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FORM 10-Q/A
AMENDMENT NO. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from ________________ to ______________
Commission File Number 33-56532
EVERGREEN INTERNATIONAL AVIATION, INC.
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(Exact name of registrant as specified in its charter)
Oregon 93-0729079
- --------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3850 Three Mile Lane
McMinnville, Oregon 97128
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(Address of principal executive offices)
(503) 472-9361
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
The number of shares outstanding of Registrant's Common Stock at January 15,
1997 was 5,580,000
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ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K
(a) Exhibits filed with this Form 10-Q
3.1* Articles of Incorporation of Evergreen International Aviation, Inc.,
as amended to date
3.2* Bylaws of Evergreen International Aviation, Inc., as amended to date
3.3* Articles of Incorporation of Evergreen International Airlines, Inc.,
as amended to date
3.4* Restated Bylaws of Evergreen International Airlines, Inc., as amended
to date
3.5* Articles of Incorporation of Evergreen Helicopters, Inc. as amended to
date
3.6* Bylaws of Evergreen Helicopters, Inc., as amended to date
3.7* Articles of Incorporation of Evergreen Air Center, Inc., as amended to
date
3.8* Bylaws of Evergreen Air Center, Inc., as amended to date
10.1 Amendment No. 16 and Forbearance Agreement by and among the Company,
certain affiliated companies and Congress Financial Corporation dated
as of April 23, 1996
27++ Financial Data Schedule
* Incorporation by reference from exhibit filing to the Company's
Registration Statement on Form S-4 (file no. 33-56532), filed with the
Commission on April 28,1 993.
++ Incorporated by reference from exhibit filing to the Company's
Form 10-Q for the quarter ended November 30, 1996, filed with the Commission on
January 20, 1997.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on September 5, 1996 concerning
intervention of the Trustee in a lawsuit on behalf of all holders of the
Company's Senior Notes.
The undersigned registrant hereby amends its Quarterly Report on Form 10-Q
for the quarter ended November 30, 1996, as set forth above. Although the only
change made herein is the addition of Exhibit 10.1 to the exhibit list, the
complete text of Item 6 is set forth pursuant to Regulation Section 240.12b-15.
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Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EVERGREEN INTERNATIONAL AVIATION, INC.
Date: February 27, 1996 /s/ Delford M. Smith
-------------------------------------------
Delford M. Smith
Chief Executive Officer
Date: February 27, 1996 /s/ D. Michael Clark
-------------------------------------------
D. Michael Clark
Chief Financial Officer
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EXHIBIT 10.1
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AMENDMENT NO. 16 AND
FORBEARANCE AGREEMENT
AMENDMENT NO. 16 AND FORBEARANCE AGREEMENT ("Agreement"), dated as of April
23, 1996, by and among EVERGREEN INTERNATIONAL AIRLINES, INC., an Oregon
corporation ("EIA"), EVERGREEN AVIATION GROUND LOGISTICS ENTERPRISES, INC., a
Delaware corporation ("EAGLE"), and EVERGREEN HELICOPTERS, INC., an Oregon
corporation ("EHI"; and together with EIA and EAGLE, collectively, "Borrowers"),
and EVERGREEN INTERNATIONAL AVIATION, INC., an Oregon corporation ("Evergreen"),
EVERGREEN AIRCRAFT SALES AND LEASING CO., a Nevada corporation ("EASL"),
EVERGREEN AGRICULTURAL ENTERPRISES, INC., an Oregon corporation
("Agricultural"), EVERGREEN AIR CENTER, INC., an Oregon corporation ("Air
Center"), EVERGREEN EQUITY, INC., a Nevada corporation ("Equity"), EVERGREEN
HELICOPTERS OF ALASKA, INC., an Alaska corporation ("EHA"), EVERGREEN
HELICOPTERS INTERNATIONAL, INC., a Texas corporation ("EHII"), E&K PROPERTIES,
INC., an Oregon corporation ("E&K"), and AMERICAN WORLD AVIATION, INC., a New
York corporation ("AWA"; and together with Evergreen, EASL, Agricultural, Air
Center, Equity, EHA, EHII, E&K and AWA, collectively, "Guarantors"), and
CONGRESS FINANCIAL CORPORATION, a California corporation ("Lender").
WITNESSETH
WHEREAS, Lender, Borrowers and Guarantors have entered into certain
financing arrangements pursuant to the Loan and Security Agreement, dated as of
January 23, 1992, by and among Lender, Borrowers and Guarantors (as amended
hereby, and as the same may be further amended, modified, supplemented,
extended, renewed, restated or replaced, the "Loan Agreement", and together with
all agreements, documents and instruments at any time executed and/or delivered
in connection therewith or related thereto, collectively, the "Financing
Agreements"); and
WHEREAS, Borrowers and Guarantors have requested that Lender forbear from
exercising its rights as a result of certain Events of Default (as defined in
the Loan Agreement) that have occurred and are continuing; and
WHEREAS, Lender is willing to agree to forbear from exercising its rights
and remedies on the terms and conditions contained herein;
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NOW, THEREFORE, in consideration of the foregoing, and the respective
agreements, warranties and covenants contained herein, the parties hereto agree,
covenant and warrant as follows (the agreements, covenants and warranties of
Borrowers and Guarantors being joint and several):
SECTION 1 DEFINITIONS
1.1 Amendments to Definitions
(a) All references to the term "Eligible Helicopter Inventory" in the
Loan Agreement or any of the other Financing Agreements shall be deemed and each
such reference is hereby amended to mean Inventory of EHI which is otherwise
Eligible Inventory consisting of (i) spare helicopter engines or helicopter
engine modules (A) which have less than 750 rated takeoff horsepower, (B) which
are not affixed to or installed on any aircraft and (C) are reported to Lender
for purposes of being considered Eligible Helicopter Inventory and (ii) Spare
Parts for helicopter and other aircraft.
(b) All references to the term "Interest Rate" in the Loan Agreement
or any of the other Financing Agreements shall be deemed and each such reference
is hereby amended to mean a rate of two and one-quarter percent (2-1/4%) per
annum in excess of the Prime Rate, PROVIDED, THAT, (i) upon or at any time after
any Event of Default or termination or non-renewal of the Loan Agreement, at
Lender's option, the term "Interest Rate" shall mean a rate of four and one-
quarter percent (4-1/4%) in excess of Prime Rate, and (ii) in the event that the
outstanding amount of the Revolving Loans and/or Letter of Credit
Accommodations, or the aggregate amount of the outstanding Revolving Loans,
Letter of Credit Accommodations, the Term Loan and the Supplemental Term Loans
exceed the amounts available under the Lending Formulas, the lending sublimits
set forth in Section 2.1(d) of the Loan Agreement or Section 2.3(b) of the Loan
Agreement or the Maximum Credit, as applicable, at Lender's option, the term
"Interest Rate" shall mean a rate of four and one-quarter percent (4-1/4%) per
annum in excess of the Prime Rate as to the amount of any such excess(es)
(whether or not such excess(es) arise or are made with or without Lender's
knowledge or consent or whether made before or after an Event of Default).
(c) All references to the term "Maximum Credit" in the Loan Agreement
or any of the other Financing Agreements shall be deemed and each such reference
is hereby amended to mean $45,000,000.
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1.2 ADDITIONAL DEFINITIONS
As used herein, the following terms shall have the respective meanings
given to them below and the Loan Agreement shall be deemed and is hereby amended
to include, in addition and not in limitation, each of the following
definitions:
(a) "Existing Defaults" shall mean the Events of Default that have
occurred which are described on Exhibit A hereto.
(b) "Maturity Date" shall mean June 23, 1996, PROVIDED, THAT, (i) the
Maturity Date shall automatically be extended for successive periods of sixty
(60) days thereafter, unless Lender shall send written notice to Evergreen on a
business day at any time prior to June 23, 1996 or the last day of any such
sixty (60) day period that Lender does not want to extend the Maturity Date, and
(ii) in no event shall the Maturity Date be later than April 1, 1997.
(c) "Sikorsky Skycrane" shall have the meaning set forth on Exhibit B
hereto.
1.3 INTERPRETATION
All capitalized terms used herein shall have the meanings assigned thereto
in the Loan Agreement unless otherwise defined herein.
SECTION 2 ACKNOWLEDGMENT
2.1 ACKNOWLEDGMENT OF OBLIGATIONS
Each of Borrowers and Guarantors hereby acknowledges, confirms and agrees
that as of the close of business on April 22, 1996, (a) EIA is indebted to
Lender in respect of the Revolving Loans in the principal amount of
$27,287,194.20, (b) EHI is indebted to Lender in respect of the Revolving Loans
in the principal amount of $3,205,080.80, (c) EAGLE is indebted to Lender in
respect of the Revolving Loans in the principal amount of $1,195,737.93,
(d) EAGLE is indebted to Lender in respect of the Term Loan in the principal
amount of $923,433.21, and (e) EAGLE is indebted to Lender in respect of the
Supplemental Term Loans in the principal amount of $110,225.76. All such Loans,
together with interest accrued and accruing thereon, and costs, expenses and
other charges now or hereafter payable by Borrowers to Lender, are
unconditionally owing by Borrowers to Lender, without offset, defense or
counterclaim of any kind, nature or description whatsoever. Each of Guarantors
acknowledges, confirms and agrees that the obligations, liabilities and
indebtedness of each of them to Lender for the payment and performance of the
Obligations pursuant
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to their respective Guarantees are unconditionally owing to Lender without
offset, defense or counterclaim of any kind, nature or description whatsoever.
2.2 ACKNOWLEDGMENT OF SECURITY INTERESTS
Each of Borrowers and Guarantors hereby acknowledges, confirms and agrees
that Lender has and shall continue to have valid, enforceable and perfected
liens upon and security interests in the Collateral and the Guarantor Collateral
heretofore granted to Lender pursuant to the Financing Agreements or otherwise
granted to or held by Lender.
2.3 BINDING EFFECT OF DOCUMENTS
Each of Borrowers and Guarantors hereby acknowledges, confirms and agrees
that: (a) each of the Financing Agreements to which it is a party has been duly
executed and delivered to Lender by Borrowers or Guarantors, as the case may be,
and each is in full force and effect as of the date hereof, (b) the agreements
and obligations of Borrowers or Guarantors contained in such documents
constitute the legal, valid and binding obligations of Borrowers or Guarantors,
as the case may be, enforceable against it in accordance with their respective
terms and Borrowers and Guarantors have no valid defense to the enforcement of
such obligations, and (c) Lender is and shall be entitled to the rights,
remedies and benefits provided for in the Financing Agreements.
SECTION 3 FORBEARANCE OF CERTAIN EVENTS OF DEFAULT
3.1 ACKNOWLEDGMENT OF DEFAULT
(a) Each of Borrowers and Guarantors hereby acknowledges and agrees
that the Existing Defaults have occurred and are continuing, each of which
constitutes an Event of Default and entitles Lender to exercise its rights and
remedies under the Financing Agreements, applicable law or otherwise. Lender
has not waived, presently does not intend to waive and may never waive such
Existing Defaults and nothing contained herein or the transactions contemplated
hereby shall be deemed to constitute any such waiver. Each of Borrowers and
Guarantors hereby acknowledges and agrees that Lender has the right to declare
the Obligations to be immediately due and payable under the terms of the
Financing Agreements and that demand for payment of the Obligations is hereby
deemed to have been made against Borrowers and Guarantors under the Financing
Agreements.
(b) Borrowers have advised Lender that there are or may be existing
Events of Default other than the Existing Defaults and that Borrowers will after
the date hereof be seeking the agreement of Lender to waive such Events of
Default or
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forbear from the exercise of Lender's rights and remedies as a result of such
Events of Default. Each of Borrowers agrees that by no later than May 7, 1996,
Borrower shall provide Lender with a complete and correct list of such Events of
Default, in a form and substance satisfactory to Lender. Upon receipt of such
list, Lender will consider Borrowers' request. Nothing contained herein shall
be construed to require Lender to waive such Events of Default or to forbear
from the exercise of its rights or remedies as a result of such Events of
Default or to entitle Borrowers or Guarantors to such waiver or forbearance.
3.2 FORBEARANCE
(a) In reliance upon the representations, warranties and covenants of
Borrowers and Guarantors contained in this Agreement, and subject to the terms
and conditions of this Agreement and any documents or instruments executed in
connection herewith, Lender agrees to forbear from exercising its rights and
remedies under the Financing Agreements, applicable law or otherwise, to the
effect that the rights and benefits otherwise available to Borrowers under the
Loan Agreement in the absence of an Event of Default shall continue subject to
the amendments and modifications contained herein until the earliest of the
following dates (the earliest of such dates being referred to herein as the
"Termination Date"):
(i) the date ten (10) days after the date of written notice (by
facsimile or otherwise) by Lender to Evergreen of the termination of such
agreement by Lender to forbear from exercising its rights and remedies as
set forth herein,
(ii) the Maturity Date,
(iii) the date of the occurrence of any Event of Default, other than
the Existing Defaults,
(iv) the date any person to whom any of Borrowers or Guarantors is
indebted or from whom any of Borrowers or Guarantors leases any aircraft
(including any person to whom the lessor has assigned its rights as
collateral for the Indebtedness of such lessor) shall terminate any
existing or future agreement by such party to forbear as to any defaults in
connection with such Indebtedness or under any agreements related thereto
or the waiver of any such defaults by such person shall cease or terminate,
(v) the date any person to whom any of Borrowers or Guarantors is
indebted or from whom any of Borrowers or Guarantors leases any aircraft
(including any person to whom the lessor has assigned its rights as
collateral for the Indebtedness of such lessor), other than Cargill
Financial Services
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Corporation, shall take or threaten to take any action as a result of any
default in connection with such Indebtedness or under any agreements
related thereto, including, without limitation, sending any notice of a
default under such agreement to Lender as contemplated by the intercreditor
agreement between Lender and such party (or its predecessor, successor or
assignee), demanding repayment of all or any portion of the Indebtedness of
Borrowers or Guarantors to such party, the commencement of any legal
proceedings to enforce any of its rights or remedies as a creditor against
any of Borrowers or Guarantors or any of their respective assets or
properties, demanding additional collateral or guarantees, charging a
higher rate of interest or any fees with respect to such Indebtedness,
requiring a change in the scheduled amortization or maturity date of such
Indebtedness or exercising, or threatening to exercise, any of the other
rights or remedies of such a party as a result of such default, whether
under the agreements, applicable law or otherwise, or
(vi) the date Cargill Financial Services Corporation shall obtain a
judgment against any of Borrowers or Guarantors or their respective
properties or assets or shall commence any legal proceeding against any of
Borrowers or Guarantors or their respective properties or assets or shall
take any other action to seek to collect Indebtedness of Evergreen payable
to it or against any assets or properties of any of Borrowers or
Guarantors, except for the commencement of a suit for the collection of the
Indebtedness due to Cargill Financial Services Corporation evidenced by the
Senior Notes.
(b) Upon the Termination Date, the agreement of Lender to forbear shall
automatically and without further action terminate and be of no force and
effect, it being understood and agreed that the effect of such termination will
be to permit Lender to exercise such rights and remedies immediately, including,
but not limited to, (i) ceasing to make any further Loans or provide any further
Letter of Credit Accommodations, and (ii) the acceleration of the Obligations;
in either case without any further notice, passage of time or forbearance of any
kind.
(c) Each of Borrowers and Guarantors agrees that all of the Obligations
shall, if not sooner paid, be absolutely and unconditionally due and payable in
full in cash by Borrower to Lender on the Termination Date. In addition, at any
time on or after the Termination Date, Lender shall have the right to terminate
any provision of the Loan Agreement relating to future Loans or Letter of Credit
Accommodations by Lender to Borrowers. No termination of the Loan Agreement or
any provision thereof shall relieve or discharge any of Borrowers or Guarantors
of their duties, covenants and obligations under the Loan Agreement and the
other Financing Agreements until all Obligations have been finally paid in full.
Lender may, at its sole and exclusive option, extend the Maturity Date by giving
written notice to Evergreen.
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3.3 NO OTHER WAIVERS; RESERVATION OF RIGHTS
(a) Lender has not waived, is not by this Agreement waiving, and has
no intention of waiving, any Events of Default which may be continuing on the
date hereof or any Events of Default which may occur after the date hereof
(whether the same or similar to the Existing Defaults or otherwise), and except
as expressly set forth in Section 3.2 hereof, Lender has not agreed to forbear
with respect to any of its rights or remedies concerning any Events of Default
(other than the Existing Defaults), which may have occurred or are continuing as
of the date hereof or which may occur after the date hereof.
(b) Subject to Section 3.2 above, Lender reserves the right, in its
discretion, to exercise any or all of its rights and remedies under the Loan
Agreement and the other Financing Agreements as a result of any Events of
Default which may be continuing on the date hereof or any Event of Default which
may occur after the date hereof, and Lender has not waived any of such rights or
remedies, and nothing in this Agreement, and no delay on its part in exercising
any such rights or remedies, should be construed as a waiver of any such rights
or remedies.
SECTION 4 RELEASE
4.1 RELEASE
(a) In consideration of the agreements of Lender contained herein and
the making of loans by Lender to Borrowers pursuant to the Loan Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, each of Borrowers and Guarantors on behalf of itself and
its successors, assigns, and other legal representatives, hereby, jointly and
severally, absolutely, unconditionally and irrevocably releases, remises and
forever discharges the Lender, its successors and assigns, and its present and
former shareholders, affiliates, subsidiaries, divisions, predecessors,
directors, officers, attorneys, employees, agents and other representatives (the
Lender and all such other parties being hereinafter referred to collectively as
the "Releasees" and individually as a "Releasee"), of and from all demands,
actions, causes of action, suits, covenants, contracts, controversies,
agreements, promises, sums of money, accounts, bills, reckonings, damages and
any and all other claims, counterclaims, defenses, rights of set-off, demands
and liabilities whatsoever (individually, a "Claim" and collectively, "Claims")
of every name and nature, know or unknown, suspected or unsuspected, both at law
and in equity, which each of Borrowers and Guarantors, or any of its successors,
assigns, or other legal representatives may now or hereafter own, hold, have or
claim to have against the Releasees or any of them for, upon, or by reason of
any nature, cause or thing whatsoever which arises at any time on or prior to
the day
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and date of this Agreement, including, without limitation, for or on account of,
or in relation to, or in any way in connection with any of the Loan Agreement,
as amended and supplemented through the date hereof and the other Financing
Agreements.
(b) Each of Borrowers and Guarantors understands, acknowledges and
agrees that the release set forth above may be pleaded as a full and complete
defense and may be used as a basis for an injunction against any action, suit or
other proceeding which may be instituted, prosecuted or attempted in breach of
the provisions of such release.
(c) Each of Borrowers and Guarantors agrees that no fact, event,
circumstance, evidence or transaction which could now be asserted or which may
hereafter be discovered shall affect in any manner the final and unconditional
nature of the release set forth above.
4.2 COVENANT NOT TO SUE
Each of Borrowers and Guarantors, on behalf of itself and its successors,
assigns, and other legal representatives, hereby absolutely, unconditionally
and irrevocably, jointly and severally, covenants and agrees with each Releasee
that it will not sue (at law, in equity, in any regulatory proceeding or
otherwise) any Releasee on the basis of any Claim released, remised and
discharged by any of Borrowers or Guarantors pursuant to Section 4.1 above. If
any of Borrowers or Guarantors violates the foregoing covenant, each of
Borrowers and Guarantors agrees to pay, in addition to such other damages as any
Releasee may sustain as a result of such violation, all attorneys' fees and
costs incurred by any Releasee as a result of such violation.
SECTION 5. AMENDMENTS AND SUPPLEMENTS
5.1 REVOLVING LOANS
(a) Section 2.1(a)(i) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
"(i) eighty percent (80%) of the Net Amount of the Eligible
Accounts of EIA (or such greater or lesser percentage thereof as
Lender may in good faith determine from time to time), plus"
(b) Section 2.1(b)(i) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
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"(i) eighty percent (80%) of the Net Amount of the Eligible
Accounts of EHI (or such greater or lesser percentage thereof as
Lender may in good faith determine from time to time), plus"
(c) Section 2.1(c) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
"(c) Subject to, and upon the terms and conditions contained
herein, at the request of EAGLE or Evergreen as agent for EAGLE (as
hereinafter provided), Lender shall, in its good faith discretion,
make Revolving Loans to EAGLE, in such amounts from time to time as
Lender shall in good faith determine, in its discretion, of up to
eighty percent (80%) of the Net Amount of Eligible Accounts of EAGLE
(or such greater or lesser percentage thereof as Lender may in good
faith determine from time to time)."
5.2 INVENTORY LOAN LIMIT
Section 2.1(d)(i) of the Loan Agreement is hereby deleted in its entirety
and the following substituted therefor:
"(i) the aggregate unpaid principal amount of the Revolving Loans
to EIA and EHI outstanding at any time based on the Eligible Inventory
of EIA and EHI regardless of the amounts of such Eligible Inventory
shall not exceed $25,000,000; and"
5.3 SUPPLEMENTAL TERM LOAN
(a) The Supplemental Term Loan made by Lender to EAGLE on May 11,
1992 in the original principal amount of $508,735 and the Supplemental Term Loan
made by Lender to EAGLE on November 30, 1992 in the original principal amount of
$317,000 are and shall remain (A) evidenced by the respective Supplemental Term
Notes, (B) to be repaid, together with interest and other amounts payable
thereunder in accordance with the terms and provisions of such Supplemental Term
Note, Loan Agreement and the other Financing Agreements, and (C) secured by all
of the Collateral.
(b) Section 2.3 of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor: "[Intentionally omitted]."
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5.4 LETTER OF CREDIT ACCOMMODATIONS
Section 2.4(f) is hereby deleted in its entirety and the following
substituted therefor:
"(f) Notwithstanding anything to the contrary contained herein or
in any of the other Financing Agreements, except in Lender's
discretion, the aggregate amount of all Letter of Credit
Accommodations pursuant hereto and all other commitments and
obligations made or incurred by Lender pursuant hereto for the account
or benefit of Borrowers in connection therewith outstanding at any
time shall not exceed $4,000,000."
5.5 EARLY TERMINATION FEE
Section 9.1(f) of Loan Agreement is hereby deleted in its entirety and the
following substituted therefor:
"(f) If Lender terminates this Agreement or the other Financing
Agreements upon the occurrence of an Event of Default or at the
request of Borrowers prior to the Renewal Date or other than on any
anniversary of the Renewal Date, in view of the impracticality and
extreme difficulty of ascertaining actual damages and by mutual
agreement of the parties as to a reasonable calculation of Lender's
lost profits as a result thereof, Borrowers hereby agree to pay to
Lender upon the effective date of such termination, an early
termination fee in an amount equal to three percent (3%) of the
Maximum Credit if such termination is effective prior to April 1,
1997."
5.6 SALES OF ASSETS
Section 6.9(b) of the Loan Agreement is hereby deleted in its entirety and
the following substituted therefor:
"(b) sell, assign, lease, transfer, abandon or otherwise dispose
of any stock or Indebtedness to any other Person or any of their
respective properties or assets to any other Person, EXCEPT:
(i) sales of Inventory in the ordinary course of business,
(ii) sales of Equipment as permitted under Section 6.12,
(iii) sales, assignments, leases, transfers or other dispositions
of real property, aircraft or aircraft engines."
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5.7 RELEASE OF SIKORSKY SKYCRANE
(a) Subject to the terms and conditions contained herein, Lender
shall, upon the written request of Evergreen, at the expense of Borrowers,
release the then existing security interests granted by Equity to Lender in the
Sikorsky Skycrane. In order to effectuate such release, Lender shall execute
and deliver to Evergreen appropriate releases, in form and substance
satisfactory to Lender, to evidence such release of the Sikorsky Skycrane from
the security interests of Lender.
(b) Lender shall deliver the releases of such security interests of
Lender with respect to the Sikorsky Skycrane as provided in Section 5.7(a) above
upon the receipt by Lender of not less than $5,000,000 in cash or other
immediately available funds from the net cash proceeds of either (i) the sale by
Equity of the Sikorsky Skycrane in a BONA FIDE transaction or (ii) loans from a
third party based on the value of the Sikorsky Skycrane, the repayment of which
are secured by the Sikorsky Skycrane as collateral, PROVIDED, THAT, (A) after
giving effect to such sale or refinancing no Event of Default shall arise as a
result thereof, (B) all such amounts received by Lender shall be free and clear
of any claims, security interests or other rights of any other person, or any
restrictions or limitations with respect thereto, and (C) such sale or
refinancing, and the payment of such amounts to Lender, shall not breach or
violate any of the terms of any material agreement to which any of Borrowers,
Guarantors or Additional Guarantors is a party or by which any of them or its
assets are bound. Nothing contained in this Section 5.7 shall be construed to
limit, waive or otherwise affect any of the terms of the Loan Agreement or
otherwise affect any of the terms of the Loan Agreement or the other Financing
Agreements, EXCEPT, THAT, notwithstanding anything to the contrary contained in
the other Financing Agreements, Equity shall be permitted to sell the Sikorsky
Skycrane to the extent it complies with the terms of this Section 5.7. Such
releases shall only be effective upon the consummation of such sale or
refinancing and the satisfaction of the conditions set forth in this
Section 5.7(b).
(c) Lender shall apply all of the $5,000,000 received by Lender as
set forth above to the repayment of the Obligations in such order and manner as
Lender may determine and upon the application of such proceeds, Lender may
establish a reserve in such amount.
5.8 REPAYMENT OF OBLIGATIONS OF EAGLE
(a) Subject to the terms and conditions contained herein, Lender
shall, upon the written request of Evergreen, at the expense of Borrowers,
release the then existing security interests granted by EAGLE to Lender in the
assets of EAGLE and terminate the Guarantee by EAGLE in favor of Lender. In
order to effectuate
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such release and termination, Lender shall execute and deliver to Evergreen UCC-
3 terminations, in form and substance satisfactory to Lender, to evidence such
release of the assets of EAGLE from the security interests of Lender and execute
and deliver to Evergreen a termination of the Guarantee by EAGLE in favor of
Lender, in form and substance satisfactory to Lender.
(b) Lender shall deliver the UCC-3 terminations and the termination
of the Guarantee as provided in Section 5.8(a) above upon the receipt by Lender
in cash or other immediately available funds of not less than the amount equal
to the sum of the then outstanding Obligations of EAGLE relating to the
Revolving Loans to EAGLE (including principal, interest, fees, costs and
expenses related thereto) plus $6,000,000 from the net cash proceeds of either
the sale of any of the assets, business and properties of EAGLE or the sale of
capital stock of EAGLE, in each case in a BONA FIDE transaction or loans to
EAGLE or proceeds of a cash equity capital contribution to EAGLE in each case in
a BONA FIDE transaction; PROVIDED, THAT:
(i) after giving effect to such sale, refinancing or equity
contribution, no Event of Default shall arise as a result thereof;
(ii) all such amounts received by Lender shall be free and clear of
any claims, security interests or other rights of any other person, or any
restrictions or limitations with respect thereto;
(iii) such sale, refinancing or equity contribution, and the payment
of such amounts to Lender, shall not breach or violate any of the terms of
any material agreement to which any of Borrowers, Guarantors or Additional
Guarantors is a party or by which any of them or its assets are bound;
(iv) Lender shall have received, in form and substance satisfactory to
Lender, evidence that all obligations, liabilities and Indebtedness of
EAGLE to the other Borrowers, Guarantors and Additional Guarantors shall
have been paid or otherwise satisfied in full, except for (A) indebtedness,
if any, arising from the sale of goods or rendition of services by such
other Borrowers, Guarantors or Additional Guarantors to EAGLE in the
ordinary course of their respective businesses to the extent such sale of
goods or rendition of services are on prices and terms no less favorable to
such Borrowers, Guarantors or Additional Guarantors than would have been
obtained in an arm's length transaction with a non-affiliated person, and
(B) existing obligations, liabilities and Indebtedness of EAGLE to the
other Borrowers, Guarantors and Additional Guarantors outstanding as of the
date of the delivery by Lender of the UCC-3 terminations and the
termination of the Guarantee not to exceed, in the aggregate, an amount
equal to $2,000,000 minus the amount of the liability
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of Borrowers, Guarantors and Additional Guarantors with respect to
Indebtedness or other obligations of EAGLE as described in subsection (v)
below;
(v) Lender shall have received, in form and substance satisfactory to
Lender, evidence that any guarantees or other obligations of the other
Borrowers, Guarantors and Additional Guarantors with respect to
Indebtedness or other obligations of EAGLE to or for the benefit of third
parties shall have been unconditionally terminated and such Borrowers,
Guarantors and Additional Guarantors shall have no further liability
(contingent or otherwise) in connection therewith, EXCEPT, THAT, such
guarantees or other obligations of EIA, EHI, Guarantors and Additional
Guarantors may continue so long as the liability thereunder (contingent or
otherwise) does not exceed, in the aggregate, an amount equal to $2,000,000
minus the amount of the existing obligations, liabilities and indebtedness
of EAGLE to the other Borrowers, Guarantors and Additional Guarantors which
remain outstanding as of the date of the delivery by Lender of the UCC-3
terminations and the termination of the Guarantee as contemplated by
subsection (iv) above;
(vi) Lender shall have received, in form and substance satisfactory to
Lender, a subordination agreement duly authorized, executed and delivered
by EAGLE, providing for, INTER ALIA, the subordination in right of payment
of all amounts owing by the other Borrowers, Guarantors and Additional
Guarantors to EAGLE to the indefeasible payment and satisfaction in full of
the Obligations PROVIDED, THAT, in the event that the proceeds received by
Lender as provided above are from loans or a cash equity contribution to
EAGLE, under the terms of such subordination, (A) Evergreen shall be
permitted to make payments of the Indebtedness owing by Evergreen to EAGLE
so long as no Event of Default shall exist or have occurred, and (B) the
other Borrowers, Guarantors and Additional Guarantors shall be permitted to
make payments in respect of Indebtedness owing to EAGLE arising from the
sale of goods or rendition of services by EAGLE to such other Borrowers,
Guarantors and additional Guarantors in the ordinary course of their
respective businesses to the extent such sale of goods or rendition of
services are on prices and terms no less favorable to such Borrowers,
Guarantors or Additional Guarantors then would have been obtained in an
arm's length transaction with a non-affiliated person;
(vii) Lender shall have received, in form and substance
satisfactory to Lender, a release in favor of Lender substantially in the
form of Exhibit C hereto, duly authorized, executed and delivered by EAGLE,
providing for, INTER ALIA, the release by EAGLE, its shareholders,
officers, directors or employees,
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of Lender, its shareholders, officers, directors, employees or
representatives from all claims, liabilities, actions or causes of action,
at law or in equity, known or unknown that EAGLE or any of its
shareholders, officers, directors or employees had or may have against
Lender or any of its officers, directors, employees, agents or
representatives;
(viii) Lender shall have received an agreement, in form and
substance satisfactory to Lender, by EAGLE and the other Borrowers,
Guarantors and Additional Guarantors, duly authorized, executed and
delivered by each of them, amending the Loan Agreement to reflect, INTER
ALIA, that EAGLE has no further right to request or receive Loans or Letter
of Credit Accommodations and that EAGLE is otherwise no longer a Borrower
for purposes of the Loan Agreement or any of the other Financing
Agreements.
(c) Lender shall apply the net cash proceeds received by Lender as
described in Section 5.8(b) above to the Obligations of EAGLE relating to the
Revolving Loans to EAGLE (including principal, interest, fees, costs and
expenses related thereto) and such portion of the $6,000,000 received in
addition thereto as may be required to the repayment of all other Obligations of
EAGLE to Lender (other than the Obligations arising pursuant to the Guarantees
by EAGLE of the Obligations of EIA and EHI) in such order and manner as Lender
shall determine. The remaining balance of such $6,000,000 shall be applied by
Lender to the Obligations of the other Borrowers in such order and manner as
Lender shall determine, and upon such application Lender shall establish a
reserve in such amount.
(d) The UCC-3 terminations and the termination of the Guarantee of
EAGLE to be delivered by Lender as provided in Section 5.8(a) above shall only
be effective upon the consummation of the sale of any of the assets, business
and properties of EAGLE or the sale of capital stock of EAGLE or the loans or
equity capital contribution as described in Section 5.8(b) above and the
satisfaction of the conditions set forth in Section 5.8(b) above. Nothing
contained herein shall be construed to limit, waive or otherwise affect any of
the terms of the Loan Agreement or the other Financing Agreements, except for
Section 6.9(b) of the Loan Agreement to the extent of the sale of assets of
EAGLE, so long as all of the conditions set forth in Section 5.8(b) above are
satisfied in connection with such sale. If, after receipt of any payment of, or
proceeds applied to the payment of, all or any part of the Obligations, Lender
is for any reason compelled to surrender such payment or proceeds to any Person,
because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason,
then the Obligations or part thereof intended to be satisfied shall be revived,
reinstated and continue and the Guarantee of EAGLE and its other Obligations
under the Loan
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Agreement and the other Financing Agreements shall continue in full force as if
such payment or proceeds had not been received by Lender and the conditions
contained in Section 5.8(b) had not been satisfied, and EAGLE and the other
Borrowers, Guarantors and Additional Guarantors shall be liable to pay to
Lender, and hereby indemnify Lender and hold Lender harmless for, the amount of
such payment or proceeds surrendered. The provisions of this Section 5.8(d)
shall be and remain effective notwithstanding any contrary action taken by
Lender in reliance upon such payment or application of proceeds, and any such
contrary action so taken shall be without prejudice to Lender's rights and shall
be deemed to have been conditioned upon such payment or application of proceeds
having become final and irrevocable. The provisions of this Section 5.8(d)
shall survive the termination of the Guarantee of EAGLE and its other
Obligations under the Loan Agreement and the other Financing Agreements.
5.9 AMENDMENT TO GUARANTEES
All references to the term "Accounts Financing Agreement [Security
Agreement]" in each of the Guarantees shall be deemed and each such reference is
hereby amended to mean the Loan Agreement as defined herein.
5.10 TERMINATION OF LETTER AGREEMENT
The letter agreement, dated January 23, 1992, by and among Lender,
Borrowers and Guarantors with respect to certain sales of assets by Air Center
and Agricultural and the release of their Guarantees is hereby terminated and of
no further force and effect.
5.11 AMENDMENT AND EXTENSION FEE
Borrowers shall pay to Lender a fee in an amount equal to $29,000, which
fee shall be fully earned as of and payable on the date hereof and Borrowers
shall pay to Lender every sixty (60) days, a fee in an amount equal to $29,000
in respect of each sixty (60) day period (or part thereof) after June 23, 1996
prior to the Maturity Date, which fee shall be fully earned as of and payable in
advance on the first day of each such sixty (60) day period.
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS
Borrowers and Guarantors hereby jointly and severally represent, warrant
and covenant with and to Lender as follows:
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6.1 BINDING EFFECT OF DOCUMENTS
This Agreement and the other Financing Agreements have been duly executed
and delivered to the Lender by each of Borrowers and Guarantors and are in full
force and effect. The agreements and obligations of each of Borrowers and
Guarantors contained in such documents constitute legal, valid and binding
obligations of each such party enforceable by Lender against each such party in
accordance with their respective terms.
6.2 NO CONFLICT, ETC.
The execution and delivery and performance of this Agreement by each of
Borrowers and Guarantors will not violate any material agreement, instrument or
undertaking by which it is bound, and will not result in, or require, the
creation or imposition of any lien, charge, security interest or other
encumbrance on any of its properties or revenues.
6.3 ADDITIONAL EVENTS OF DEFAULT
The parties hereto acknowledge, confirm and agree that the failure of any
of Borrowers or Guarantors to comply with the covenants, conditions and
agreements contained herein or in any other agreement, document or instrument at
any time executed and/or delivered by any of Borrowers or Guarantors with, to or
in favor of Lender shall constitute an Event of Default under the Loan Agreement
and the other Financing Agreements. In the event that any person to whom any of
Borrowers and Guarantors is indebted (other than Cargill Financial Services
Corporation) shall at any time exercise any of its rights or remedies against
any of Borrowers or Guarantors or their respective properties or assets or
Cargill Financial Services Corporation shall obtain a judgment against any of
Borrowers or Guarantors or their respective assets or properties or shall
commence any legal proceeding against any of Borrowers or Guarantors or shall
take any other action to seek to collect Indebtedness of Borrowers or Guarantors
payable to it or against any assets or properties of any of Borrowers or
Guarantors, except for the commencement of a suit for the collection of the
Indebtedness due to Cargill Financial Services Corporation evidenced by the
Senior Notes, any such event shall constitute an Event of Default (and shall not
in any event be deemed to constitute an Existing Default).
SECTION 7. CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT
The effectiveness of the terms and provisions of Section 3.2 of this
Agreement shall be subject to the receipt by Lender of each of the following, in
form and substance satisfactory to Lender:
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(a) an original of this Agreement, duly authorized, executed and
delivered by Borrowers and Guarantors;
(b) an original of the Validity Guaranty by Delford M. Smith in favor
of Lender, duly executed and delivered by Delford M. Smith.
SECTION 8. PROVISIONS OF GENERAL APPLICATION
8.1 EFFECT OF THIS AGREEMENT
Except as modified pursuant hereto, no other changes or modifications to
the Financing Agreements are intended or implied and in all other respects the
Financing Agreements are hereby specifically ratified, restated and confirmed by
all parties hereto as of the effective date hereof. To the extent of conflict
between the terms of this Agreement and the other Financing Agreements, the
terms of this Agreement shall control. The Loan Agreement and this Agreement
shall be read and construed as one agreement.
8.2 COSTS AND EXPENSES
Borrowers and Guarantors absolutely and unconditionally agree to pay to the
Lender, on demand by the Lender at any time and as often as the occasion
therefor may require, whether or not all or any of the transactions contemplated
by this Agreement are consummated: (a) all fees and disbursements of any
counsel to Lender in connection with the preparation, negotiation, execution, or
delivery of this Agreement and any agreements delivered in connection with the
transactions contemplated hereby and (b) expenses which shall at any time be
incurred or sustained by the Lender or any of its directors, officers, employees
or agents as a consequence of or in any way in connection with the preparation,
negotiation, execution, or delivery of this Agreement and any agreements
prepared, negotiated, executed or delivered in connection with the transactions
contemplated hereby.
8.3 FURTHER ASSURANCES
The parties hereto shall execute and deliver such additional documents and
take such additional action as may be necessary or desirable to effectuate the
provisions and purposes of this Agreement.
8.4 RELIEF FROM STAY
Each of Borrowers and Guarantors agrees that in the event any of Borrowers
or Guarantors commences or has commenced against it any proceeding under the
U.S. Bankruptcy Code or any similar statute, Lender shall be entitled to relief
from any
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automatic stay imposed by Section 362 of the U.S. Bankruptcy Code or otherwise
on or against the exercise of the rights and remedies otherwise available to
Lender.
8.5 MERGER
This Agreement and the documents executed in connection herewith represent
the entire expression of the agreement of Borrowers, Guarantors and Lender
regarding the matters set forth herein. No modification, rescission, waiver,
release or amendment of any provision of this Agreement shall be made, except by
a written agreement signed by Borrowers and a duly authorized officer of Lender,
except for any extension of the Maturity Date which shall only require execution
by a duly authorized officer of Lender.
8.6 GOVERNING LAW
The rights and obligations hereunder of each of the parties hereto shall be
governed by and interpreted and determined in accordance with the internal
substantive laws of the State of New York.
8.7 BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors and assigns.
8.8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties made in this Agreement or any other
document furnished in connection with this Agreement shall survive the execution
and delivery of this Agreement and the other documents, and no investigation by
Lender or any closing shall affect the representations and warranties or the
right of Lender to rely upon them.
8.9 SEVERABILITY
Any provision of this Agreement held by a court of competent jurisdiction
to be invalid or unenforceable shall not impair or invalidate the remainder of
this Agreement and the effect thereof shall be confirmed to the provision so
held to be invalid or unenforceable.
8.10 REVIEWED BY ATTORNEYS
Each of Borrowers and Guarantors represents and warrants that it
(a) understands fully the terms of this Agreement and the consequences of the
execution and delivery of this Agreement, (b) has been afforded an opportunity
to
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have this Agreement reviewed by, and to discuss this Agreement and document
executed in connection herewith with, such attorneys and other persons as each
of Borrowers and Guarantors may wish, and (c) has entered into this Agreement
and executed and delivered all documents in connection herewith of its own free
will and accord and without threat, duress or other coercion of any kind by any
person. The parties hereto acknowledge and agree that neither this Agreement
nor the other documents executed pursuant hereto shall be construed more
favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiation and preparation of this Agreement and the other documents
executed pursuant hereto or in connection herewith.
8.11 MUTUAL WAIVER OF RIGHT OF JURY TRIAL
LENDER, BORROWERS AND GUARANTORS EACH HEREBY WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO: (A) THIS AGREEMENT, OR ANY OF THE AGREEMENTS, INSTRUMENTS OR
DOCUMENTS REFERRED TO HEREIN; OR (B) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR
AGREEMENT BETWEEN OR AMONG THEM; (C) ANY CONDUCT, ACTS OR OMISSIONS OF LENDER OR
ANY OF BORROWERS OR GUARANTORS OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH THEM; IN EACH OF THE
FOREGOING CASES, WHETHER IN CONTRACT OR TORT OR OTHERWISE.
8.12 COUNTERPARTS
This Agreement may be executed in any number of counterparts, but all of
such counterparts shall together constitute but one and the same agreement. In
making proof of this Agreement, it shall not be necessary to produce or account
for more than one counterpart thereof signed by each of the parties hereto.
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IN WITNESS WHEREOF, this Agreement is executed and delivered as of the day
and year first above written.
EVERGREEN INTERNATIONAL AVIATION, INC.
EVERGREEN INTERNATIONAL AIRLINES, INC.
By:
--------------------------------------
Title: ____________________________ of each
ACKNOWLEDGED AND AGREED:
EVERGREEN AVIATION GROUND LOGISTICS ENTERPRISES, INC.
EVERGREEN HELICOPTERS, INC.
EVERGREEN AIRCRAFT SALES AND LEASING CO.
EVERGREEN AGRICULTURAL ENTERPRISES, INC.
EVERGREEN AIR CENTER, INC.
EVERGREEN EQUITY, INC.
EVERGREEN HELICOPTERS OF ALASKA, INC.
EVERGREEN HELICOPTERS INTERNATIONAL, INC.
E&K PROPERTIES, INC.
AMERICAN WORLD AVIATION, INC.
By:
--------------------------------
Title: ___________________________ of each
AGREED:
CONGRESS FINANCIAL CORPORATION
By:
________________________________
Title:
_____________________________
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