its status as a public corporation and other fees required
to maintain its corporate existence (including fees and expenses in connection
with filings to be made by Holdings under federal and state securities laws);
(c) the Company may pay cash dividends to Holdings to the extent
necessary to enable Holdings to pay fees, expenses and other obligations
incurred or required in connection with the Refinancing, PROVIDED that Holdings
shall pay each obligation in respect of which such dividend is made no later
than fifteen Business Days after the date on which the relevant dividend is made
and, PROVIDED FURTHER, that the Company may pay a non-cash dividend to eliminate
the intercompany account between Holdings and the Company in an amount not to
exceed $2,000,000;
(d) the Company (i) may pay dividends to Holdings from time to time in
amounts equal to the amounts then required for Holdings to pay interest when due
on the Holdings Note, PROVIDED that within two days' after receipt by Holdings
of any such amount, Holdings applies such amount as payment to the Company of
such interest on the Holdings Note and (ii) may reduce or eliminate the Holdings
Note if such reduction or elimination is duly declared and made by the Company
as a non-cash dividend;
(e) so long as no Default or Event of Default has occurred or would
occur after giving effect to such declaration or payment, the Company may, from
time to time, declare and pay cash dividends to Holdings on the common stock of
the Company in an aggregate amount not to exceed $3,000,000 (the "HOLDINGS
DIVIDEND LIMIT"), PROVIDED that the proceeds of such dividends shall be used
within 30 days of the receipt of such dividends by Holdings to repurchase
Holdings stock from management employees of Holdings or any of its Subsidiaries
or to make payments in respect of outstanding stock appreciation rights granted
to management employees of Holdings or any of its Subsidiaries and, PROVIDED
FURTHER, the Holdings Dividend Limit shall be increased by the proceeds of any
additional Holdings stock which is issued to any management employees of
Holdings or any of its Subsidiaries after the Closing Date so long as such
proceeds are contributed by Holdings to the capital of the Company; and
(f) so long as no Default or Event of Default has occurred or would
occur after giving effect to such declaration or payment, the Company may, at
any time that (i) the Leverage Ratio in effect is equal to or less than 1.5:1.0
or (ii) the aggregate principal amount of Term Loans then outstanding is less
than $200,000,000, declare and pay cash dividends to Holdings on the common
stock of the Company, PROVIDED that the aggregate amount thereof paid in any
fiscal year of the Company does not exceed an amount equal to 25% of
Consolidated Net Income for such fiscal year.
8.12 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate except (a) for transactions
which are otherwise permitted under this Agreement and which are in the ordinary
course of the Company's or a Subsidiary's business and which are upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
would obtain in a hypothetical comparable arm's length transaction with a
Person not an Affiliate, (b) as permitted under subsections 8.1(e), 8.3(f)
and 8.6(a), or (c) as disclosed in the Registration Statement.
8.13 FOREIGN EXCHANGE CONTRACTS. Enter into any foreign currency
exchange contracts (other than foreign currency exchange contracts entered into
for the sole purpose of hedging with respect to the purchase or sale by the
Company or its Subsidiaries of inventory to be purchased or sold for payments in
foreign currencies in the ordinary course of their respective businesses)
pursuant to which the Company or its Subsidiaries may incur (i) obligations in
connection with the contracts described on Schedule 8.13 and (ii) additional
obligations in an amount not to exceed the dollar equivalent of $15,000,000 in
the aggregate at any time outstanding.
8.14 FISCAL YEAR. Permit the fiscal year of the Company to end on a
day other than December 31, unless the Company shall have given at least 45 days
prior written notice to the Administrative Agent.
SECTION 9. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) The Company shall fail to (i) pay any principal of any Note when
due in accordance with the terms hereof or thereof or to reimburse the
Issuing Lender in accordance with subsection 3.6 or (ii) pay any interest
on any Note or any other amount payable hereunder within five days after
any such interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Credit
Party in any Credit Document or which is contained in any certificate,
guarantee, document or financial or other statement furnished under or in
connection with this Agreement shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Company shall default in the observance or performance of any
agreement contained in subsection or Section of this Agreement or any
Credit Party shall default in the observance or performance of any
agreement contained in Section 5 of the Pledge Agreement to which it is a
party or Section 2 of the Guarantee to which it is a party; or Holdings
shall default in the performance or observance of Section 11 of the
Holdings Guarantee; or
(d) The Company or any other Credit Party shall default in the
observance or performance of any other agreement contained in any Credit
Document, and such default shall continue unremedied for a period of 30
days; or
(e) The Company or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Notes, the Revolving L/C Obligations and any intercompany debt) or in the
payment of any Contingent Obligation, beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness or
Contingent Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Contingent Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity, any applicable
grace period having expired, or such Contingent Obligation to become
payable, any applicable grace period having expired, PROVIDED that the
aggregate principal amount of all such Indebtedness and Contingent
Obligations which would then become due or payable would equal or exceed
$10,000,000; or
(f) (i) Holdings, the Company or any of their respective Subsidiaries
shall commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its assets, or Holdings, the Company or any
of their respective Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against
Holdings, the Company or any of their respective Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
Holdings, the Company or any of their respective Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) Holdings, the Company
or any of their respective Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
Holdings, the Company or any of their respective Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan,
(iii) a Reportable Event (other than a Reportable Event with respect to
which the 30-day notice requirement under Section 4043 of ERISA has been
waived) shall occur with respect to, or proceedings to have a trustee
appointed shall commence with respect to, or a trustee shall be appointed
to administer or to terminate, any Single Employer Plan, which Reportable
Event or institution of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, and, in the
case of a Reportable Event, such Reportable Event shall continue unremedied
for ten days after notice of such Reportable Event pursuant to Section
4043(a), (c) or (d) of ERISA is given and, in the case of the institution
of proceedings, such proceedings shall continue for ten days after
commencement thereof or (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA; and in each case in clauses (i) through (iv)
above, such event or condition, together with all other such events or
conditions relating to such Plans, if any, could subject the Company or any
of its Subsidiaries to any tax, penalty or other liabilities which in the
aggregate would have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $10,000,000 or more and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within the time required by the terms of such
judgment; or
(i) Any Pledge Agreement or any Guarantee shall cease, for any
reason, to be in full force and effect or any Credit Party shall so assert
in writing, or any Pledge Agreement shall cease to be effective to grant a
perfected Lien on the collateral described therein with the priority
purported to be created thereby (other than as a result of any action or
inaction on the part of the Administrative Agent or the Lenders); or
(j) (i) Holdings shall cease to own 100% of the issued and
outstanding capital stock of the Company, free and clear of all Liens
(other than the Lien granted to the Administrative Agent, for the ratable
benefit of the Lenders, pursuant to the terms of the Holdings Pledge
Agreement), (ii) until such time as the aggregate outstanding principal
amount of Term Loans has been reduced to $200 million or less or the
Leverage Ratio is 1.5 to 1.0 or less, the FL Group shall own beneficially
less than 25% of the outstanding voting stock of the Company, (iii) at
any time that the FL Group owns beneficially less than a majority, but
more than 25% of the outstanding voting stock of the Company, the
occurrence of any event as a result of which event, any person or group
(other than the FL Group) acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission
promulgated under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT")) of a percentage of the outstanding voting stock of the
Company or Holdings greater than that percentage owned beneficially by the
FL Group, (iv) at a time that the FL Group beneficially owns less than 25%
of the outstanding voting stock of the Company, the occurrence of any
event, as a result of which event, any person or group (other than the
FL Group) acquires beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission promulgated under the Exchange
Act) of 25% or more of the outstanding voting stock of the Company or
Holdings or (v) any person or group of persons (other than the FL Group)
at any time has the right to designate or elect a majority of the board
of directors of the Company or Holdings);
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above, automatically (i) the Commitments
shall immediately terminate and the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes shall
immediately become due and payable, and (ii) all obligations of the Company in
respect of the Letters of Credit, although contingent and unmatured, shall
become immediately due and payable and the Issuing Lenders' obligations to issue
Letters of Credit shall immediately terminate and (b) if such event is any other
Event of Default, so long as any such Event of Default shall be continuing,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Company,
declare the Commitments and any Lender's obligations to issue Letters of Credit
to be terminated forthwith, whereupon the Commitments and such obligations shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice of default to the Company, (A) declare all
or a portion of the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable, and (B)
declare all or a portion of the obligations of the Company in respect of the
Letters of Credit, although contingent and unmatured, to be due and payable
forthwith, whereupon the same shall immediately become due and payable and/or
demand that the Company discharge any or all of the obligations supported by the
Letters of Credit by paying or prepaying any amount due or to become due in
respect of such obligations. All payments under this Section on account of
undrawn Letters of Credit shall be made by the Company directly to a cash
collateral account established by the Administrative Agent for such purpose for
application to the Company's reimbursement obligations under subsection 3.6 as
drafts are presented under the Letters of Credit, with the balance, if any, to
be applied to the Company's obligations under this Agreement and the Notes as
the Administrative Agent shall determine with the approval of the Required
Lenders. Except as expressly provided above in this Section , presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT; ISSUING LENDER
10.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints Chase as the Administrative Agent under this Agreement and irrevocably
authorizes Chase as Administrative Agent for such Lender to take such action on
its behalf under the provisions of the Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of the Credit Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into the Credit Documents or otherwise exist against the Administrative Agent.
10.2 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement and each of the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Without limiting the
foregoing, the Administrative Agent may appoint Chase Bank Agency Services
Corporation as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Company and distribution of
funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care, except as otherwise provided in subsection .
10.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact, Affiliates
or Subsidiaries shall be (i) liable for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with the Credit Documents
(except for its or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Credit Party or any
officer thereof contained in the Credit Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, the Credit Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of the Credit Documents or for any failure of any Credit Party to perform its
obligations thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, any Credit
Document, or to inspect the properties, books or records of any Credit Party.
10.4 RELIANCE BY THE ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Credit Document unless it shall
first receive such advice or concurrence of the Required Lenders (or, where
unanimous consent of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or
in refraining from acting, under any Credit Document in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
10.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall promptly give notice thereof to the Lenders. The Administrative
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; PROVIDED that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Administrative Agent hereafter taken, including any review of
the affairs of the Credit Parties, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Credit Parties and
made its own decision to make its Loans hereunder, issue and participate in the
Letters of Credit and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under the Credit
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Credit Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, financial condition, assets, liabilities, net assets,
properties, results of operations, value, prospects and other condition or
creditworthiness of the Credit Parties which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact, Affiliates or Subsidiaries.
10.7 INDEMNIFICATION. The Lenders severally agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Credit Parties and without limiting the obligation of the Credit Parties to
do so), ratably according to the respective amounts of their respective
Commitment Percentages in effect on the date on which indemnification is
sought, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising
out of the Credit Documents or any documents contemplated by or referred
to herein or the transactions contemplated hereby or any action taken or
omitted by the Administrative Agent under or in connection with any of
the foregoing; PROVIDED that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's gross negligence or willful misconduct. The agreements
contained in this subsection shall survive the payment of the Notes and all
other amounts payable hereunder.
10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITIES. Each of the
Administrative Agent and its respective Affiliates and Subsidiaries may make
loans to, accept deposits from and generally engage in any kind of business with
the Credit Parties as though the Administrative Agent were not the
Administrative Agent hereunder, as the case may be. With respect to its Loans
made or renewed by it, any Note issued to it and any Letter of Credit issued by
or participated in by it, the Administrative Agent shall have the same rights
and powers, duties and liabilities under the Credit Documents as any Lender and
may exercise the same as though it were not the Administrative Agent and the
terms "Lender" and "Lenders" shall include the Administrative Agent in its
individual capacity.
10.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under the Credit
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders which successor agent shall be approved by the
Company (which approval shall not be unreasonably withheld) whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent and the term "Administrative Agent" shall mean such
successor agent effective upon its appointment, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Notes. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent the provisions of this Section shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent under the Credit Documents.
SECTION 11. MISCELLANEOUS
11.1 AMENDMENTS AND WAIVERS. No Credit Document nor any terms
thereof may be amended, supplemented or modified except in accordance with the
provisions of this subsection . With the written consent of the Required
Lenders, the Administrative Agent and the respective Credit Parties may, from
time to time, enter into written amendments, supplements or modifications to any
Credit Document for the purpose of adding any provisions to such Credit Document
to which they are parties or changing in any manner the rights of the Lenders or
of any such Credit Party or any other Person thereunder or waiving, on such
terms and conditions as the Administrative Agent may specify in such instrument,
any of the requirements of any such Credit Document or any Default or Event of
Default and its consequences; PROVIDED, HOWEVER, that:
(a) no such waiver and no such amendment, supplement or modification
shall directly or indirectly release any Guarantor from all or
substantially all of its obligations under the Guarantee to which it is a
party, without the written consent of the Release Lenders, except as
otherwise provided, PROVIDED that no vote or consent of the Administrative
Agent or any Lender shall be required to release automatically the
Collateral under any Pledge Agreement in accordance with the terms thereof
at any time that the Leverage Ratio is 1.5:1.0 or less;
(b) no such waiver and no such amendment, supplement or modification
shall extend the scheduled maturity of any Note or scheduled installment of
any Loan or extend the expiry date of any Letter of Credit beyond the
Revolving Credit Termination Date, or reduce the rate or extend the time of
payment of interest thereon, or change the method of calculating interest
thereon, or reduce any fee payable to the Lenders hereunder, or reduce the
principal amount thereof, or extend the due date thereof, or increase the
amount of any Lender's Commitments, or extend the expiry date of any
Lender's Commitments, or amend, modify or waive any provision of this
subsection or reduce the percentages specified in the definition of
Required Lenders or Release Lenders, or change the percentage of the
Lenders required to waive a condition precedent under Section 6.2 or
consent to the assignment or transfer by any Credit Party of any of its
rights and obligations under any Credit Document, in each case, without the
written consent of each Lender;
(c) no such waiver and no such amendment, supplement or modification
shall amend, modify or waive any provision of this Agreement directly
affecting the rights or obligations of the Swing Line Lender or the Issuing
Lender without the written consent of the Swing Line Lender or the Issuing
Lender, as the case may be; and
(c) no such waiver and no such amendment, supplement or modification
shall amend, modify or waive any provision of Section without the written
consent of the Administrative Agent.
Any such waiver and any such amendment, supplement or modification described in
this subsection shall apply equally to each of the Lenders and shall be binding
upon each Credit Party, the Lenders, the Administrative Agent and all future
holders of the Notes. No waiver, amendment, supplement or modification of any
Letter of Credit shall extend the expiry date thereof without the written
consent of the Participating Lenders. In the case of any waiver, the Company,
the Lenders and the Administrative Agent shall be restored to their former
position and rights hereunder and under the outstanding Notes, and any Default
or Event of Default waived shall be deemed to be cured and not continuing; but
no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
11.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy or telex), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, or three
Business Days after being deposited in the mail, postage prepaid, or, in
the case of telecopy notice, when sent, confirmation of receipt received,
or, in the case of telex notice, when sent, answerback received, addressed
as follows in the case of each Credit Party and the Administrative Agent,
and as set forth in Schedule 1.1A in the case of any Lender, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the Notes:
The Company: Gulfstream Delaware Corporation
500 Gulfstream Road
Savannah, Georgia 31402-2206
Attention: Chris A. Davis
Telecopy: (912) 965-3000
With a copy to: Forstmann Little & Co.
767 Fifth Avenue
44th Floor
New York, New York 10153
Attention: Sandra J. Horbach
Telex: 497 23385LCO
Telecopy: (212) 759-9059
With a copy to: Fried, Frank, Harris,
Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Robert C. Schwenkel, Esq.
Telex: 128173
Telecopy: (212) 747-1525 or
(212) 269-2644
The Administrative
Agent: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: William Caggiano
Telecopy: (212) 972-0009
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsections 3.3, 3.7, , 4.3, 4.4, 4.5 and 4.6 shall
not be effective until received and PROVIDED FURTHER that the failure to provide
the copies of notices to the Company provided for in this subsection shall not
result in any liability to the Administrative Agent or any Lender.
11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Letters of Credit and the Notes.
11.5 PAYMENT OF EXPENSES AND TAXES. The Company agrees:
(a) to pay or reimburse the Administrative Agent for all of its out-
of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification
to, the Credit Documents and any other documents prepared in connection
herewith, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent;
(b) to pay or reimburse each Lender and the Administrative Agent for
all their costs and expenses incurred in connection with, and to pay,
indemnify, and hold the Administrative Agent and each Lender harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever arising out of or in connection with, the
enforcement or preservation of any rights under any Credit Document and any
such other documents, including, without limitation, reasonable fees and
disbursements of counsel to the Administrative Agent and each Lender
incurred in connection with the foregoing and in connection with advising
the Administrative Agent with respect to its rights and responsibilities
under this Agreement and the documentation relating thereto;
(c) to pay, indemnify, and to hold the Administrative Agent and each
Lender harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes (other than withholding taxes), if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, any Credit Document and any such
other documents; and
(d) to pay, indemnify, and hold the Administrative Agent and each
Lender and their respective officers, directors, employees and agents
harmless from and against any and all other liabilities, obligations,
losses, damages (including punitive damages), penalties, fines, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, without limitation, reasonable experts' and
consultants' fees and reasonable fees and disbursements of counsel and
third party claims for personal injury or real or personal property damage)
which may be incurred by or asserted against the Administrative Agent or
the Lenders (x) arising out of or in connection with any investigation,
litigation or proceeding related to this Agreement, the other Credit
Documents, the proceeds of the Loans, or any of the other transactions
contemplated hereby, whether or not the Administrative Agent or any of the
Lenders is a party thereto, (y) with respect to any environmental matters,
any actual or alleged environmental compliance expenses and any actual or
alleged remediation expenses in connection with the presence, suspected
presence, release or suspected release of any Hazardous Materials in or
into the air, soil, groundwater, surface water or improvements at, on,
about, under, or within the Properties, or any portion thereof, or
elsewhere in connection with the transportation of Hazardous Materials to
or from the Properties or (z) without limiting the generality of the
foregoing, by reason of or in connection with the execution and delivery or
transfer of, or payment or failure to make payments under, Letters of
Credit (it being agreed that nothing in this subsection is intended to
limit the Company's obligations pursuant to subsection 3.6);
(all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"), PROVIDED that
the Company shall have no obligation hereunder with respect to indemnified
liabilities of the Administrative Agent or any Lender or any of their respective
officers, directors, employees or agents arising from (i) the gross negligence
or willful misconduct of such Administrative Agent or Lender or their respective
directors, officers, employees or agents, (ii) legal proceedings commenced
against the Administrative Agent or any Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such or (iii) legal proceedings
commenced against the Administrative Agent or any such Lender by any Transferee
(as defined in subsection ). The agreements in this subsection shall survive
repayment of the Notes and all other amounts payable hereunder.
11.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS. (a)
This Agreement shall be binding upon and inure to the benefit of the Company,
the Lenders and the Administrative Agent, all future holders of the Notes, and
their respective successors and assigns, except that the Company may not assign
or transfer any of its 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
or lending business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("PARTICIPANTS") participating interests in
any Loan owing to such Lender, any participating interest of such Lender in the
Letters of Credit, any Note held by such Lender, any Commitment of such Lender
or any other interest of such Lender hereunder and under the other Credit
Documents. 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 to 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 other
Credit Documents and the Company and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Credit Documents.
The Company agrees that if amounts outstanding under this Agreement and the
Notes are due and unpaid, or shall have been declared or shall have become due
and payable upon the occurrence of an Event of Default, each Participant shall
be deemed to have the right of setoff in respect of its participating interest
in amounts owing under this Agreement and any Note to the same extent as if
the amount of its participating interest were owing directly to it as a Lender
under this Agreement or any Note; PROVIDED that such Participant shall only
be entitled to such right of setoff if it shall have agreed in the agreement
pursuant to which it shall have acquired its participating interest to share
with the Lenders the proceeds thereof, as provided in subsection . The
Company also agrees that each Participant shall be entitled to the benefits
of subsections 4.12, 4.19, 4.20 and 4.21 with respect to its participation in
the Letters of Credit and in the Commitments and the Loans outstanding
from time to time; PROVIDED that no Participant shall be entitled to receive
any greater amount pursuant to such subsections 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.
(c) Any Lender may, in the ordinary course of its commercial banking
or lending business and in accordance with applicable law, at any time, sell to
any Lender or any Affiliate thereof (including any Affiliate or Subsidiary of
such transferor Lender) or, with the consent of the Company and the
Administrative Agent (which in each case shall not be unreasonably withheld),
sell to one or more additional banks or financial institutions (an "ASSIGNEE"),
all or any part of its rights and obligations under this Agreement, the Notes
and the other Credit Documents and with respect to the Letters of Credit,
pursuant to an Assignment and Acceptance executed by such Assignee, such
assigning Lender and by the Company and the Administrative Agent, and delivered
to the Administrative Agent for its acceptance and recording in the Register (as
defined below); PROVIDED that, unless the Company and the Administrative Agent
agree otherwise, (A) each such sale pursuant to this subsection of less than
all of a Lender's rights and Obligations (I) to a Person which is not then a
Lender or an Affiliate of a Lender shall be of Commitments and/or Loans of
$10,000,000 or more and (II) to a Person which is then a Lender or an Affiliate
of a Lender may be in any amount, (B) in the event of a sale of less than all of
such rights and obligations, such Lender after such sale shall retain
Commitments and/or Loans (without duplication) aggregating at least $10,000,000
and (C) each Assignee which is a Non-U.S. Lender shall comply with the
provisions of clause (A) of subsection 4.18(e) hereof, or, with the prior
written consent of the Company which may be withheld in its sole discretion,
with or without cause, the provisions of clause (B) of subsection 4.18(e) hereof
(and, in either case, with all of the other provisions of subsection 4.18(e)
hereof); and PROVIDED FURTHER that the foregoing shall not prohibit a Lender
from selling participating interests in accordance with subsection in all or
any portion of its Commitments and/or Loans (without duplication). Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with the Commitments as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent of the interest transferred, as reflected in
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto). Such
Assignment and Acceptance shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Assignee and the resulting adjustment of Commitment Percentages arising from
the purchase by such Assignee of all or a portion of the rights and
obligations of such assigning Lender under this Agreement and the Notes.
As soon as practicable after the effective date determined pursuant to such
Assignment and Acceptance, the Company, at its own expense, shall execute and
deliver to the Administrative Agent, in exchange for the surrendered Notes,
new Notes to the order of such Assignee in amounts equal to the respective
Commitments assumed by it pursuant to such Assignment and Acceptance and,
if the assigning Lender has retained Commitments hereunder, new Notes to
the order of the assigning Lender in an amount equal to the Commitments
retained by it hereunder. Such new Notes shall be dated the Closing Date and
shall otherwise be in the form of the Notes replaced thereby. The Notes
surrendered by the assigning Lender shall be returned by the Administrative
Agent to the Company marked "cancelled".
(d) The Administrative Agent shall maintain at its address referred
to in subsection a copy of each Assignment and Acceptance delivered to it and a
register (the "REGISTER") for the recordation of the names and addresses of the
Lenders and the registered owners of the Notes and the Commitments of, the
principal amount of any Term Loans, Swing Line Loans and/or Revolving Credit
Loans owing to, and, if such Lender has any Revolving Credit Commitment, the L/C
Participating Interests of, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the Company,
the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loans, the Notes or L/C
Participating Interests recorded therein for all purposes of this Agreement.
The Register shall be available for inspection by the Company 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 executed by an
assigning Lender, an Assignee and by the Company and the Administrative Agent,
together with payment to the Administrative Agent of a registration and
processing fee of $4,000, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto, record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Company.
(f) The Company authorizes each Lender to disclose to any Participant
or Assignee (each, a "TRANSFEREE") and any prospective Transferee any and all
financial information in such Lender's possession concerning Holdings, the
Company and their respective Subsidiaries and Affiliates which has been
delivered to such Lender by or on behalf of the Company pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Company in connection with such Lender's credit evaluation of Holdings, the
Company and their respective Subsidiaries and Affiliates prior to becoming a
party to this Agreement.
(g) If, pursuant to this subsection , any interest in this Agreement
or any Note or Letter of Credit is transferred to any Transferee which would be
a Non-U.S. Lender upon effectiveness of such transfer the assigning Lender shall
cause such Transferee, concurrently with the effectiveness of such transfer, (i)
to represent to the assigning Lender (for the benefit of the assigning Lender,
the Administrative Agent and the Company) that under applicable law and
treaties no taxes will be required to be withheld by the Administrative Agent,
the Company or the assigning Lender with respect to any payments to be made to
such Transferee in respect of the Loans or L/C Participating Interests, (ii) to
furnish to the assigning Lender (and, in the case of any Assignee registered
in the Register, the Administrative Agent and the Company) such Internal
Revenue Service Forms required to be furnished pursuant to subsection 4.18(e)
and (ii) to agree (for the benefit of the assigning Lender, the Administrative
Agent and the Company) to be bound by the provisions of subsection 4.18(e).
(h) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law; provided that any transfer of Loans or Notes
upon lieu of, enforcement of or the exercise of remedies under any such pledge
shall be treated as an assignment thereof which shall not be made without
compliance with the requirements of this subsection 11.6.
11.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of any of its Term
Loans, Revolving Credit Loans (other than payment of Swing Line Loans) or L/C
Participating Interests, as the case may be, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in clause (f) of
Section , or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of such other
Lender's Term Loans, Revolving Credit Loans or L/C Participating Interests, as
the case may be, or interest thereon, such benefitted Lender shall purchase for
cash from the other Lenders such portion of each such other Lender's Term Loans,
Revolving Credit Loans or L/C Participating Interests, as the case may be, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; PROVIDED, HOWEVER, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The Company agrees that
each Lender so purchasing a portion of another Lender's Loans and/or L/C
Participating Interests 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. The Administrative Agent shall
promptly give the Company notice of any set-off, PROVIDED that the failure to
give such notice shall not affect the validity of such set-off.
(b) Upon the occurrence of an Event of Default specified in
subsection 9(a) or 9(f), the Administrative Agent and each Lender are hereby
irrevocably authorized at any time and from time to time without notice to the
Company, any such notice being hereby waived by the Company, to set off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Administrative Agent or such Lender to or for the credit or the account of the
Company, or any part thereof in such amounts as the Administrative Agent or
such Lender may elect, on account of the liabilities of the Company hereunder
and under the other Credit Documents and claims of every nature and
description of the Administrative Agent or such Lender against the
Company, in any currency, whether arising hereunder, under any other Credit
Document or otherwise, as the Administrative Agent or such Lender may elect,
whether or not the Administrative Agent or such Lender has made any demand
for payment and although such liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify the Company
promptly of any such setoff made by it and the application made by it of the
proceeds thereof, PROVIDED that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of the
Administrative Agent and each Lender under this paragraph are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which the Administrative Agent or such Lender may have.
11.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Administrative Agent. This Agreement
shall become effective with respect to the Company, the Administrative Agent and
the Lenders when the Administrative Agent shall have received copies of this
Agreement executed by the Company and the Lenders, or, in the case of any
Lender, shall have received telephonic confirmation from such Lender stating
that such Lender has executed counterparts of this Agreement or the signature
pages hereto and sent the same to the Administrative Agent.
11.9 INTEGRATION. This Agreement and the other Credit Documents
represent the entire agreement of the Credit Parties, the Administrative Agent
and the Lenders with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to the subject matter hereof or
thereof not expressly set forth or referred to herein or in the other Credit
Documents.
11.10 GOVERNING LAW; NO THIRD PARTY RIGHTS. THIS AGREEMENT AND THE
NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. THIS AGREEMENT IS SOLELY FOR THE BENEFIT OF
THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, AND, EXCEPT AS
SET FORTH IN SUBSECTION , NO OTHER PERSONS SHALL HAVE ANY RIGHT, BENEFIT,
PRIORITY OR INTEREST UNDER, OR BECAUSE OF THE EXISTENCE OF, THIS AGREEMENT.
11.11 SUBMISSION TO JURISDICTION; WAIVERS. (A) EACH PARTY TO THIS
AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT
SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO SUCH PARTY AT ITS ADDRESS SET FORTH IN SUBSection OR AT SUCH
OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED
PURSUANT THERETO; AND
(iv) AGREES THAT NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT
TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.
(b) EACH PARTY HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING REFERRED TO IN PARAGRAPH (a) ABOVE.
11.12 ACKNOWLEDGEMENTS. The Company hereby acknowledges that:
(a) none of the Administrative Agent or any Lender has any fiduciary
relationship to any Credit Party, and the relationship between the
Administrative Agent and the Lenders, on the one hand, and the Credit
Parties, on the other hand, is solely that of creditor and debtor; and
(b) no joint venture exists among the Lenders or among any Credit
Parties and the Lenders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
GULFSTREAM DELAWARE CORPORATION
By: /s/ Robert L. Williams
-------------------------
Title: Treasurer
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender
By: /s/ William Caggiano
-----------------------
Title: Managing Director
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender
By: /s/ William J. Caggiano
-----------------------
Name: William J. Caggiano
Title: Managing Director
BANK OF AMERICA ILLINOIS
By: /s/ Barry P. Dunn
-------------------------
Title: Vice President
BANK OF TOKYO - MITSUBISHI
TRUST COMPANY
By: /s/ [Illegible]
-------------------------
Name:
Title
CITIBANK, N.A.
By: /s/ Jerome [Illegible]
-------------------------
Name: Jerome [Illegible]
Title: Attorney-in-fact
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Robert H. Dial
-------------------------
Name: Robert H. Dial
Title: Vice President
MARINE MIDLAND BANK
By: /s/ William M. Holland
-------------------------
Name: William M. Holland
Title: Vice President
THE MITSUBISHI TRUST AND
BANKING CORPORATION
By: /s/ Hachiro Hosoda
-------------------------
Name: Hachiro Hosoda
Title: Senior Vice President
NATIONSBANK, N.A. (SOUTH)
By: /s/ Kathryn W. Robinson
-------------------------
Name: Kathryn W. Robinson
Title: Senior Vice President
THE NIPPON CREDIT BANK LTD.,
NEW YORK BRANCH
By: /s/ Barry S. Fein
-------------------------
Name: Barry S. Fein
Title: Assistant Vice President
SOCIETE GENERALE
By: /s/ Louis P. LaVille, III
-------------------------
Name: Louis P. LaVille, III
Title: Vice President
MARINE MIDLAND BANK
By: /s/ Louise Billero
-------------------------
Name: Louise Billero
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By: /s/ Lynn Oda
-------------------------
Name: Lynn Oda
Title: Senior Vice President
and Senior Manager
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Peter R. White
-------------------------
Name: Peter R. White
Title: Managing Director
THE BANK OF NEW YORK
By: /s/ David C. Siegel
-------------------------
Name: William M. Holland
Title: Assistant Vice President
DAI ICHI KANGYO BANK LTD.
By: /s/ Michael R. Wellington
-------------------------
Name: Michael R. Wellington
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Curtis Price
-------------------------
Name: Curtis Price
Title: As Agent
LTCB TRUST COMPANY
By: /s/ Mr. Satoru Otsubo
-------------------------
Name: Mr. Satoru Otsubo
Title: Executive Vice President
UNITED STATES NATIONAL BANK
OF OREGON
By: /s/ Stephen Mitchell
-------------------------
Name: Stephen Mitchelld
Title: Vice President
THE YASUDA TRUST AND
BANKING CO., LTD., NEW YORK BRANCH
By: /s/ Makoto Tagawa
-------------------------
Name: Makoto Tagawa
Title: Deputy General Manager
CREDITANSTALT CORPORATE FINANCE,
INC.
By: /s/ Gregory F. Mathis
-------------------------
Name: Gregory F. Mathis
Title: Vice President
By: /s/ Clifford L. Wells
-------------------------
Name: Clifford L. Wells
Title: Vice President
MERRILL LYNCH SENIOR
FLOATING RATE FUND, INC.
By: /s/ Gilles Marchand
-------------------------
Name: Gilles Marchand, CFA
Title: Authorized Signatory
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ Kathleen A. Zarn
-------------------------
Name: Kathleen A. Zarn
Title: Vice President
FORM OF REVOLVING CREDIT NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT
PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.
$___________ New York, New York
_________ __, 1996
FOR VALUE RECEIVED, the undersigned, GULFSTREAM DELAWARE CORPORATION,
a Delaware corporation (the "COMPANY"), hereby unconditionally promises to pay
to the order of ________________ (the "LENDER") on the Revolving Credit
Termination Date, as defined in the Credit Agreement referred to below, at the
office of The Chase Manhattan Bank, located at 270 Park Avenue, New York, New
York 10017, in lawful money of the United States of America and in immediately
available funds, the principal amount of the lesser of (a) ____________________
DOLLARS ($_________) and (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by the Lender to the undersigned pursuant to
subsection 3.1 of the Credit Agreement. The undersigned further agrees to pay
interest in like money at such office on the unpaid principal amount hereof and
unpaid interest hereon from time to time from the date hereof at the rates and
on the dates specified in subsection 4.7 of the Credit Agreement.
The holder of this Note is authorized to record on the schedule
annexed hereto and made a part hereof and on a continuation thereof, the
Borrowing Date, Type and amount of each Revolving Credit Loan made by the Lender
pursuant to subsection 3.1 of the Credit Agreement and the date and amount of
each payment or prepayment of principal hereof. In the absence of manifest
error, each such recordation shall constitute PRIMA FACIE evidence of the
accuracy of the information recorded, PROVIDED that the failure of the Lender to
make such recordation (or any error in such recordation) shall not affect the
obligations of the Company hereunder or under the Credit Agreement.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement, dated as of ______ __, 1996, among the Company, the Lender and
certain other lenders parties thereto and The Chase Manhattan Bank, as
Administrative Agent (as the same may from time to time be amended, modified or
supplemented, the "CREDIT AGREEMENT"), and is entitled to the benefits thereof,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
prepayment in whole or in part as provided therein. This Note is secured and
guaranteed as provided in the Credit Documents. Reference is hereby made to the
Credit Documents for a description of the assets in which a security interest
has been granted, the nature and extent of the security and the guarantees,
the terms and conditions upon which the security interests and each guarantee
were granted and the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
GULFSTREAM DELAWARE CORPORATION
By:
Name:
Title:
<TABLE>
<CAPTION>
Schedule A
TO REVOLVING CREDIT NOTE
LOANS AND REPAYMENTS OF LOANS
- -----------------------------------------------------------------------------------------------------------------------------------
Date Amount of Loans Type of Loan Amount of Principal of Loans Repaid Unpaid Principal Balance of Loans Notation Made By
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FORM OF SWING LINE NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
$_______________ New York, New York
_________ __, 1996
FOR VALUE RECEIVED, the undersigned, GULFSTREAM DELAWARE CORPORATION,
a Delaware corporation (the "COMPANY"), hereby unconditionally promises to pay
to the order of THE CHASE MANHATTAN BANK, (the "LENDER"), on the Revolving
Credit Termination Date, as defined in the Credit Agreement referred to below,
at the office of The Chase Manhattan Bank, located at 270 Park Avenue, New York,
New York 10017, in lawful money of the United States of America and in
immediately available funds, the principal amount of the lesser of (a) TWENTY
MILLION DOLLARS ($20,000,000), and (b) the aggregate unpaid principal amount of
all Swing Line Loans made by the Lender to the undersigned pursuant to
subsection 3.7 of the Credit Agreement. The undersigned further agrees to pay
interest in like money from time to time from the date hereof at the rates and
on the dates specified in subsection 4.7 of the Credit Agreement.
The Lender is authorized to record on the schedule annexed hereto and
made a part hereof and on a continuation thereof, the Borrowing Date, the amount
of each Swing Line Loan and the date and amount of each payment or prepayment of
principal hereof. In the absence of manifest error, each such recordation shall
constitute PRIMA FACIE evidence of the accuracy of the information recorded,
PROVIDED that the failure of the Lender to make such recordation (or any error
in such recordation) shall not affect the obligations of the Company hereunder
or under the Credit Agreement.
This Note is the Swing Line Note referred to in the Credit Agreement,
dated as of _____ __, 1996, among the Company, the Lender, the other lenders
parties thereto and The Chase Manhattan Bank, as Administrative Agent (as the
same may from time to time be amended, modified or supplemented, the "CREDIT
AGREEMENT"), and is entitled to the benefits thereof, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to prepayment in whole or
in part as provided therein. This Note is secured and guaranteed as provided in
the Credit Documents. Reference is hereby made to the Credit Documents for a
description of the assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
GULFSTREAM DELAWARE CORPORATION
By:
Name:
Title:
<TABLE>
<CAPTION>
Schedule A
TO SWING LINE NOTE
SWING LINE
LOANS AND PAYMENTS OF PRINCIPAL
- -----------------------------------------------------------------------------------------------------------------
Date Amount of Loans Amount of Principal Repaid Unpaid Principal Balance Notation Made By
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
FORM OF TERM NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
$_______________ New York, New York
_______ __, 1996
FOR VALUE RECEIVED, the undersigned, GULFSTREAM DELAWARE CORPORATION, a
Delaware corporation (the "BORROWER"), hereby unconditionally promises to pay to
the order of __________ (the "LENDER") or its registered assigns at the office
of The Chase Manhattan Bank, located at 270 Park Avenue, New York, New York
10017, in lawful money of the United States of America and in immediately
available funds, the principal amount of DOLLARS ($
), or, if less, the unpaid principal amount of the Term Loan of the Lender.
The principal amount of the Term Loan of the Lender shall be paid in the amounts
and on the dates specified in subsection 2.2 of the Credit Agreement. The
Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount hereof from time to time outstanding at the rates and on
the dates specified in subsection 4.7 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the Term
Loan extended by the Lender and the date and amount of each payment or
prepayment of principal with respect thereto, the date of each interest rate
conversion pursuant to subsection 4.3 of the Credit Agreement and the principal
amount with respect thereto and, in the case of Eurodollar Loans, the length of
each Interest Period and the Eurodollar Rate with respect thereto. In the
absence of manifest error, each such recordation shall constitute PRIMA facie
evidence of the accuracy of the information recorded, PROVIDED that the failure
of the Lender to make such recordation (or any error in such recordation) shall
not affect the obligations of the Company in respect of such Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit
Agreement, dated as of ________ __, 1996 among Gulfstream Delaware Corporation,
a Delaware corporation, the Borrower, the Lender, the other banks, financial
institutions and other entities from time to time parties thereto and The Chase
Manhattan Bank, as Administrative Agent (as the same may be amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is guaranteed as provided in the Credit Documents.
Reference is hereby made to the Credit Documents for a description of the nature
and extent of the guarantees, the terms and conditions upon which each
guarantee was granted and the rights of the holder of this Note in respect
thereof.
This Note and the Loans evidenced hereby may be transferred in whole or
in part only by registration of such transfer on the register maintained for
such purpose by or on behalf of the Company as provided in subsection 11.6(d) of
the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
GULFSTREAM DELAWARE CORPORATION
By: ____________________________
Name:___________________________
Title:
<TABLE>
<CAPTION>
Schedule A
TO REVOLVING CREDIT NOTE
LOANS AND REPAYMENTS OF LOANS
- -----------------------------------------------------------------------------------------------------------------------------------
Date Amount of Loans Type of Loan Amount of Principal of Loans Repaid Unpaid Principal Balance of Loans Notation Made By
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
HOLDINGS GUARANTEE
HOLDINGS GUARANTEE, dated as of October 16, 1996, made
by GULFSTREAM AEROSPACE CORPORATION (this "Guarantee"), a
Delaware corporation (the "Guarantor"), in favor of THE CHASE
MANHATTAN BANK, as Administrative Agent (in such capacity, the
"Administrative Agent") for the banks and other financial
institutions (the "Lenders") that are parties to the Credit
Agreement described below.
W I T N E S S E T H:
WHEREAS, GULFSTREAM DELAWARE CORPORATION, a Delaware
corporation (the "Company"), is party to the Credit Agreement,
dated as of the date hereof among the Company, the Lenders and
the Administrative Agent (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Credit Agreement
and the other Credit Documents, the Lenders have severally agreed
to make loans to, and the Issuing Bank has agreed to issue
certain letters of credit for the account of, the Company;
WHEREAS, it is a condition precedent to the obligation
of the Lenders to make their respective loans to, and the Issuing
Lenders to issue certain letters of credit for the account of,
the Company under the Credit Agreement that the Guarantor shall
have executed and delivered this Guarantee to the Administrative
Agent for the ratable benefit of the Lenders;
NOW THEREFORE, in consideration of the premises and to
induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to make Extensions of Credit, each Guarantor
hereby agrees with and for the benefit of the Administrative
Agent and the Lenders as follows:
1. Defined Terms. As used in this Guarantee, terms
defined in the Credit Agreement (unless otherwise defined herein)
are used herein as therein defined.
2. Guarantee. The Guarantor hereby unconditionally
and irrevocably guarantees to the Administrative Agent and the
Lenders and their respective successors, indorsees, transferees
and assigns, the prompt and complete payment by the Company when
due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations, and the Guarantor further agrees
to pay any and all expenses (including, without limitation, all
reasonable fees and disbursements of counsel) which may be paid
or incurred by the Administrative Agent or any Lender in
enforcing, or obtaining advice of counsel in respect of, any
rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or
collecting against, the Guarantor under this Guarantee. This
Guarantee constitutes a guarantee of payment when due and not of
collection, and the Guarantor specifically agrees that it shall
not be necessary or required that the Administrative Agent or any
Lender exercise any right, assert any claim or demand or enforce
any remedy whatsoever against the Company (or any other Person)
before or as a condition to the obligations of the Guarantor
hereunder.
No payment or payments made by the Company, any other
guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Company, any other
guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any
time or from time to time in reduction of or in payment of the
Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantor hereunder which
shall, notwithstanding any such payment or payments other than
payments made by the Guarantor in respect of the Obligations or
payments received or collected from the Guarantor in respect of
the Obligations, remain liable for the Obligations until the
Obligations are paid in full, no Letters of Credit are
outstanding and the Commitments are terminated.
The Guarantor agrees that whenever, at any time, or
from time to time, it shall make any payment to the
Administrative Agent or any Lender on account of its liability
hereunder, it will notify the Administrative Agent in writing
that such payment is made under this Guarantee for such purpose.
4. Right of Set-off. Upon the occurrence and during
the continuance of any Event of Default specified in the Credit
Agreement, the Guarantor hereby irrevocably authorizes each
Lender at any time and from time to time without notice to the
Guarantor, any such notice being expressly waived by the
Guarantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or
owing by such Lender to or for the credit or the account of the
Guarantor, or any part thereof, in such amounts as such Lender
may elect, against and on account of the obligations and
liabilities of the Guarantor to such Lender hereunder and claims
of every nature and description of such Lender against the
Guarantor, in any currency, whether arising hereunder, under the
Credit Agreement, the Notes, the Letters of Credit or otherwise
under any other Credit Document, as such Lender may elect,
whether or not the Administrative Agent or any Lender has made
any demand for payment and although such obligations, liabilities
and claims may be contingent or unmatured. Each Lender agrees to
notify the Guarantor promptly of any such set-off and the
application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off
and application. The rights of each Lender under this paragraph
are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
5. Subrogation, etc. Notwithstanding any payment or
payments made by the Guarantor hereunder, or any set-off or
application of funds of the Guarantor by any Lender, the
Guarantor shall not exercise any of the rights of the
Administrative Agent or any Lender which the Guarantor may
acquire by way of subrogation, by any payment made hereunder, by
reason of such set-off or application of funds or otherwise,
against the Company or any collateral security or guarantee or
right of set-off held by any Lender for the payment of the
Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from the Company or any other
guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Administrative Agent
and the Lenders by the Company on account of the Obligations are
paid in full, no Letters of Credit are outstanding and the
Commitments are terminated. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, any
Letter of Credit shall be outstanding or the Commitments shall
not have been terminated, such amount shall be held by the
Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by the Guarantor, be turned over to the
Administrative Agent in the exact form received by such Guarantor
(duly indorsed by the Guarantor to the Administrative Agent, if
required), to be applied against the Obligations, whether matured
or unmatured, in such order as required by the applicable Credit
Documents.
6. Amendments, etc. with respect to the Obligations;
Waiver of Rights. The Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against
the Guarantor and without notice to or further assent by the
Guarantor, any demand for payment of any of the Obligations made
by the Administrative Agent or any Lender may be rescinded by
such party and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any
part thereof, or any collateral security or guarantee therefor or
right of set-off with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Lender and the Credit Agreement, the
Notes, the other Credit Documents, any Letter of Credit and any
other collateral security document or other guarantee or document
in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent
and/or any Lender may deem advisable from time to time, and any
collateral security, guarantee or right of set-off at any time
held by the Administrative Agent or any Lender for the payment of
the Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Administrative Agent nor any Lender shall
have any obligation to protect, secure, perfect or insure any
Lien at any time held by it as security for the Obligations or
for this Guarantee or any property subject thereto.
7. Guarantee Absolute and Unconditional. The
Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or
proof of reliance by the Administrative Agent or any Lender upon
this Guarantee or acceptance of this Guarantee; the Obligations,
and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guarantee; and all dealings between
the Company or the Guarantor and the Administrative Agent or any
Lender shall likewise be conclusively presumed to have been had
or consummated in reliance upon this Guarantee. The Guarantor
waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Company or any of
the Guarantors with respect to the Obligations. The Guarantor
understands and agrees that this Guarantee shall be construed as
a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability
of the Credit Agreement, the Notes, the Letters of Credit, any of
the other Credit Documents, any of the Obligations or any other
collateral security therefor or guarantee or right of set-off
with respect thereto at any time or from time to time held by the
Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance)
which may at any time be available to or be asserted by the
Company against the Administrative Agent or any Lender, or (c)
any other circumstance whatsoever (with or without notice to or
knowledge of the Company or the Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge
of the Company for the Obligations, or of the Guarantor under
this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor,
the Administrative Agent and any Lender may, but shall be under
no obligation to, pursue such rights and remedies as it may have
against the Company or any other Person or against any collateral
security or guarantee for the Obligations or any right of set-off
with respect thereto, and any failure by the Administrative Agent
or any Lender to pursue such other rights or remedies or to
collect any payments from the Company or any such other Person or
to realize upon any such collateral security or guarantee or to
exercise any such right of set-off, or any release of the Company
or any such other Person or any such collateral security,
guarantee or right of set-off, shall not relieve such Guarantor
of any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Lender against
the Guarantor. This Guarantee shall remain in full force and
effect and be binding in accordance with and to the extent of its
terms upon the Guarantor and the successors and assigns thereof,
and shall inure to the benefit of the Administrative Agent and
the Lenders, and their respective successors, indorsees,
transferees and assigns, until all the Obligations and the
obligations of the Guarantor under this Guarantee shall have been
satisfied by payment in full, no Letter of Credit shall remain
outstanding and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the
Credit Agreement the Company may be free from any Obligations.
8. Reinstatement. This Guarantee shall continue to
be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the
Company or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Company or the Guarantor or
any substantial part of its property, or otherwise, all as though
such payments had not been made.
9. Payments. The Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent
without set-off or counterclaim in U.S. Dollars at the office of
the Administrative Agent located at 270 Park Avenue, New York,
New York 10017.
10. Representations and Warranties. The Guarantor
hereby represents and warrants that:
(a) the Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and authority
and the legal right to own and operate its property, to
lease the property it operates and to conduct the business
in which it is currently engaged, except to the extent that
the failure to possess such corporate or partnership power
and authority and such legal right would not, in the
aggregate, have a material adverse effect on the business,
financial condition, assets or results of operations of the
Guarantor and its Subsidiaries taken as a whole (a "Material
Adverse Effect");
(b) the Guarantor has the corporate power and
authority and the legal right to execute and deliver, and to
perform its obligations under, the Credit Documents to which
it is a party, and has taken all necessary corporate or
partnership action to authorize its execution, delivery and
performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and
binding obligations of the Guarantor enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(d) the execution, delivery and performance by the
Guarantor of this Guarantee will not violate any Requirement
of Law or any Contractual Obligation applicable to or
binding upon the Guarantor, which violations, individually
or in the aggregate, would have a material adverse effect on
the ability of the Guarantor to perform its obligations
hereunder or which would have a Material Adverse Effect (not
waived by the other parties hereto) and will not result in
or require the creation or imposition of any Lien on any of
the properties or assets of the Guarantor pursuant to any
Requirement of Law applicable to it or any Contractual
Obligation of the Guarantor (other than any Liens created
pursuant to the Credit Documents);
(e) no consent or authorization of, filing with, or
other act by or in respect of, any arbitrator or
Governmental Authority and no consent of any other Person
(including, without limitation, any stockholder or creditor
of the Guarantor) is required in connection with the
execution, delivery, performance, validity or enforceability
of this Guarantee; and
(f) no litigation or investigation known to the
Guarantor or proceeding of or by any Governmental Authority
or other Person is pending against the Guarantor (i) with
respect to any of this Guarantee (ii) which would have a
Material Adverse Effect.
The Guarantor agrees that the foregoing representations
and warranties shall be deemed to have been made by the Guarantor
on each Borrowing Date by the Company under the Credit Agreement
on and as of such Borrowing Date as though made hereunder on and
as of such Borrowing Date.
11. Covenants. The Guarantor hereby covenants and
agrees with the Administrative Agent and the Lenders that, from
and after the date hereof and until all amounts owing to the
Administrative Agent and the Lenders by the Company on account of
the Obligations are paid in full, no Letters of Credit are
outstanding and the Commitments are terminated, the Guarantor
shall not conduct, transact or otherwise engage in any business
or operations, incur, create, assume or suffer to exist any
Indebtedness, Contingent Obligations or other liabilities or
obligations or Liens, or own, lease, manage or otherwise operate
any properties or assets, other than (i) incident to the
ownership of the capital stock of the Company, and the exercise
of rights and performance of obligations in connection therewith,
(ii) the entry into, and exercise of rights and performance of
obligations in respect of this Guarantee and the Holdings Pledge
Agreement, (iii) the issuance of equity securities and unsecured
debt securities provided that the net proceeds of such issuance
are advanced (pursuant to instruments subordinated to the
Obligations in a manner satisfactory to the Administrative Agent)
to or contributed to the capital of, the Company, in each case
promptly after the issuance thereof, (iv) the making of loans to
the Company, (v) the conduct or direct or indirect ownership of
other businesses if such other businesses are related to the
business of the Company and such businesses are effectively
contributed to the Company within 90 days of its acquisition by
Parent, (vi) the issuance of guarantees of obligations of the
Company and its Subsidiaries otherwise permitted under the Credit
Agreement, (vii) the filing of registration statements, and
compliance with applicable reporting and other obligations, under
federal, state or other securities laws, (viii) the listing of
its equity securities and compliance with applicable reporting
and other obligations in connection therewith, (ix) the retention
of transfer agents, private placement agents, underwriters,
counsel, accountants and other advisors and consultants, (x) the
performance of obligations under in and compliance with its
certificate of incorporation and by-laws, or any applicable law,
ordinance, regulation, rule, order, judgment, decree or permit,
including, without limitation, as a result of or in connection
with the activities of the Company and its Subsidiaries, (xi) the
issuance of the Holdings Note to the Company and (xii) the
incurrence and payment of any taxes for which it may be liable.
12. Severability. Any provision of this Guarantee
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
13. Paragraph Headings. The paragraph headings used
in this Guarantee are for convenience of reference only and are
not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a
written instrument pursuant to paragraph 15 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any
Lender, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any
future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.
15. Integration; Waivers and Amendments; Successors
and Assigns; Governing Law. This Guarantee represents the
agreement of the Guarantor with respect to the subject matter
hereof and there are no promises or representations by the
Guarantor, the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein. None of the terms or
provisions of this Guarantee may be waived, amended or
supplemented or otherwise modified except by a written instrument
executed by the Guarantor and the Administrative Agent, provided
that any provision of this Guarantee may be waived by the
Administrative Agent and the Lenders in a letter or agreement
executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Guarantee shall
be binding upon the successors and assigns of the Guarantor and
shall inure to the benefit of the Administrative Agent and the
Lenders and their respective successors and assigns. THIS
GUARANTEE SHALL BE GOVERNED BY, AND BE CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
16. Notices. All notices, requests and demands to or
upon the Guarantor or the Administrative Agent or any Lender to
be effective shall be in writing or by telecopy or telex and,
unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or, in the
case of mail, three days after deposit in the postal system,
first class postage pre-paid, or, in the case of telecopy notice,
confirmation of receipt received, or, in the case of telex
notice, when sent, answerback received, addressed to a party at
the address provided for such party in subsection 11.2 of the
Credit Agreement or Schedule I hereto, as the case may be.
17. Counterparts. This Guarantee may be executed by
one or more of the parties hereto on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
18. SUBMISSION TO JURISDICTION; WAIVERS. (a) THE
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO ANY CREDIT DOCUMENT, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING MAY BE AFFECTED BY MAILING A COPY
THEREOF, BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO
SUCH GUARANTOR AT ITS ADDRESS SET FORTH ON SCHEDULE I HERETO
OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT
SHALL HAVE BEEN NOTIFIED PURSUANT TO SECTION 15 HEREOF;
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT
TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
JURISDICTION.
(b) EACH OF THE ADMINISTRATIVE AGENT, EACH LENDER AND THE
GUARANTOR HEREBY UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING REFERRED TO IN PARAGRAPH (a) ABOVE.
20. Authority of Administrative Agent. The Guarantor
acknowledges that the rights and responsibilities of the
Administrative Agent under this Guarantee with respect to any
action taken by the Administrative Agent or the exercise or non-
exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or
resulting or arising out of this Guarantee shall, as between the
Administrative Agent and the Lenders be governed by the Credit
Agreement and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the
Administrative Agent and the Guarantor, the Administrative Agent
shall be conclusively presumed to be acting as agent for the
Lenders with full and valid authority so to act or refrain from
acting, and neither the Guarantor, the Company nor any other
guarantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.
IN WITNESS WHEREOF, each of the undersigned has caused
this Guarantee to be duly executed and delivered by its duly
authorized officer as of the day and year first above written.
GULFSTREAM AEROSPACE CORPORATION
a Delaware Corporation
By: /s/ Robert L. Williams
------------------------------
Title: Treasurer
SCHEDULE I TO
HOLDINGS GUARANTEE
Address of Guarantor
Gulfstream Aerospace Corporation,
a Delaware corporation
Post Office: Air Courier:
P.O. Box 2206 500 Gulfstream Road
Savannah, Georgia 31402 Travis Field
Savannah, Georgia 31408
Telecopy: (912) 965-3175
HOLDINGS PLEDGE AGREEMENT
HOLDINGS PLEDGE AGREEMENT dated as of October 16, 1996
made by GULFSTREAM AEROSPACE CORPORATION, a Delaware corporation
(the "Pledgor"), in favor of THE CHASE MANHATTAN BANK ("Chase"),
as administrative agent (in such capacity, the "Administrative
Agent") for the lenders (the "Lenders") parties to the Credit
Agreement, dated as of October 16, 1996 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"),
among GULFSTREAM DELAWARE CORPORATION (the "Company"), the
Administrative Agent and the Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders
have severally agreed to make loans to, and the Issuing Lenders
have agreed to issue certain letters of credit for the account
of, the Company upon the terms and subject to the conditions set
forth therein;
WHEREAS, the Pledgor is the legal and beneficial owner
of the shares of Pledged Stock (as hereinafter defined) issued by
the Persons named under the caption "Issuer" on Schedules I and
II hereto;
WHEREAS, the Pledgor has executed and delivered the
Holdings Guarantee dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the
"Holdings Guarantee") pursuant to which, subject to the terms and
conditions thereof, the Pledgor has guaranteed to the
Administrative Agent and the Lenders the punctual payment and
performance of all amounts and other obligations owing by the
Issuer pursuant to the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation
of the Lenders to make their respective loans to, and the Issuing
Lenders to issue certain letters of credit for the account of,
the Company under the Credit Agreement that the Pledgor shall
have executed and delivered this Pledge Agreement to the
Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to
induce the Lenders to make their respective loans to, and the
Issuing Lenders to issue certain letters of credit for the
account of, the Company under the Credit Agreement, the Pledgor
hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein,
terms that are defined in the Credit Agreement and used herein
are so used as so defined; and the following terms which are
defined in the Uniform Commercial Code in effect in the State of
New York on the date hereof are used herein as so defined:
Accounts, Chattel Paper, General Intangibles and Instruments; and
the following terms shall have the following meanings:
"Code": the Uniform Commercial Code from time to time
in effect in the State of New York.
"Collateral": the collective reference to the Pledged
Stock and all Proceeds thereof.
"Guarantee Obligations": all indebtedness, obligations
and liabilities of such Pledgor under the Holdings Guarantee,
including, without limitation, all guarantee obligations in
respect of the unpaid principal of and interest on the Loans, all
obligations and liabilities of the Company with respect to the
Letters of Credit and all other Obligations of the Company to the
Administrative Agent and the Lenders, whether direct or indirect,
absolute or contingent, matured or unmatured, due or to become
due, or now existing or hereafter incurred under the Credit
Agreement and the other Credit Documents.
"Issuer": with respect to any Pledged Stock, the
Issuers from time to time listed on Schedules I and II hereto as
the issuer of such Pledged Stock.
"Pledge Agreement": this Pledge Agreement, as amended,
supplemented or otherwise modified from time to time.
"Pledged Stock": all of the shares of capital stock of
the Issuers listed on Schedules I and II hereto (but not more
than 65% of all shares of each class of capital stock of the
Issuers listed on Schedule II hereto) now owned or at any time
hereafter acquired by the Pledgor or in which the Pledgor now has
or may from time to time acquire any right, title or interest,
together with all stock certificates, options or rights of any
nature whatsoever that may be issued or granted by the Issuer
thereof to the Pledgor while this Pledge Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in
Section 9-306(1) of the Code on the date hereof and, in any
event, shall include, without limitation, all dividends or other
income from the Pledged Stock, and any and all collections on the
foregoing or distributions with respect to the foregoing.
2. Pledge; Grant of Security Interest. The Pledgor
hereby delivers to the Administrative Agent, for the ratable
benefit of the Lenders, all of the Pledgor's right, title and
interest in the Pledged Stock, and hereby transfers and grants to
the Administrative Agent, for the ratable benefit of the Lenders,
a first security interest in all of the Pledgor's right, title
and interest in all of the Collateral, as collateral security for
the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the
Guarantee Obligations.
3. Stock Powers. Concurrently with the delivery to
the Administrative Agent of each certificate representing one or
more shares of Pledged Stock, the Pledgor shall deliver an
undated stock power covering such certificate, duly executed in
blank by the Pledgor.
4. Representations and Warranties. The Pledgor
represents and warrants that:
(a) the shares of capital stock of each of the Issuers
listed on Schedules I and II hereto which are identified as
Pledged Stock on said Schedules I and II constitute (i) all of
the issued and outstanding shares of capital stock of the Issuers
listed on Schedule I hereto which are owned by the Pledgor; and
(ii) all of the issued and outstanding shares of capital stock of
the Issuers listed on Schedule II hereto which are owned by the
Pledgor (but not in excess of 65% of the issued and outstanding
shares of all classes of the capital stock of such Issuers).
(b) all the shares of Pledged Stock have been duly and
validly issued and are fully paid and nonassessable;
(c) the Pledgor is the record and beneficial owner of,
and has good title to, the Collateral, free of any and all Liens
or options in favor of, or claims of, any other Person, except
the Lien created by this Pledge Agreement; and
(d) upon delivery to the Administrative Agent of the
stock certificates evidencing the Pledged Stock, the Lien granted
pursuant to this Pledge Agreement will constitute a valid,
perfected first priority Lien on the Collateral (except, with
respect to Proceeds, only to the extent permitted by Section 9-
306 of the Code), enforceable as such against all creditors of
the Pledgor and any Persons purporting to purchase any Collateral
from the Pledgor except in each case as enforceability may be
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
(e) The Pledgor's chief executive office and chief
place of business, and the place where the Pledgor keeps its
records concerning the Collateral, is located at: 500 Gulfstream
Rd., Savannah, Georgia 31402-2206, or such other location as the
Pledgor shall inform the Administrative Agent in accordance with
subsection 6(e).
The Pledgor agrees that the foregoing representations
and warranties shall be deemed to have been made by it on each
Borrowing Date by the Pledgor under the Credit Agreement on and
as of such Borrowing Date as though made hereunder on and as of
such Borrowing Date.
5. Covenants. The Pledgor covenants and agrees with
the Administrative Agent and the Lenders, that, from and after
the date of this Pledge Agreement until the Guarantee Obligations
are paid in full, no Letters of Credit are outstanding and the
Commitments are terminated:
(a) If the Pledgor shall, as a result of its ownership
of the Collateral, become entitled to receive or shall receive
any stock certificate (including, without limitation, any
certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any
reorganization), promissory note or other instrument, option or
rights, whether in addition to, in substitution of, as a
conversion of, or in exchange for any of the Collateral, or
otherwise in respect thereof, the Pledgor shall accept the same
as the agent of the Administrative Agent and the Lenders, hold
the same in trust for the Administrative Agent and the Lenders
and deliver the same forthwith to the Administrative Agent in the
exact form received, duly endorsed by the Pledgor to the
Administrative Agent, if required, together with an undated stock
power or endorsement, as appropriate, covering such certificate,
note or instrument duly executed in blank by the Pledgor and
with, if the Administrative Agent so requests, signature
guarantees, to be held by the Administrative Agent, subject to
the terms hereof, as additional collateral security for the
Guarantee Obligations. Any sums paid upon or in respect of the
Collateral upon the liquidation or dissolution of any Issuer
shall be paid over to the Administrative Agent to be held by it
hereunder as additional collateral security for the Guarantee
Obligations, and, in case any distribution of capital shall be
made on or in respect of the Collateral or any property shall be
distributed upon or with respect to the Collateral pursuant to
the recapitalization or reclassification of the capital of such
Issuer or pursuant to the reorganization thereof, the property so
distributed shall be delivered to the Administrative Agent to be
held by it hereunder as additional collateral security for the
Guarantee Obligations. If any sums of money or property so paid
or distributed in respect of the Collateral shall be received by
the Pledgor, the Pledgor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or
property in trust for the Lenders, segregated from other funds of
the Pledgor, as additional collateral security for the Guarantee
Obligations.
(b) Without the prior written consent of the
Administrative Agent and except as permitted by, or not
prohibited under, the Credit Agreement, the Pledgor will not (i)
vote to enable, or take any other action to permit, any Issuer to
issue any stock, membership interests or other equity securities
of any nature or to issue any other securities convertible into
or granting the right to purchase or exchange for any stock or
other equity securities of any nature of such Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Collateral, or (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Collateral, or any
interest therein, except for the Lien provided for by this Pledge
Agreement. The Pledgor will defend the right, title and interest
of the Administrative Agent and the Lenders in and to the
Collateral against the claims and demands of all Persons
whomsoever.
(c) At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole
expense of the Pledgor, the Pledgor will promptly and duly
execute and deliver such further instruments and documents and
take such further actions as the Administrative Agent may
reasonably request for the purposes of obtaining or preserving
the full benefits of this Pledge Agreement and of the rights and
powers herein granted. If any amount payable under or in
connection with any of the Collateral shall be or become
evidenced by any promissory note, other Instrument or Chattel
Paper, such note, Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly endorsed
in a manner satisfactory to the Administrative Agent, to be held
as Collateral pursuant to this Pledge Agreement.
(d) The Pledgor agrees to pay, and to hold the
Administrative Agent and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other similar taxes
which may be payable or determined to be payable with respect to
any of the Collateral or in connection with any of the
transactions contemplated by this Pledge Agreement.
6. Cash Dividends; Voting Rights. (a) Unless an Event
of Default shall have occurred and be continuing and the
Administrative Agent shall (unless such Event of Default is an
Event of Default specified in subsection 9(f) of the Credit
Agreement, in which case no such notice need be given) have given
notice to the Pledgor of the Administrative Agent's intent to
exercise its rights pursuant to paragraph 8 below, the Pledgor
shall be (i) permitted to receive all cash dividends or
distributions to the extent permitted in the Credit Agreement in
respect of the Pledged Stock and (ii) permitted to exercise all
voting, corporate, limited liability company and other rights of
ownership with respect to the Pledged Stock, provided, however,
that no vote shall be cast or corporate right exercised or other
action taken which, in the Administrative Agent's reasonable
judgment, would impair the Collateral or which would be
inconsistent with or result in any violation of any provision of
the Credit Agreement or any of the other Credit Documents.
(b) If an Event of Default shall have occurred and be
continuing and the Administrative Agent shall (unless such Event
of Default is an Event of Default specified in subsection 9(f) of
the Credit Agreement, in which case no such notice need be given)
have given notice to the Pledgor of its intent to exercise its
rights pursuant to paragraph 8 below, (i) all dividends, interest
payments and other distributions (including cash) paid on or in
respect of the Pledged Stock shall be paid to and retained by the
Administrative Agent as Collateral hereunder (or if received by
the Pledgor, shall be held in trust by the Pledgor for the
benefit of the Administrative Agent and the Lenders and shall be
forthwith delivered by it), and (ii) all voting, corporate,
limited liability company and other rights pertaining to the
Pledged Stock, if any, shall be exercised by the Administrative
Agent.
7. Rights of the Lenders and the Administrative
Agent. (a) If an Event of Default shall occur and be continuing
and the Administrative Agent shall (unless such Event of Default
is an Event of Default specified in subsection 9(f) of the Credit
Agreement, in which case no such notice need be given) give
notice of its intent to exercise its rights hereunder to the
Pledgor, (i) the Administrative Agent shall have the right to
receive any and all cash dividends, distributions and payments or
other income paid in respect of the Collateral and make
application thereof to the Guarantee Obligations in such order as
the Administrative Agent may determine and (ii) all shares of the
Pledged Stock shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent
or its nominee may thereafter exercise (A) all voting, corporate,
member, creditor and other rights, powers and privileges
pertaining to such Collateral at any meeting of shareholders of
any Issuer and (B) any and all rights of conversion, exchange,
subscription and any other rights, privileges or options
pertaining to the Collateral as if it were the absolute owner
thereof (including, without limitation, the right to exchange at
its discretion any and all of the Collateral upon the merger,
consolidation, reorganization, recapitalization or other
fundamental change in the structure of any Issuer, or upon the
exercise by the Pledgor or the Administrative Agent of any right,
privilege or option pertaining to the Collateral, and in
connection therewith, the right to deposit and deliver any and
all of the Collateral with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and
conditions as it may determine), all without liability except to
account for property actually received by it and except for its
gross negligence or willful misconduct, but the Administrative
Agent shall have no duty to the Pledgor to exercise any such
right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing.
(b) The rights of the Administrative Agent and the
Lenders hereunder shall not be conditioned or contingent upon the
pursuit by the Administrative Agent or any Lender of any right or
remedy against any Issuer or the Pledgor or against any other
Person which may be or become liable in respect of all or any
part of the Guarantee Obligations or against any collateral
security therefor, guarantee therefor or right of set-off with
respect thereto. Neither the Administrative Agent nor any Lender
shall be liable for any failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing
so, nor shall the Administrative Agent be under any obligation to
sell or otherwise dispose of any Collateral upon the request of
the Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
(c) At any time that the Leverage Ratio then in effect
is less than or equal to 1.5:1.0, so long as no Default or Event
of Default has occurred and is continuing, upon the Borrower's
request (i) all Collateral shall automatically be released from
the Liens hereunder in respect thereof and (ii) the
Administrative Agent shall, as promptly as practicable after
receiving such notice, deliver to the Pledgor the Collateral in
its possession and take such other action, at the Borrower's
expense, which the Borrower shall reasonably request to evidence
the release of the Lien and security interest created hereunder
with respect to such Collateral.
8. Remedies. In the event that any portion of the
Obligations has been declared or becomes due and payable in
accordance with the terms of the Credit Agreement and such
Obligations have not been paid in full, the Administrative Agent,
on behalf of the Lenders, may exercise, in addition to all other
rights and remedies granted in this Pledge Agreement and in any
other instrument or agreement securing, evidencing or relating to
the Guarantee Obligations or Obligations, all rights and remedies
of a secured party under the Code. Without limiting the
generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required
by law referred to below) to or upon the Pledgor, any Issuer, or
any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith
sell, assign, give option or options to purchase or otherwise
dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market,
at any exchange or broker's board or office of the Administrative
Agent or any Lender or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption
of any credit risk. The Administrative Agent or any Lender shall
have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in the Pledgor, which right or
equity is hereby waived or released. The Administrative Agent
shall apply any Proceeds from time to time held by it and the net
proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred in respect
thereof or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights
of the Administrative Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements
of counsel to the Administrative Agent, to the payment in whole
or in part of the Guarantee Obligations, in such order as the
Administrative Agent may elect, and only after such application
and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the
Pledgor. To the extent permitted by applicable law, the Pledgor
waives all claims, damages and demands it may acquire against the
Administrative Agent or any Lender arising out of the lawful
exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other
disposition.
9. Registration Rights; Private Sales. (a) If the
Administrative Agent shall determine to exercise its right to
sell any or all of the Collateral pursuant to paragraph 9 hereof,
and if in the opinion of the Administrative Agent it is necessary
or advisable to have the Collateral, or that portion thereof to
be sold, registered under the provisions of the Securities Act of
1933, as amended (the "Securities Act"), the Pledgor will cause
each Issuer whose stock or note or membership interest, as the
case may be, is to be so registered to (i) execute and deliver,
and cause the directors and officers of such Issuer or the
Pledgor, as the case may be, to execute and deliver, all such
instruments and documents, and do or cause to be done all such
other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Collateral, or that
portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and
to remain effective for a period of one year from the date of the
first public offering of the Collateral or that portion thereof
to be sold, and (iii) make all amendments thereto and/or to the
related prospectus that, in the opinion of the Administrative
Agent are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations
of the Securities and Exchange Commission applicable thereto.
The Pledgor agrees to cause each Issuer to comply with the
provisions of the securities or "Blue Sky" laws of any and all
jurisdictions that the Administrative Agent shall designate and
to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited)
that will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) The Pledgor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the
Collateral by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise,
and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers that will be obliged
to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the
distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other
terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially
reasonable manner. The Administrative Agent shall be under no
obligation to delay a sale of any of the Collateral for the
period of time necessary to permit any Issuer to register such
securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree
to do so.
(c) The Pledgor further agrees to use its best efforts
to do or cause to be done all such other acts as may be necessary
to make such sale or sales of all or any portion of the
Collateral pursuant to this paragraph 9 valid and binding and in
compliance with any and all other applicable Requirements of Law.
The Pledgor further agrees that a breach of any of the covenants
contained in this paragraph 9 will cause irreparable injury to
the Administrative Agent and the Lenders, that the Administrative
Agent and the Lenders have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every
covenant contained in this paragraph 10 shall be specifically
enforceable against the Pledgor, and the Pledgor hereby waives
and agrees not to assert any defenses against an action for
specific performance of such covenants.
10. Limitation on Duties Regarding Collateral. The
Administrative Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall
be to deal with it in the same manner as the Administrative Agent
deals with similar securities and property for its own account.
Neither the Administrative Agent nor any Lender nor their
respective directors, officers, employees or agents shall be
liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so (except to the extent the
same constitutes gross negligence or willful misconduct) or shall
be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or otherwise.
11. Powers Coupled with an Interest. All
authorizations and agencies herein contained with respect to the
Collateral are irrevocable and powers coupled with an interest.
12. Severability. Any provision of this Pledge
Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
13. Paragragh Headings. The paragraph headings used
in this Pledge Agreement are for convenience of reference only
and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a
written instrument pursuant to paragraph 15 hereof) be deemed to
have waived any right or remedy hereunder. No failure to
exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender any right, power or privilege
hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Administrative Agent or such Lender
would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or
remedies provided by law.
15. Waivers and Amendments; Successors and Assigns;
Governing Law. None of the terms or provisions of this Pledge
Agreement may be amended, supplemented or otherwise modified
except by a written instrument executed by the Pledgor and the
Administrative Agent, provided that any provision of this Pledge
Agreement may be waived by the Administrative Agent in a letter
or agreement executed by the Administrative Agent or by telex or
facsimile transmission from the Administrative Agent. This
Pledge Agreement shall be binding upon the successors and assigns
of the Pledgor and shall inure to the benefit of the
Administrative Agent and the Lenders and their respective
successors and assigns. THIS PLEDGE AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
16. Notices. Notices by the Administrative Agent may
be given by mail, by telex or by facsimile transmission,
addressed or transmitted to the Issuers at their addresses or
transmission numbers set forth in Schedule III hereto and to the
Pledgor at the address or transmission number set forth in
subsection 11.2 of the Credit Agreement. Such notice shall be
effective (a) in the case of mail, three Business Days after
deposit in the postal system, first class postage pre-paid, and
(b) in the case of telex or facsimile notices, when sent,
answerback received, addressed. The Pledgor and the Issuers may
change their respective addresses and transmission numbers by
written notice to the Administrative Agent.
17. Irrevocable Authorization and Instruction to
Issuers. The Pledgor hereby authorizes and instructs the Issuers
to comply with any instruction received by it from the
Administrative Agent in writing that (a) states that an Event of
Default has occurred and is continuing and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any
other or further instructions from the Pledgor, and the Pledgor
agrees that the Issuers shall be fully protected in so
complying.
18. Authority of Administrative Agent. The Pledgor
acknowledges that the rights and responsibilities of the
Administrative Agent under this Pledge Agreement with respect to
any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Pledge Agreement
shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements
with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting
as agent for the Lenders with full and valid authority so to act
or refrain from acting, and neither the Pledgor nor the Issuers
shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.
IN WITNESS WHEREOF, the undersigned has caused this
Pledge Agreement to be duly executed and delivered as of the date
first above written.
GULFSTREAM AEROSPACE CORPORATION
a Delaware Corporation
/s/ Robert L. Williams
By:-----------------------------
Title: Treasurer
ACKNOWLEDGEMENT AND CONSENT
The undersigned Issuers referred to in the foregoing
Holdings Pledge Agreement hereby acknowledge receipt of a copy
thereof and agree to be bound thereby and to comply with the
terms thereof insofar as such terms are applicable to it. The
undersigned Issuers agree to notify the Administrative Agent
promptly in writing of the occurrence of any of the events
described in paragraph 5(a) of the Holdings Pledge Agreement.
The undersigned Issuers further agree that the terms of paragraph
9(c) of the Holdings Pledge Agreement shall apply to them,
mutatis mutandis, with respect to all actions that may be
required of them under or pursuant to or arising out of paragraph
9 of the Holdings Pledge Agreement.
GULFSTREAM DELAWARE CORPORATION
By: /s/ Robert L. Williams
------------------------------
Title: Treasurer
SCHEDULE I
To Holdings
Pledge Agreement
DESCRIPTION OF PLEDGED STOCK (DOMESTIC SUBSIDIARIES)
----------------------------------------------------
Stock
Pledgor Issuer Class of Stock Certificate No.
- --------------- -------------- -------------- ---------------
Gulfstream Gulfstream Common Stock 1
Aerospace Delaware
Corporation, a Corporation, a
Delaware Delaware
Corporation Corporation
No. of Shares
Owned by the Percentage of
Total No. of Pledgor & Outstanding
Outstanding Constituting Shares Owned by
Shares "Pledged Stock" Pledgor
- ---------------- --------------- ---------------
10 10 100%
SCHEDULE II
To Holdings
Pledge Agreement
DESCRIPTION OF PLEDGED STOCK (FOREIGN SUBSIDIARIES)
----------------------------------------------------
Stock
Pledgor Issuer Class of Stock Certificate No.
- --------------- -------------- -------------- ---------------
NONE NONE NONE NONE
No. of Shares
Owned by the Percentage of
Total No. of Pledgor & Outstanding
Outstanding Constituting Shares Owned by
Shares "Pledged Stock" Pledgor
- ---------------- --------------- ---------------
NONE NONE NONE
SCHEDULE III TO
HOLDINGS PLEDGE AGREEMENT
Addresses of Issuers
Gulfstream Delaware Corporation,
a Delaware corporation
500 Gulfstream Road
Travis Field
Savannah, Georgia 31408
Telecopy: (912) 965-3175
EXHIBIT 11.1
<TABLE>
GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
Computation of Pro Forma Earnings per Common Share
(In thousands, except per share data)
(Unaudited)
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------- ----------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Income $17,247 $2,118 $32,606 $9,957
======= ======= ======= ======
Pro forma, for Recapitalization,
average shares issued and
outstanding 65,403 65,403 65,403 65,403
Exercise of certain stock
options with the Offering 3,950 3,950 3,950 3,950
Incremental shares applicable to
stock options outstanding after
the exercise of certain stock
options with the Offering 4,623 4,623 4,623 4,623
Pro forma, shares issued
pursuant to the Offering 4,559 4,559 4,559 4,559
------- ------- ------- -------
Pro forma, for Recapitalization
and Offering, weighted average
number of common and common
equivalent shares 78,535 78,535 78,535 78,535
======= ======= ======= =======
Pro forma, for Recapitalization
and Offering, net income per
common and common equivalent
share $0.22 $0.03 $0.42 $0.13
======= ======= ======= =======
Note: Shares and stock options issued subsequent to September
30, 1995 are treated as outstanding for all reported periods.
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27.1
Financial Data Schedule
For Period Ended September 30, 1996
GULFSTREAM AEROSPACE CORPORATION AND SUBSIDIARIES
(Unaudited)
(In millions, except per share data)
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 264
<SECURITIES> 0
<RECEIVABLES> 148
<ALLOWANCES> 0
<INVENTORY> 598
<CURRENT-ASSETS> 1016
<PP&E> 124
<DEPRECIATION> 0
<TOTAL-ASSETS> 1288
<CURRENT-LIABILITIES> 848
<BONDS> 0
0
450
<COMMON> 1
<OTHER-SE> (317)
<TOTAL-LIABILITY-AND-EQUITY> 1288
<SALES> 743
<TOTAL-REVENUES> 754
<CGS> 577
<TOTAL-COSTS> 744
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1)
<INCOME-PRETAX> 33
<INCOME-TAX> 0
<INCOME-CONTINUING> 33
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
Amounts inapplicable or not disclosed as a separate line on the
Statement of Financial Position or Results of Operations are
reported as 0 herein.
* Notes and accounts receivable - trade are reported net of
allowances for doubtful accounts in the Consolidated Balance
Sheet.
** Property, plant and equipment are reported net of
accumulated depreciation in the Consolidated Balance Sheet.
</TABLE>
EXHIBIT 99.1
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF THE PRIVATE SECURITIES REFORM ACT OF 1995
- -----------------------------------------------------------------
Gulfstream Aerospace Corporation (the "Company" or
"Gulfstream") cautions readers that the important factors set
forth below, as well as factors discussed in other documents
filed by the Company with the Securities and Exchange Commission
(the "SEC"), among others, could cause the Company's actual
results to differ materially from statements contained in this
report, future filings by the Company with the SEC, the Company's
press releases and oral statements made by or on behalf of the
Company. The words "estimate", "project", "anticipate",
"expect", "intend", "believe", and similar expressions are
intended to identify forward looking statements.
GULFSTREAM V CERTIFICATION AND PRODUCTION
The Gulfstream V is a new aircraft product that is still in
the FAA certification process. Neither the Gulfstream V nor its
BMW Rolls Royce BR710 engines have yet been delivered to
customers. While the Company believes that the Gulfstream V is
currently on schedule to obtain FAA certification in the last
quarter of 1996, no assurance can be given that certification
will occur as scheduled or that changes in FAA policies or
procedures will not delay certification.
An extended delay in the FAA certification process may have
a near-term adverse effect on the Company's results of
operations. In addition, while the Company generally receives
non-refundable deposits in connection with each order, an order
may be cancelled (and the deposit returned) under certain
conditions if the delivery of the Gulfstream V is delayed more
than six months after a customer's scheduled delivery date. An
extended delay in the FAA certification process could cause an
increase in the number of cancellations of orders for Gulfstream
Vs, which could have an adverse effect on the Company's results
of operations.
In contrast to its historical practice of discontinuing
existing models, the Company will continue to manufacture and
sell Gulfstream IV-SPs at the same time that it manufactures and
sells Gulfstream Vs. The Company expects to increase its
aircraft production rate in 1997 as compared to its aircraft
production rate in 1996. No assurance can be given as to the
extent to which the Company can successfully increase its rate of
production.
THE BUSINESS JET AIRCRAFT MARKET
The Company's principal business is the design, development,
manufacture and marketing of large and ultra-long range business
jet aircraft. Because of the high unit selling price of its
aircraft products and the availability of commercial airlines and
charters as alternative means of business travel, a downturn in
general economic conditions could result in a reduction in the
orders received by the Company for its new and pre-owned
aircraft. The Company would not be able to rely on sales of
other products to offset a reduction in sales of its aircraft.
If a potential purchaser is experiencing a business downturn or
is otherwise seeking to limit its capital expenditures, the high
unit selling price of a new Gulfstream aircraft could result in
such potential purchaser deferring its purchase or changing its
operating requirements and electing to purchase a competitor's
lower priced aircraft. Since the Company relies on the sales of
a relatively small number of high unit selling price new aircraft
to provide approximately 55% to 65% of its revenues, small
decreases in the number of aircraft delivered in any year could
have a material adverse effect on the results of operation for
that year.
The Company believes that its reputation and the exemplary
safety record of its aircraft are important selling points for
new and pre-owned Gulfstream aircraft. However, if one or a
number of catastrophic events were to occur with the Gulfstream
fleet, Gulfstream's reputation and sales of Gulfstream aircraft
could be adversely affected.
In many cases, the Company has agreed to accept, at the
customer's option, the customer's pre-owned aircraft as a trade-
in in connection with the purchase of a Gulfstream V. Based on
the current market for pre-owned aircraft, the Company expects to
continue to be able to resell such pre-owned aircraft, and does
not expect to suffer a loss with respect to the possible trade-in
of such aircraft. However, an increased level of pre-owned
aircraft or changes in the market for pre-owned aircraft may
increase the Company's inventory costs and may result in the
Company receiving lower prices for its pre-owned aircraft.
The market for large cabin business jet aircraft is highly
competitive. The Gulfstream IV-SP competes in the large cabin
business jet aircraft market segment, principally with Dassault
Aviation S.A. (which has announced that it will merge with
Aerospatiale SA) and Bombardier Inc. ("Bombardier"). The
Gulfstream V competes in the ultra-long range business jet
aircraft market segment, primarily with the Global Express, which
is being marketed by Canadair, a subsidiary of Bombardier, and
which is scheduled for certification at least 12 months after the
anticipated initial delivery of the Gulfstream V. In addition,
in July 1996, The Boeing Company ("Boeing"), in partnership with
General Electric Co., publicly announced that it intends to begin
to market a version of the Boeing 737 into the ultra-long range
business jet aircraft market segment. Boeing has indicated that
it expects that this aircraft could be available for delivery in
late 1998 or 1999. The Company's competitors may have access to
greater resources (including, in certain cases, governmental
subsidies) than are available to the Company.
The Company's ability to compete successfully in the large
business jet and ultra-long range business jet aircraft markets
over the long term requires continued technological and
performance enhancements to Gulfstream aircraft. No assurance
can be given that the Company's competitors will not be able to
produce aircraft capable of performance comparable or superior to
Gulfstream aircraft in the future.
PURCHASED MATERIALS AND EQUIPMENT
Approximately 70% of the production costs of both the
Gulfstream IV-SP and the Gulfstream V consist of materials and
equipment purchased from other manufacturers. While the
Company's production activities have never been materially
affected by its inability to obtain components, and while the
Company maintains business interruption insurance in the event
that such a disruption should occur, the failure of the Company's
suppliers to meet the Company's performance specifications,
quality standards, pricing terms or delivery schedules could have
a material adverse impact on the profitability of the Company's
new aircraft sales or the ability of the Company to timely
deliver new aircraft to customers.
POSSIBLE FLUCTUATIONS IN QUARTERLY AND ANNUAL RESULTS
The Company records revenue from the sale of a new "green"
aircraft (i.e., before exterior painting and installation of
customer selected interiors and optional avionics) when that
aircraft is delivered to the customer. As a result, a delay or
an acceleration in the delivery of new aircraft may affect the
Company's revenues for a particular quarter or year and may make
quarter-to-quarter or year-to-year comparisons difficult. In
addition, the Company's production schedule may be affected by
many factors, including timing of deliveries by suppliers.
PENDING TAX AUDIT
The Company is involved in a tax audit by the Internal
Revenue Service covering the years ended December 31, 1990 and
1991. The revenue agent's report includes several proposed
adjustments involving the deductibility of certain compensation
expense and items relating to the capitalization of the Company
as well as the allocation of the purchase price in connection
with the acquisition of the Gulfstream business by certain
partnerships formed by Forstmann Little & Co. (the
"Acquisition"), including the treatment of advance payments with
respect to and the cost of aircraft that were in backlog at the
time of the Acquisition and the amortization of amounts allocated
to intangible assets. The Company believes that the ultimate
resolution of these issues will not have a material adverse
effect on its financial statements because the financial
statements already reflect what the Company currently believes is
the expected loss of benefit arising from the
resolution of these issues. However, because the revenue
agent's report is proposing adjustments in amounts materially in
excess of what the Company has reflected in its financial
statements and because it may take several years to resolve the
disputed matters, the ultimate extent of the Company's expected
loss of benefit and liability with respect to these matters
cannot be predicted with certainty and no assurance can be given
that the Company's financial position or results of operations
will not be adversely affected.
LEVERAGE AND DEBT SERVICE
The degree to which the Company is leveraged at a particular
time could have important consequences to the Company, including
the following: (i) the Company's ability to obtain additional
financing in the future for working capital, capital
expenditures, product development, acquisitions, general
corporate purposes or other purposes may be impaired; (ii) a
portion of the Company's and its subsidiaries' cash flow from
operations must be dedicated to the payment of the principal of
and interest on its indebtedness; (iii) the Company's credit
agreement contains certain restrictive financial and operating
covenants, including, among others, requirements that the Company
satisfy certain financial ratios; (iv) a significant portion of
Gulfstream's borrowings will be at floating rates of interest,
causing Gulfstream to be vulnerable to increases in interest
rates; (v) the Company's degree of leverage may make it more
vulnerable in a downturn in general economic conditions; and (vi)
the Company's financial position may limit its flexibility in
responding to changing business and economic conditions.
