Exhibit
10.11


 




 





 


 


CREDIT AGREEMENT


 


Dated as of September 27, 2007


 


among


 


ERICKSON AIR-CRANE INCORPORATED


 


as the Borrower,


 


KEYBANK NATIONAL ASSOCIATION,


 


as Administrative Agent, Lender, Swing Line Lender, and L/C Issuer


 


and


 


the Other Lenders Party Hereto


 


 




 





 

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  I. DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.01 

  	
  Defined
  Terms

  	
   

  	
  1

  
	
  1.02 

  	
  Other
  Interpretive Provisions

  	
   

  	
  28

  
	
  1.03 

  	
  Accounting
  Terms

  	
   

  	
  29

  
	
  1.04 

  	
  UCC
  Terms

  	
   

  	
  29

  
	
  1.05 

  	
  Rounding

  	
   

  	
  29

  
	
  1.06 

  	
  References
  to Agreements and Laws

  	
   

  	
  29

  
	
  1.07 

  	
  Letter
  of Credit Amounts

  	
   

  	
  30

  
	
  1.08 

  	
  Exchange
  Rates; Currency Equivalents

  	
   

  	
  30

  
	
  1.09 

  	
  Additional
  Alternative Currencies

  	
   

  	
  30

  
	
  1.10 

  	
  Redenomination
  of Certain Alternative Currencies

  	
   

  	
  31

  
	
  1.11 

  	
  Conflicts

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  II. THE COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  2.01 

  	
  Committed
  Loans

  	
   

  	
  31

  
	
  2.02 

  	
  Borrowings,
  Conversions and Continuations of Committed Loans

  	
   

  	
  33

  
	
  2.03 

  	
  Letter
  of Credit Facility

  	
   

  	
  35

  
	
  2.04 

  	
  Procedures
  for Issuance and Amendment of All Letters of Credit

  	
   

  	
  36

  
	
  2.05 

  	
  Swing
  Line Loans

  	
   

  	
  41

  
	
  2.06 

  	
  Voluntary
  Prepayment of Loans; Other Prepayment

  	
   

  	
  44

  
	
  2.07 

  	
  Mandatory
  Prepayment of Loans

  	
   

  	
  45

  
	
  2.08 

  	
  Voluntary
  Reduction or Termination of Commitments

  	
   

  	
  46

  
	
  2.09 

  	
  Mandatory
  Reduction in Commitments

  	
   

  	
  46

  
	
  2.10 

  	
  Repayment
  of Loans

  	
   

  	
  46

  
	
  2.11 

  	
  Interest

  	
   

  	
  47

  
	
  2.12 

  	
  Fees

  	
   

  	
  47

  
	
  2.13 

  	
  Computation
  of Interest and Fees

  	
   

  	
  47

  
	
  2.14 

  	
  Evidence
  of Debt

  	
   

  	
  49

  
	
  2.15 

  	
  Payments
  Generally

  	
   

  	
  49

  
	
  2.16 

  	
  Sharing
  of Payments

  	
   

  	
  51

  
	
  2.17 

  	
  Security
  and Guaranty

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  III. TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  3.01 

  	
  Taxes

  	
   

  	
  52

  
	
  3.02 

  	
  Illegality

  	
   

  	
  54

  
	
  3.03 

  	
  Inability
  to Determine Rates

  	
   

  	
  54

  
	
  3.04 

  	
  Increased
  Cost and Reduced Return; Capital Adequacy; Reserves on Eurocurrency Rate
  Loans

  	
   

  	
  55

  
	
  3.05 

  	
  Funding
  Losses

  	
   

  	
  56

  
	
  3.06 

  	
  Survival

  	
   

  	
  57

  
	
  3.07 

  	
  Replacement
  of Lenders

  	
   

  	
  57

  



 


i

















 


	
  IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  4.01 

  	
  Conditions
  of Initial Credit Extension

  	
   

  	
  58

  
	
  4.02 

  	
  Conditions
  to All Credit Extensions and Conversions and Continuations

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  V. REPRESENTATIONS AND WARRANTIES

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  5.01 

  	
  Existence,
  Qualification and Power; Compliance with Laws

  	
   

  	
  61

  
	
  5.02 

  	
  Authorization;
  No Contravention

  	
   

  	
  62

  
	
  5.03 

  	
  Governmental
  Authorization; Other Consents

  	
   

  	
  62

  
	
  5.04 

  	
  Binding
  Effect

  	
   

  	
  62

  
	
  5.05 

  	
  Financial
  Statements; No Material Adverse Effect

  	
   

  	
  62

  
	
  5.06 

  	
  Litigation

  	
   

  	
  63

  
	
  5.07 

  	
  No
  Default

  	
   

  	
  63

  
	
  5.08 

  	
  Ownership
  of Property; Liens

  	
   

  	
  63

  
	
  5.09 

  	
  Environmental
  Compliance

  	
   

  	
  63

  
	
  5.10 

  	
  Insurance

  	
   

  	
  63

  
	
  5.11 

  	
  Taxes

  	
   

  	
  63

  
	
  5.12 

  	
  ERISA
  Compliance

  	
   

  	
  64

  
	
  5.13 

  	
  Subsidiaries

  	
   

  	
  64

  
	
  5.14 

  	
  Margin
  Regulations; Investment Company Act

  	
   

  	
  64

  
	
  5.15 

  	
  Intellectual
  Property; Etc.

  	
   

  	
  64

  
	
  5.16 

  	
  Solvency

  	
   

  	
  65

  
	
  5.17 

  	
  Disclosure

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  VI. AFFIRMATIVE COVENANTS

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  6.01 

  	
  Financial
  Statements

  	
   

  	
  65

  
	
  6.02 

  	
  Certificates;
  Other Information

  	
   

  	
  66

  
	
  6.03 

  	
  Notices

  	
   

  	
  66

  
	
  6.04 

  	
  Payment
  of Obligations

  	
   

  	
  66

  
	
  6.05 

  	
  Preservation
  of Existence, Etc.

  	
   

  	
  67

  
	
  6.06 

  	
  Maintenance
  of Properties

  	
   

  	
  67

  
	
  6.07 

  	
  Maintenance
  of Insurance

  	
   

  	
  67

  
	
  6.08 

  	
  Compliance
  with Laws

  	
   

  	
  67

  
	
  6.09 

  	
  Books
  and Records

  	
   

  	
  68

  
	
  6.10 

  	
  Inspection
  Rights

  	
   

  	
  68

  
	
  6.11 

  	
  Compliance
  with ERISA

  	
   

  	
  68

  
	
  6.12 

  	
  Subsidiaries;
  Additional Guarantors; Pledge of Capital Stock

  	
   

  	
  68

  
	
  6.13 

  	
  Intellectual
  Property

  	
   

  	
  69

  
	
  6.14 

  	
  Use
  of Proceeds

  	
   

  	
  69

  
	
  6.15 

  	
  Further
  Assurances

  	
   

  	
  69

  
	
  6.16  

  	
  Citizenship

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  VII. NEGATIVE COVENANTS

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  7.01 

  	
  Liens

  	
   

  	
  70

  
	
  7.02 

  	
  Investments

  	
   

  	
  72

  
	
  7.03 

  	
  Indebtedness

  	
   

  	
  74

  



 


ii

















 


	
  7.04 

  	
  Fundamental
  Changes

  	
   

  	
  76

  
	
  7.05 

  	
  Dispositions

  	
   

  	
  76

  
	
  7.06 

  	
  Lease
  Obligations

  	
   

  	
  77

  
	
  7.07 

  	
  Restricted
  Payments

  	
   

  	
  78

  
	
  7.08 

  	
  ERISA

  	
   

  	
  78

  
	
  7.09 

  	
  Change
  in Nature of Business

  	
   

  	
  78

  
	
  7.10 

  	
  Transactions
  with Affiliates

  	
   

  	
  79

  
	
  7.11 

  	
  Burdensome
  Agreements

  	
   

  	
  79

  
	
  7.12 

  	
  Margin
  Regulations

  	
   

  	
  80

  
	
  7.13 

  	
  Financial
  Covenants

  	
   

  	
  80

  
	
  7.14 

  	
  Maximum
  Capital Expenditures

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII. EVENTS OF DEFAULT AND REMEDIES

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  
	
  8.01 

  	
  Events
  of Default

  	
   

  	
  82

  
	
  8.02 

  	
  Remedies
  Upon Event of Default

  	
   

  	
  85

  
	
  8.03 

  	
  Application
  of Funds

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  
	
  IX. ADMINISTRATIVE AGENT

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  
	
  9.01 

  	
  Appointment
  and Authorization of Administrative Agent

  	
   

  	
  87

  
	
  9.02 

  	
  Delegation
  of Duties

  	
   

  	
  88

  
	
  9.03 

  	
  Liability
  of Administrative Agent

  	
   

  	
  88

  
	
  9.04 

  	
  Reliance
  by Administrative Agent

  	
   

  	
  88

  
	
  9.05 

  	
  Notice
  of Default

  	
   

  	
  89

  
	
  9.06 

  	
  Credit
  Decision; Disclosure of Information by Administrative Agent

  	
   

  	
  89

  
	
  9.07 

  	
  Indemnification
  of Administrative Agent

  	
   

  	
  90

  
	
  9.08 

  	
  Administrative
  Agent in its Individual Capacity

  	
   

  	
  90

  
	
  9.09 

  	
  Successor
  Administrative Agent

  	
   

  	
  90

  
	
  9.10 

  	
  Collateral
  and Guaranty Matters

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  
	
  X. MISCELLANEOUS

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  
	
  10.01 

  	
  Amendments,
  Etc.

  	
   

  	
  92

  
	
  10.02 

  	
  Notices
  and Other Communications; Facsimile Copies

  	
   

  	
  93

  
	
  10.03 

  	
  No
  Waiver; Cumulative Remedies

  	
   

  	
  94

  
	
  10.04 

  	
  Attorney
  Costs, Expenses and Taxes

  	
   

  	
  94

  
	
  10.05 

  	
  Indemnification
  by the Borrower

  	
   

  	
  94

  
	
  10.06 

  	
  Payments
  Set Aside

  	
   

  	
  95

  
	
  10.07 

  	
  Successors
  and Assigns; Lender Assignment

  	
   

  	
  95

  
	
  10.08 

  	
  Confidentiality

  	
   

  	
  99

  
	
  10.09 

  	
  Set-off

  	
   

  	
  99

  
	
  10.10 

  	
  Interest
  Rate Limitation

  	
   

  	
  100

  
	
  10.11 

  	
  Counterparts

  	
   

  	
  100

  
	
  10.12 

  	
  Integration

  	
   

  	
  100

  
	
  10.13 

  	
  Survival
  of Representations and Warranties

  	
   

  	
  100

  
	
  10.14 

  	
  Severability

  	
   

  	
  101

  
	
  10.15 

  	
  USA
  Patriot Act Notice

  	
   

  	
  101

  
	
  10.16 

  	
  No
  Foreign Control

  	
   

  	
  101

  



 


iii

















 


	
  10.17 

  	
  Governing
  Law

  	
   

  	
  101

  
	
  10.18 

  	
  Waiver
  of Right to Trial by Jury

  	
   

  	
  102

  
	
  10.19 

  	
  Forced
  Place Insurance

  	
   

  	
  102

  
	
  10.20 

  	
  Time
  of the Essence

  	
   

  	
  103

  
	
  10.21 

  	
  Judgment
  Currency

  	
   

  	
  103

  



 


SCHEDULES


 


	
  1.01

  	
  Air-Cranes, Real Estate

  
	
  2.01

  	
  Commitments
  and Pro Rata Shares

  
	
  5.06

  	
  Litigation

  
	
  5.09

  	
  Environmental
  Matters 

  
	
  5.10

  	
  Property
  Insurance

  
	
  5.13

  	
  Subsidiaries
  and Other Equity Investments

  
	
  5.15

  	
  Intellectual
  Property 

  
	
  7.01

  	
  Existing
  Liens

  
	
  7.02

  	
  Existing
  Investments 

  
	
  7.03

  	
  Existing
  Indebtedness 

  
	
  7.06

  	
  Existing
  Leases

  
	
  7.10

  	
  Transactions
  with Affiliates

  
	
  7.11

  	
  Existing
  Burdensome Agreement

  
	
  10.02

  	
  Addresses
  for Notices

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
   

  	
  Form of

  
	
  A-1

  	
  Committed
  Loan Notice

  
	
  A-2

  	
  Swing
  Line Loan Notice

  
	
  B-1

  	
  Committed
  Loan Note

  
	
  B-2

  	
  Swing
  Line Note

  
	
  C

  	
  Guaranty
  Agreement

  
	
  D-1

  	
  Borrower
  Security Agreement

  
	
  D-2

  	
  Deed
  of Trust

  
	
  D-3

  	
  Aircraft
  and Flight Equipment Security Agreement

  
	
  D-4

  	
  Assignment
  of Type Certificate

  
	
  D-5

  	
  Assignment
  of Production Certificate

  
	
  E

  	
  Stock
  Pledge Agreement

  
	
  F

  	
  Borrower
  Pledge Agreement

  
	
  G

  	
  Compliance
  Certificate

  
	
  H

  	
  Assignment
  and Assumption

  
	
  I

  	
  Opinion
  of Counsel Borrower/EAC Shareholder

  
	
  J-1

  	
  First
  Lien/Second Lien Intercreditor Agreement

  
	
  J-2

  	
  Aircraft
  Intercreditor Agreement

  
	
  J-3

  	
  Revolving
  Lender/Term Lender Intercreditor Agreement

  



 


iv

















 


CREDIT AGREEMENT


 


This
CREDIT AGREEMENT (“Agreement”) is made and entered into as September 27,
2007, by and among ERICKSON AIR-CRANE INCORPORATED, a Delaware corporation (the
“Borrower”), KEYBANK NATIONAL ASSOCIATION, a national banking
association, together with lenders from time to time a party hereto,
collectively, the “Lenders” and each individually a “Lender”),
KEYBANK NATIONAL ASSOCIATION, a national banking association, as Swing Line
Lender, KEYBANK NATIONAL ASSOCIATION, a national banking association, as L/C
Issuer, and KEYBANK NATIONAL ASSOCIATION, a national banking association as
administrative agent for Lenders (in such capacity, the “Administrative Agent”).


 


RECITALS


 


Borrower
has requested that Lenders provide a revolving credit facility in the amount of
$40,000,000 and a standby letter of credit facility in the amount of
$25,000,000, and Lenders are willing to do so on the terms and conditions set
forth herein;


 


NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:


 


I.

DEFINITIONS AND ACCOUNTING TERMS


 


1.01 Defined Terms. As used in this Agreement,
the following terms shall have the meanings set forth below:


 


“Account”
means all of the Borrower’s accounts, as such term is defined in the Uniform
Commercial Code of the State of New York (“UCC”), including each and
every right of the Borrower to the payment of money, whether such right to
payment now exists or hereafter arises, whether such right to payment arises
out of a sale, lease or other disposition of goods or other property, out of a
rendering of services, out of a loan, out of the overpayment of taxes or other
liabilities, or otherwise arises under any contract or agreement, whether such
right to payment is created, generated or earned by the Borrower or by some
other person who subsequently transfers such person’s interest to the Borrower,
whether such right to payment is or is not already earned by performance, and
howsoever such right to payment may be evidenced, together with all other
rights and interests (including all Liens) which the Borrower may at any time
have by law or agreement against any account debtor or other obligor obligated
to make any such payment or against any property of such account debtor or
other obligor; all including but not limited to all present and future
accounts, contract rights, loans and obligations receivable, chattel papers,
bonds, notes and other debt instruments, tax refunds and rights to payment in
the nature of general intangibles.


 


“Act”
means the Federal Aviation Act of 1958, as amended.


 


1






 










 


“Adjusted
EBITDA” means, for any period, for the Borrower, Adjusted Net Income plus,
to the extent deducted in determining Net Income, interest, taxes, depreciation
and amortization, plus the sum of: (i) any expense or loss associated with
(A) any proposed or completed equity or debt financing on or prior to the
Closing Date and (B) the early retirement, extinguishment or refinancing
of debt, and (C) bonuses paid with respect to the completion of any of the
foregoing, (ii) any fees, expenses or charges deducted in computing
Adjusted Net Income which have been determined by management of Borrower, which
determination is acceptable to the Administrative Agent, to be non-recurring by
virtue of changes in Borrower’s method of operations pursuant to its cost reduction
or restructuring programs, (iii) noncash charges resulting from the
application of purchase accounting, (iv) noncash expenses resulting from
the granting of stock options, restricted stock or restricted stock unit awards
under equity compensation programs solely with respect to Capital Stock, (v) transaction
costs and expenses incurred in connection with Permitted Acquisitions, (vi) transaction
costs incurred in connection with the transactions consummated during the last
12 months prior to and including the Closing Date and (vii) any other
adjustments which are mutually agreed upon.


 


“Adjusted
Net Income” means, for any period, for the Borrower and Subsidiaries on a
consolidated basis, net income excluding (i) extraordinary gains and
extraordinary losses, (ii) the effect of all non-cash currency translation
adjustments (these “currency translation adjustments” shall exclude from
Adjusted Net Income all income statement non-cash gains and losses from
non-speculative, unbalanced hedge positions), (iii) involuntary conversion
gains and losses, (iv) gains and losses from the disposal of property,
plant and equipment, (v) any accretion on preferred stock, and (vi) Management
Fees to the extent deducted from net income.


 


“Administrative
Agent” means KeyBank, in its capacity as administrative agent under any of
the Loan Documents, or any successor administrative agent.


 


“Administrative
Agent’s Office” means, with respect to any currency, the Administrative
Agent’s address and, as appropriate, account as set forth in Schedule 10.02
with respect to such currency, or such other address or account with respect to
such currency as the Administrative Agent may from time to time notify to the
Borrower and the Lenders in writing.


 


“Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified. “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “Controlling”
and “Controlled” have meanings correlative thereto. Without limiting the
generality of the foregoing, in determining whether a Person is Controlled by a
Loan Party, such Person shall be deemed to be Controlled by a Loan Party
if such Loan Party possesses, directly or indirectly, power to vote fifty
percent (50%) or more of the securities having ordinary voting power for the
election of directors, managing general partners or the equivalent.


 


“Agent/Arranger
Fee Letter” means the letter agreement dated August 3, 2007, among
Borrower, Administrative Agent and Arranger.


 


2

















 


“Agent-Related
Persons” means the Administrative Agent (including any successor
administrative agent), together with their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons
and Affiliates.


 


“Aggregate
Commitments” has the meaning set forth in the definition of “Commitment.” 


 


“Agreement”
means this Credit Agreement.


 


“Agreement
Currency” has the meaning given in Section 10.21.


 


“Aircranes”
means, individually and collectively, Borrower’s now owned and hereafter
acquired rotary wing aircraft and heavy-lift crane equipment as listed in Schedule
1.01 hereto.


 


“Aircraft
Appraisal Report” means, collectively, the opinion of value letter dated August 3,
2007, by HeliValue $, Inc. to Erickson Air-Crane Inc., setting forth an
OLV (as defined therein) of $268,740,000, Summary Appraisal: fleet of 18
helicopters prepared August 3, 2007, with an effective date of June 24,
2007, and letter dated August 9, 2007, by HeliValue $, Inc. to Key
Equipment Finance.


 


“Aircraft
Intercreditor Agreement” means an intercreditor agreement between
Administrative Agent and Term Lender, and acknowledged by Borrower with respect
to the Permitted Equipment Financing substantially in the form of Exhibit J-2
hereto.


 


“Aircraft
Security Agreement” means the Aircraft and Flight Equipment Security
Agreement by Borrower in favor of Administrative Agent in the form of Exhibit D-3
hereto.


 


“Alternative
Currency” means each of Euro, Canadian dollars, Australian dollars and each
other lawful currency (other than Dollars) that is freely available and freely
transferable and convertible into Dollars and which is approved by all the
Lenders in accordance with Section 1.09.


 


“Alternative
Currency Equivalent” means, at any time, with respect to any amount
denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Administrative Agent at such time on
the basis of the Spot Rate (determined in respect of the most recent
Revaluation Date) for the purchase of such Alternative Currency with Dollars.


 


“Alternative
Currency Sublimit” means an amount equal to the lesser of the Aggregate
Commitments and $10,000,000. The Alternative Currency Sublimit is part of, and
not in addition to, the Aggregate Commitments.


 


“Applicable
Margin” means, on any date, the following percentages per annum set forth
below, based upon the Funded Debt to Adjusted EBITDA as set forth in the most
recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a):


 


3

















 


	
  Borrower’s

  Total Funded

  Debt to

  Adjusted

  EBITDA Level

  	
   

  	
  Total Funded

  Debt to

  Adjusted

  EBITDA

  Ratio

  	
   

  	
  Margin For

  Base Rate Loans

  	
   

  	
  Margin For

  LIBOR Rate Loans

  	
   

  	
  Margin For

  Unused

  Commitment Fee

  
	
  Level I

  	
   

  	
  Greater than or equal to 4.00:1

  	
   

  	
  25 bps

  	
   

  	
  275 bps

  	
   

  	
  50 bps

  
	
  Level II

  	
   

  	
  Greater than 3.00:1 but less than 4.00:1

  	
   

  	
  0 bps

  	
   

  	
  250 bps

  	
   

  	
  37.5 bps

  
	
  Level III

  	
   

  	
  Less than or equal to 3.00:1

  	
   

  	
  0 bps

  	
   

  	
  200 bps

  	
   

  	
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Any
increase or decrease in the Applicable Margin resulting from a change in the
Funded Debt to Adjusted EBITDA Ratio shall become effective as of the first day
of the month immediately following the date a Compliance Certificate is
scheduled to be delivered (for example, the Compliance Certificate for March 31,
2008, is scheduled to be delivered May 15, 2008; therefore, the Applicable
Margin rate adjustment would occur beginning June 1, 2008), pursuant to Section 6.02(a);
provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then Pricing Level I shall
apply as of the first day of the month following the due date of such
Compliance Certificate through the date that is three Business Days after the
date that such Compliance Certificate is delivered. The Applicable Margin in
effect from the Closing Date through delivery of the September 30, 2007
company prepared financial statement to Administrative Agent, shall be
determined based upon Pricing Level I.


 


“Applicable
Time” means, with respect to any borrowings and payments in Alternative
Currencies, the local times in the place of settlement for such Alternative
Currencies as may be determined by the Administrative Agent to be necessary for
timely settlement on the relevant date in accordance with normal banking
procedures in the place of payment.


 


“Appraisal
Value” means, for an Eligible Aircrane, the Orderly Liquidation Value of
such Aircrane.


 


“Approved
Fund” means has the meaning given in Section 10.7(h).


 


“Arranger”
means KeyBank National Association, in its capacity as sole lead arranger and
sole book manager.


 


“Assignment
of Production Certificate” means an Assignment of Production Certificate in
the form of Exhibit D-5 hereto.


 


“Assignment
of Type Certificate” means an Assignment of Type Certificate in the form of
Exhibit D-4 hereto.


 


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“Assignment
and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit H.


 


“Attorney
Costs” means and includes all reasonable and documented fees and
disbursements of any law firm or other external counsel.


 


“Attributable
Indebtedness” means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease
that would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a capital lease.


 


“Audited
Financial Statements” means the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the fiscal year ended December 31,
2006, prepared in accordance with GAAP, and the related consolidated statements
of income or operations, shareholders’ equity and cash flows for such fiscal
year of the Borrower and its Subsidiaries.


 


“Base
Rate” means for any day a fluctuating rate per annum equal to (a) the
Applicable Margin plus the higher of (i) the Federal Funds Rate plus one-half of
one percent (0.5%) and (ii) the “prime rate” of interest of KeyBank
National Association announced on such day, or if not announced by KeyBank
National Association on such day, then the prime rate most recently announced
by KeyBank National Association. Any change in such rate shall take effect at
the opening of business on the day such change is announced.


 


“Base
Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.


 


“Base
Rate Loan” means a Loan that bears interest based on the Base
Rate. All Base Rate Loans shall be denominated in Dollars.


 


“Borrower” means Erickson
Air-Crane Incorporated. 


 


“Borrower
Account” has the meaning given in Section 2.13(c).


 


“Borrower
Pledge Agreement” means the Pledge Agreement made by the Borrower in
favor of the Collateral Agent for the benefit of Administrative Agent on behalf
of the Lenders, and Term Lender, substantially in the form of Exhibit F.


 


“Borrower
Security Agreement” means each of (a) the Security Agreement made
by the Borrower in favor of the Administrative Agent on behalf of the Lenders,
substantially in the form of Exhibit D-1, (b) the
Deed of Trust in favor of First American Title Insurance Company of Oregon, an
Oregon corporation, as Trustee, and Administrative Agent as Beneficiary,
substantially in the form of Exhibit D-2, (c) the
Aircraft and Flight Equipment Security Agreement in favor of Administrative
Agent covering the Retained Aircraft and Other Aircraft, (d) the
Assignment of Type Certificate in favor of Administrative Agent in the form of Exhibit D-4, (e) the
Assignment of Production Certificate in favor of Administrative Agent in the
form of Exhibit D-5, (f) the Collateral
Assignment of Leases and Contracts in favor of


 


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Administrative
Agent in the form of Exhibit D-6. “Borrower Security Agreements”
means all of them.


 


“Borrowing”
means a Committed Borrowing or a Swing Line Borrowing, as the context may
require.


 


“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in Cleveland, Ohio, with respect to Obligations denominated in Dollars,
and (a) if such day relates to any LIBOR Rate Loan denominated in a
currency other than Euro, means any such day on which dealings in deposits in
the relevant currency are conducted by and between banks in London or other
applicable offshore interbank markets for such currency or (b) if such day
relates to any LIBOR Rate Loan denominated in Euro, means a TARGET Day.


 


“Capital
Expenditures” means, for any period, all expenditures of the Borrower
during such period determined on a consolidated basis that, in accordance with
GAAP, are or should be included in “purchase of property and equipment,
goodwill, rights of way, and other long-term tangible assets or a similar
tangible or intangible property account,” or similar items reflected in the
consolidated statement of cash flows of the Borrower.


 


“Capital
Stock” shall mean (i) in the case of a corporation, capital stock, (ii) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents of capital stock, (iii) in the
case of a partnership, partnership interests (whether general or limited), (iv) in
the case of a limited liability company, membership interests and (v) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person, in each case however designated and whether or not such shares,
interests, participations, rights, or other equivalents have voting rights.


 


“Cash”
means money, currency or a credit balance in any demand or Deposit Account. 


 


“Cash
Collateral” means Cash pledged to Administrative Agent to secure
Obligations.


 


“Cash
Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, Cash pursuant to documentation in form and
substance reasonably satisfactory to the Administrative Agent and the L/C
Issuer (which documents are hereby consented to by the Lenders). Derivatives of
such term shall have corresponding meaning.


 


“Cash
Equivalents” means, as at any date of determination, (a) marketable
securities or evidence of debt (i) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government or (ii) issued
by any agency of the United States the obligations of which are backed by the
full faith and credit of the United States, in each case maturing within one
year after such date; (b) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof, in each case maturing within one year
after such date and having, at the time of the acquisition thereof, a rating of
at least A-1 from S&P or at least P-1 from Moody’s; (c) commercial
paper maturing no more than one year from the date of creation thereof and 


 


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having,
at the time of the acquisition thereof, a rating of at least A-1 from S&P
or at least P-1 from Moody’s; (d) certificates of deposit or bankers’
acceptances maturing within one year after such date and issued or accepted by
any Lender or by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia that (i) is
at least “adequately capitalized” (as defined in the regulations of its primary
Federal banking regulator) and (ii) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000; (e) shares of any money market
mutual fund that (i) has substantially all of its assets invested
continuously in any of the types of investments referred to in clauses (a) through
(d) above, (ii) has net assets of not less than $500,000,000, and (iii) has
the highest rating obtainable from either S&P or Moody’s; and (f) in
the case of Foreign Subsidiaries, substantially similar foreign equivalents of
those Cash Equivalents described in clauses (a) through (e) above.


 


“Cash
Interest Charges” means, for any period, for the Borrower, the sum of (a) all
interest, premium payments, utilization fees and nonusage fees (but not
including any arrangement or agency fees or any upfront fees paid to the
Administrative Agent or to the Lenders), charges and related expenses of the
Borrower in connection with borrowed money (including capitalized interest) or
in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, plus (b) the
portion of rent expense of the Borrower with respect to such period under
capital leases that is treated as interest in accordance with GAAP; in each
case to the extent paid by the Borrower in Cash during such period.


 


“Change
of Control” means, with respect to any Person, an event or series of events
by which:


 


(a)           any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended, but excluding any employee
benefit plan of such person or its subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or administrator of
any such plan) (excluding the Sponsors and EAC Shareholders), becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934), directly or indirectly, of more than fifty percent (50%) of the
equity securities of such Person entitled to vote for members of the board of
directors or equivalent governing body of such Person on a fully-diluted basis;
or


 


(b)           a
majority of the members of the board of directors or other equivalent governing
body of such Person cease to be composed of individuals who were appointed by
the Sponsors.


 


“Cleveland”
means Cleveland, Ohio.


 


“Closing
Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(b), waived by the Person entitled to receive
the applicable payment).


 


“Code”
means the Internal Revenue Code of 1986, as amended.


 


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“Collateral”
means all real and personal property and interests in property and proceeds
thereof now owned or hereafter acquired by the Borrower and any Guarantor
including without limitation, accounts receivable, inventory, Aircrane parts,
supplies, contract rights, general intangibles, Capital Stock, equipment,
Eligible Aircranes, Other Aircraft, all other aircraft, intellectual property,
Production Certificates, Type Certificates, Supplemental Type Certificates, and
aircraft in or upon which a Lien now or hereafter exists in favor of the
Lenders, or the Administrative Agent on behalf of the Lenders, whether under
this Agreement or under any other documents executed by any such Person and
delivered to the Administrative Agent or the Lenders, as the case may be
(exclusive of Financed Aircranes and other personal property of Borrower
securing the Permitted Equipment Financing).


 


“Collateral
Agent” means Administrative Agent as collateral agent under the Revolving
Lender/Term Lender Intercreditor Agreement, and any successor collateral agent
thereunder.


 


“Collateral
Documents” means, collectively, (i) the Borrower Security Agreement,
the Deed of Trust, the Aircraft Security Agreement, the Assignment of Type
Certificate, the Assignment of Production Certificate, the Stock Pledge
Agreement, the Borrower Pledge Agreement and all other security agreements,
control agreements, mortgages, deeds of trust, patent and trademark
assignments, lease assignments, guarantees and other similar agreements between
the Borrower or any Guarantor and the Lenders or the Administrative Agent for
the benefit of the Lenders pursuant to which a security interest is granted or
obligations guarantied now or hereafter delivered to the Lenders or the
Administrative Agent pursuant to or in connection with the transactions
contemplated hereby (including such documents as the Administrative Agent shall
deem appropriate pursuant to Section 6.12), and all financing
statements (or comparable documents now or hereafter filed in accordance with
the Uniform Commercial Code or comparable law) and patent, trademark and
copyright filings against any Loan Party as debtor in favor of the Lenders or
the Administrative Agent as secured party for the benefit of the Lenders, and (ii) any
amendments, supplements, modifications, renewals, replacements, consolidations,
substitutions and extensions of any of the foregoing.


 


“Commitment”
means, as to each Lender, its obligation to (a) make Committed Loans to
the Borrower pursuant to Section 2.01, (b) purchase
participations in L/C Sublimit Obligations, (c) purchase participations in
Letter of Credit Facility Obligations, and (d) purchase participations in
Swing Line Loans, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01,
as such amount may be reduced or adjusted from time to time in accordance with
this Agreement and Section 2.07 (collectively, the “Aggregate
Commitments”).


 


“Commitment
Termination Date” means October 1, 2012.


 


“Committed
Borrowing” means a borrowing consisting of simultaneous Committed Loans of
the same Type, in the same currency and having the same Interest Period made by
each of the Lenders pursuant to Section 2.01.


 


“Committed
Loan” has the meaning specified in Section 2.01.


 


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“Committed
Loan Note” means a promissory note made by the Borrower in favor of a
Lender evidencing Committed Loans made by such Lender, substantially in the
form of Exhibit B-1.


 


“Committed
Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a
continuation of Committed Loans as the same Type, pursuant to Section 2.02(a),
which, if in writing, shall be substantially in the form of Exhibit A-1.


 


“Compensation
Period” has the meaning given in Section 2.14(d)(ii).


 


“Compliance
Certificate” means a certificate substantially in the form of Exhibit G.


 


“Contractual
Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.


 


“Credit
Extension” means each of the following: (a) a Committed Borrowing, (b) a
borrowing of a Swing Line Loan, and (c) an L/C Credit Extension.


 


“Debt
Amortization” means, for any period, for the Borrower, an amount equal to
the sum, without duplication, of all scheduled amortization with respect to
(including any payment or prepayment of principal of, premium, if any, or
redemption, purchase, retirement, sinking fund or similar payment) any
Indebtedness; in each case payable by the Borrower and its Subsidiaries on a
consolidated basis during such period.


 


“Debtor
Relief Laws” means the Bankruptcy Code of the United States of America, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America
or other applicable state or foreign jurisdictions from time to time in effect
and affecting the rights of creditors generally.


 


“Default”
means any event that, with the giving of any notice, the passage of time, or
both, would be an Event of Default.


 


“Default
Rate” means an interest rate equal to (a) the Base Rate (including any
Applicable Margin), plus (b) two percent (2%) per annum, provided,
however, that with respect to a LIBOR Rate Loan, the Default Rate shall
be an interest rate equal to the interest rate (including any Applicable
Margin) otherwise applicable to such Loan plus two percent (2%) per
annum, in each case to the fullest extent permitted by applicable Laws.


 


“Deposit
Account” means a demand, time, savings, passbook or like account with a
bank, savings and loan association, credit union or like organization, other
than an account evidenced by a negotiable certificate of deposit.


 


“Disposition”
or “Dispose” means the sale, transfer, license or other disposition (including
any sale and leaseback transaction) of any property by any Person, including
any sale,


 


9

















 


assignment,
transfer or other disposal, with or without recourse, of any notes or accounts receivable
or any rights and claims associated therewith.


 


“Disregarded
Foreign Subsidiary” shall mean any Foreign Subsidiary the separate
existence of which is disregarded for United States Federal tax purposes under
Treas. Reg. Section 301.7701-3.


 


“Dollar”
and “$” means lawful money of the United States of America.


 


“Dollar
Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative Currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent at such time on the basis of
the Spot Rate (determined in respect of the most recent Revaluation Date) for
the purchase of Dollars with such Alternative Currency.


 


“Domestic
Subsidiary” means any Subsidiary that is organized and existing under the
laws of the United States or any state or commonwealth thereof or under the
laws of the District of Columbia.


 


“EAC
Shareholders” means, individually and collectively, ZM EAC LLC, a Delaware
limited liability company, Stonehouse Erickson Management Co. LLC, a Delaware
limited liability company, and Stonehouse Erickson Investment Co. LLC, a
Delaware limited liability company.


 


“Eligible
Aircrane” means each of Aircranes by Registration numbers listed on
Schedule 1.01 as Eligible Aircrane.


 


“Eligible
Assignee” has the meaning specified in Section 10.07(h).


 


“EMU”
means the economic and monetary union in accordance with the Treaty of Rome
1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992
and the Amsterdam Treaty of 1998, as amended from time to time.


 


“EMU
Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency (whether known as the “Euro” or otherwise).


 


“Environmental
Laws” means all Laws relating to environmental, health, safety and land use
matters applicable to any property.


 


“Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of the Borrower or any other Loan Party directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment
or (e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the foregoing.


 


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“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


“ERISA
Affiliate” means any corporation which is part of a controlled group that
includes the Borrower or trade or business (whether or not incorporated) under
common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and solely for purposes of provisions relating to Section 412
of the Code to the extent required by such section, Sections 414(m) and (o) of
the Code).


 


“ERISA
Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Borrower or any ERISA Affiliate.


 


“Event
of Default” has the meaning specified in Section 8.01.


 


“Event
of Loss” means, with respect to any property, any of the following: (a) any
loss, destruction or damage of such property; (b) any pending or
threatened institution of any proceedings for the condemnation or seizure of
such property or for the exercise of any right of eminent domain; or (c) any
actual condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such property, or confiscation of such property or the
requisition of the use of such property.


 


“Existing
Credit Agreement” means that certain Credit Agreement dated as of October 4,
2002, among Erickson Air-Crane Incorporated, and KeyBank National Association,
as Administrative Agent, and the lending institutions listed therein.


 


“Existing
Letters of Credit” means all Letters of Credit issued pursuant to the
Existing Credit Agreement and outstanding as of the Closing Date, as described
on Schedule 7.03(B) hereto.


 


“FAA”
means the Federal Aviation Administration of the U.S. Department of
Transportation or any successor agency thereto.


 


“Federal
Funds Rate” means, for any day, the rate per annum (rounded upwards to the
next 1/100th of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the


 


11






 










 


next
succeeding Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to KeyBank National Association on such day on such
transactions as determined by the Administrative Agent.


 


“Financed
Aircranes” means the Aircranes pledged as collateral for the Permitted
Equipment Financing as described on Schedule 1.01 hereto.


 


“Financed
Aircraft Loan Documents” means the Master Aircraft Loan and Security Agreement,
promissory notes, and other financing agreements between Borrower and Term
Lender and/or its assigns covering the Financed Aircranes that are specifically
designated as “Loan Documents” as such term is defined in the Master Aircraft
Loan and Security Agreement.


 


“First
Lien/Second Lien Intercreditor Agreement” means an intercreditor agreement
between Administrative Agent and Second Lien Administrative Agent and
acknowledged by Borrower, substantially in the form of Exhibit J-1
hereto.


 


“Fixed
Charges” means, for any period, for the Borrower and its Subsidiaries on a
consolidated basis, the sum of Cash Interest Charges for such period, scheduled
Debt Amortization for such period, cash taxes applicable to the subject period,
Restricted Payments (other than Restricted Payments permitted under Section 7.07(a)),
and Unfunded Capital Expenditures.


 


“Fixed
Charge Coverage Ratio” means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, the ratio of (a) the
sum of (i) Adjusted EBITDA for the period of the four prior fiscal
quarters ending on such date to (b) Fixed Charges for such period.


 


“Foreign
Lender” has the meaning specified in Section 3.01(e).


 


“Foreign
Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.


 


“FRB”
means the Board of Governors of the Federal Reserve System of the United States
of America.


 


“Funded
Debt” means, as of any date of determination, without duplication, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the
outstanding principal amount of all obligations, whether current or long-term,
for borrowed money and letters of credit (including, with respect to the
Borrower or any Guarantor, Obligations hereunder) and all obligations evidenced
by bonds, debentures, notes, loan agreements or other similar instruments, (b) all
purchase money Indebtedness, and (c) Attributable Indebtedness in respect
of capital leases and Synthetic Lease Obligations.


 


“GAAP”
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other principles
as may be approved by a significant segment of the


 


12

















 


accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination and applicable to privately held companies.


 


“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, administrative tribunal, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers
or functions of or pertaining to government.


 


“Guarantor”
means, individually, and “Guarantors” means collectively, each future
Domestic Subsidiary owned by the Borrower, and each currently inactive Domestic
Subsidiary of Borrower that becomes active during the term of this Agreement.


 


“Guaranty
Agreement” means each of the Guaranty Agreements made by the Guarantors
from time to time a party thereto in favor of the Administrative Agent on
behalf of the Lenders, substantially in the form of Exhibit C and “Guaranty
Agreements” means all of them.


 


“Guaranty
Obligation” means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guarantying or having the economic
effect of guarantying any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay for (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation, (ii) to
purchase or lease property, securities or services for the purpose of assuring
the obligee in respect of such Indebtedness or other obligation of the payment
or performance of such Indebtedness or other obligation, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of
assuring in any other manner the obligees in respect of such Indebtedness or
other obligation of the payment or performance thereof or to protect such
obligees against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is
assumed by such Person. The amount of any Guaranty Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guaranty
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guarantying
Person in good faith.


 


“Hazardous
Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all
other substances or wastes of any nature regulated pursuant to any
Environmental Law.


 


“Honor
date” has the meaning given in Section 2.04(b)(i).


 


“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP, to the extent recourse may be had to the assets or properties of
such Person in respect thereof:


 


13

















 


(a)              all
obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar
instruments;


 


(b)              all
direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments;


 


(c)               net
obligations under any Swap Contract in an amount equal to (i) if each Swap
Contract has been closed out, the Swap Termination Value thereof, or (ii) if
such Swap Contract has not been closed out, the mark-to-market value thereof
determined on the basis of readily available quotations provided by any
recognized dealer in such Swap Contract;


 


(d)              all
obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of
business);


 


(e)               indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;


 


(f)               all
obligations in respect of capital leases and Synthetic Lease Obligations; and


 


(g)               all
Guaranty Obligations of such Person in respect of any of the foregoing.


 


For
all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person (subject only to customary exceptions
acceptable to the Required Lenders). The amount of any capital lease or
Synthetic Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date. Notwithstanding
the foregoing, any obligation of such Person or any of its Subsidiaries in
respect of operating leases shall be deemed not to constitute Indebtedness.


 


“Indemnified
Liabilities” has the meaning set forth in Section 10.05. 


 


“Indemnitees”
has the meaning set forth in Section 10.05. 


 


“Information”
has the meaning given in Section 10.08.


 


“Intangible
Assets” means assets that are considered to be intangible assets under
GAAP, including customer lists, goodwill, computer software, copyrights, trade
names, trade marks, patents, unamortized deferred charges, unamortized debt
discount and capitalized research and development costs.


 


14

















 


“Intellectual
Property” means, as to any Person, all of the following:


 


(a)             all trademarks, service marks, designs, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, trade dress, logos, other source or business identifiers owned or
used by such Person in its business or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and pending
applications in the United States Patent and Trademark Office, any State of the
United States or any similar offices in any other country or any political
subdivision thereof, and all extensions or renewals thereof;


 


(b)             all letters patent of the United States or any other
country or any political subdivision thereof, all registrations and recordings
thereof, and all applications for letters patent of the United States or the
equivalent thereof in any other country owned by such Person, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or the equivalent thereof in any similar offices in any
other country, and all reissues, continuations, divisions, continuations-in
part, renewals or extensions thereof, and the inventions disclosed or claimed
therein, including the right to make, use and/or sell the inventions disclosed
or claimed therein;


 


(c)              all computer programs, computer data bases, other
computer software, trade secrets, trade secret rights, ideas, drawings,
designs, schematics, algorithms, shop manuals, process and procedures manuals,
notes, and other writings, techniques, processes and formulas owned or used by
such Person in its business; and


 


(d)             all copyright rights of such Person in any work subject
to the copyright laws of the United States, any state thereof or any other
country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished, whether as author, assignee,
transferee or otherwise, and all registrations and applications for
registration of any such copyright in the United States, any state thereof or
any other country or any political subdivision thereof, including
registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office or in any similar
offices in any other country.


 


“Intercreditor
Agreement” means, individually and colletively, the First
Lien/Second Lien Intercreditor Agreement, the Aircraft Intercreditor Agreement
and the Revolving Lender/Term Lender Intercreditor Agreement, in each case as
amended, modified and restated from time to time.


 


“Interest
Payment Date” means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any
Interest Period for a LIBOR Rate Loan exceeds three months, the respective
dates that fall every three months after the beginning of such Interest Period
shall also be Interest Payment Dates; and (b) as to any Base Rate Loan
(including a Swing Line Loan), the last Business Day of each March, June, September and
December and the Maturity Date.


 


15

















 


“Interest
Period” means the period commencing on the date such LIBOR Rate Loan is
disbursed or (in the case of any Base Rate Loan) converted to or continued as a
LIBOR Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrower in its Committed Loan Notice; provided
that:


 


(i)                any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business
Day unless, in the case of a LIBOR Rate Loan, such Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Business Day;


 


(ii)               any Interest Period pertaining to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the calendar month
at the end of such Interest Period; and


 


(iii)              no Interest Period shall extend beyond the scheduled
Maturity Date.


 


“Inventory”
means (i) all inventory, as such term is defined in the Uniform Commercial
Code of New York, (ii) all “Aircranes in Storage” identified on Schedule
1.01(A) hereto, (iii) all “Engines for S-64E Fleet Assets”
identified on Schedule 1.01(B) hereto except Engines
constituting Eligible Aircranes and Term Financed Aircranes, (iv) all “Engines
for S-64F Fleet Assets” identified on Schedule 1.01(B) hereto except
Engines constituting Eligible Aircranes and Term Financed Aircranes, (v) all
of Borrower’s now owned and hereafter acquired aircraft parts, avionics, and
replacement parts equipment except as the same are installed on an Eligible
Aircrane or Term Financed Aircrane.


 


“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance
or capital contribution to, guaranty or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person, or (c) the purchase or other acquisition (in one transaction
or a series of transactions) of assets of another Person that constitute a
business unit. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, less Returned Investments,
without adjustment for subsequent increases or decreases in the value of such
Investment.


 


“IRS”
means the United States Internal Revenue Service or any successor agency
thereto. 


 


“Judgment
Currency” has the meaning given in Section 10.21.


 


“KeyBank”
means KeyBank National Association.


 


“Laws”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any


 


16

















 


Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority, in each case whether or not having the force of law.


 


“L/C
Advance” means, with respect to each Lender, such Lender’s
funding of its participation in any L/C Borrowing in accordance with its Pro
Rata Share.


 


“L/C
Borrowing” means an extension of credit resulting from a
drawing under any Letter of Credit which has not been reimbursed on the date
when made or refinanced as a Committed Borrowing.


 


“L/C
Credit Extension” means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.


 


“L/C
Issuer” means KeyBank National Association in its capacity as issuer of
Letters of Credit hereunder, or other Lender issuing a Letter of Credit
denominated in an Alternative Currency, or any successor issuer of Letters of
Credit hereunder.


 


“L/C
Obligations” means, as at any date of determination, the
aggregate undrawn Dollar Equivalent amount of all outstanding Letters of Credit
plus the aggregate of all Unreimbursed Amounts,
including all outstanding L/C Borrowings.


 


“Lender” has the
meaning specified in the introductory paragraph hereto and, as the context
requires, includes the L/C Issuer and the Swing Line Lender, and any Person
that becomes a Lender pursuant to Section 10.07(b).


 


“Lending
Office” means, as to any Lender, the office or offices of such Lender
described as such on Schedule 10.02, or such other office or
offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.


 


“Letter
of Credit” or “L/C” means any letter of credit issued
hereunder and shall include the Existing Letter(s) of Credit. A Letter of
Credit may be a commercial letter of credit or a standby letter of credit.


 


“Letter
of Credit Application” means an application and agreement for the
issuance or amendment of a letter of credit in the form from time to time in
use by the L/C Issuer.


 


“Letter
of Credit Expiration Date” means, with respect to (i) the
Letter of Credit Facility, the earlier of May 15, 2008 and the
cancellation of all Letters of Credit issued under the Letter of Credit
Facility, and (ii) the Letter of Credit Subfacility, the day that is
fifteen (15) days prior to the Commitment Termination Date, (or, if such day is
not a Business Day, the next preceding Business Day).


 


“Letter
of Credit Facility” means the letter of credit facility for Letters of
Credit described in Schedule 7.03(B)  hereto and identified as
Korea II Warranty Bond, Korea III Advance Payment Bond, Korea IV Advance
Payment Bond, Korea III Performance Bond (A)


 


17

















 


and
Korea IV Performance Bond (B), not to exceed the Letter of Credit Facility
Commitment. The Letter of Credit Facility is separate and apart from the Letter
of Credit Subfacility.


 


“Letter
of Credit Facility Commitment” means a non-revolving reducing amount equal
to the lesser of (i) the Outstanding Facility Letters of Credit, and (ii) $25,000,000.
..


 


“Letter
of Credit Subfacility” means Letters of Credit not to exceed the Letter of
Credit Sublimit issued under the Revolving Credit Facility.


 


“Letter
of Credit Sublimit” or “L/C Sublimit” means an amount available
under the Revolving Credit Facility for Letters of Credit equal to the lesser
of the Aggregate Commitments and $10,000,000. The Letter of Credit Sublimit is
part of, and not in addition to, the Aggregate Commitments and is separate and
apart from the Letter of Credit Facility.


 


“LIBOR
Rate” shall mean, with respect to any LIBOR Rate for any applicable
Interest Period, an interest rate per annum equal to the sum of: (a) the Applicable
Margin and (b) the product of (i) the Euro-dollar Rate in effect for
such applicable Interest Period and (ii) in accordance with Section 3.04(c),
the Euro-dollar Reserves in effect on the first day of such applicable Interest
Period.


 


As
used herein the “Euro-dollar Rate” will be determined by reference to that rate
(rounded upward to the next 1/16th of one percent) appearing on the display
designated as “Reuters Screen LIBOR01 Page “(or on such other page on
that service or such other service designated by the British Banker’s
Association for the display of that Association’s Interest Settlement Rates for
U.S. Dollar deposits) as of 11:00 a.m. (London time) on the day which is
two (2) London Banking Days prior to the first date of the proposed applicable
Interest Period. If there are no applicable quotes available through Telerate
Service, then the LIBOR Rate shall be deemed unavailable as provided in Section 3.03
hereof.


 


As
used herein, the term “Euro-dollar Reserves” means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including, without limitation, any special, supplemental, marginal or
emergency reserves) expressed as a decimal established by the Board of
Governors of the Federal Reserve System or any other banking authority to which
Agent is subject for Eurocurrency Liability (as defined in Regulation D
of such Board of Governors). It is agreed that for purposes hereof, each LIBOR
Rate Loan shall be deemed to constitute a Eurocurrency Liability and to be
subject to the reserve requirements of Regulation D, without benefit of
credit or proration, exemptions or offsets which might otherwise be available
to any Lender from time to time under such Regulation D. Euro-dollar
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage and shall apply to applicable Interest Periods
commencing after the effective date of such change.


 


“LIBOR
Rate Committed Loan” means a Committed Loan that bears interest at the
LIBOR Rate.


 


“LIBOR
Rate Loan” means a Loan that bears interest at the LIBOR Rate. All LIBOR
Rate Loans shall be denominated in Dollars.


 


18

















 


“LIBOR
Request” shall mean a Notice of Borrowing requesting a LIBOR
Rate Loan and setting forth the Interest Period.


 


“Lien” means any
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), charge, or preference, priority or other security
interest or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, and any
financing lease having substantially the same economic effect as any of the
foregoing and, for the avoidance of doubt, not including any operating leases),
including the interest of a purchaser of accounts receivable.


 


“Loan” means an
extension of credit by a Lender to the Borrower under Article II in the form of
a Committed Loan or a Swing Line Loan.


 


“Loan
Documents” means this Agreement, each Note, each Request for
Credit Extension, each Compliance Certificate, each Collateral Document, each
Guaranty Agreement, each Intercreditor Agreement and each other document,
instrument or agreement executed from time to time by the Borrower or any Loan
Party that is specifically designated by its terms as a “Loan Document” for
purposes of this Agreement.


 


“Loan
Party” means Borrower or any Guarantor and “Loan Parties” means,
collectively, the Borrower and each Guarantor.


 


“Management
Agreement” means that certain Management Services Agreement
dated September 27, 2007 between EAC Acquisition Corp. and Manager.


 


“Management
Fee” means fees for services by the Manager pursuant to the Management
Agreement.


 


“Manager” means
Stonehouse Capital Partners.


 


“Material
Adverse Effect” means (a) a material adverse change in, or a
material adverse effect upon, the business, prospects, operations, properties,
liabilities (actual or contingent), financial and other condition and
creditworthiness of the Borrower or the Borrower and its Subsidiaries taken as
a whole, (b) a material impairment of the ability of any Loan Party to
perform its obligations under any Loan Document to which it is a party, taken
as a whole; or (c) a material adverse effect upon (i) the
enforceability against any Loan Party of any Loan Documents to which it is a
party, or (ii) the perfection or priority of any Lien granted under any of
the Collateral Documents; provided that the Collateral subject
to such Lien has a fair market value, individually or in the aggregate, in
excess of $2,000,000.


 


“Maturity
Date” means (a) the Commitment Termination Date or (b) such
earlier date upon which the Aggregate Commitments may be terminated in
accordance with the terms hereof.


 


“Maximum
Rate” has the meaning given in Section 10.10.


 


“Moody’s” means Moody’s
Investors Service, Inc. or any successor thereto.


 


19

















 


“Multiemployer
Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of
ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.


 


“Net
Proceeds” means, as to any Disposition by a Person, proceeds in Cash, as
and when received by such Person, net of: (a) the direct costs relating to
such Disposition excluding amounts payable to such Person or any Affiliate of
such Person, (b) sale, use or other transaction taxes paid or payable by
such Person as a result thereof, (c) income taxes paid or payable by such
Person as a result of gains recognized on such Disposition, and (d) amounts
required to be applied to repay principal, interest and prepayment premiums and
penalties on Indebtedness secured by a Lien on the asset which is the subject
of such Disposition. “Net Proceeds” shall also include proceeds paid on
account of any Event of Loss, net of (i) all money actually applied to
repair or reconstruct the damaged property or property affected by the
condemnation or taking, (ii) all of the costs and expenses reasonably
incurred in connection with the collection of such proceeds, award or other
payments, and (iii) any amounts retained by or paid to parties having
superior rights to such proceeds, awards or other payments.


 


“Net
Worth” means, as of the date of determination, all assets appearing on the
balance sheet of Borrower and Subsidiaries on a consolidated basis, on a GAAP basis,
less, without duplication of deductions, the sum of all liabilities, all
reserves established by Borrower for anticipated losses or expenses, (excluding
the effect of currency translation adjustments recorded in the shareholder’s
equity section of Borrower’s balance sheet and net of the after-tax value of
the mark-to-market balances recorded in the asset and liability sections of the
Borrower’s balance sheet that reflect non-speculative, unbalanced currency
hedging positions, all in accordance with GAAP).


 


“New
Subsidiary” has the meaning set forth in Section 6.12(a).


 


“Non-Consenting
Lender” shall have the meaning assigned to such term in Section 3.07.



 


“Non-Guarantor
Subsidiary” means any Subsidiary that is not a Guarantor.


 


“Note”
means individually a Committed Loan Note and the Swing Line Note and “Notes”
means, collectively, the Committed Loan Notes.


 


“Obligations”
means, without duplication, (a) all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter
arising, and (b) all liabilities and obligations of the Borrower or any
Subsidiary owing to any Lender or any Affiliate of any Lender that was a Lender
at the time it entered into a Swap Agreement arising under any Swap Contract
permitted by Section 7.03(d), whether absolute or contingent, due
or to become due, now existing or hereafter arising.


 


“Orderly
Liquidation Value” has the meaning given in the Aircraft Appraisal Report.


 


20

















 


“Organization
Documents” means, (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable
constitutional documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the articles of formation and
operating agreement; and (c) with respect to any partnership, joint venture,
trust or other form of business entity, the partnership, joint venture or other
applicable agreement of formation and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation with the
applicable Governmental Authority in the jurisdiction of its formation, in each
case as amended from time to time.


 


“Other
Aircraft” means all the “Support Helicopters” and “Corporate Airplane”
identifed on Schedule 1.01(A) and aircraft engines installed
thereon on the Closing Date, and all completed model S-64E Aircranes and model
S-64F Aircranes whether now owned, hereafter acquired or manufactured by
Borrower hereto; provided, however, Other Aircraft shall not
include all aircraft, airframes and aircraft engines constituting Eligible
Aircranes, or Financed Aircranes, but only so long as such Financed Aircranes
are subject to the Financed Aircraft Loan Documents.


 


“Outstanding
Amount” means (i) with respect to Committed Loans and Swing Line Loans
on any date, the aggregate outstanding principal Dollar Equivalent amount
thereof after giving effect to any borrowings and prepayments or repayments of
Committed Loans and Swing Line Loans, as the case may be, occurring on such
date; and (ii) with respect to any L/C Obligations on any date, the Dollar
Equivalent amount of such L/C Obligations on such date after giving effect to
any L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements of outstanding unpaid drawings under any Letters of
Credit or any reductions in the maximum amount available for drawing under
Letters of Credit taking effect on such date.


 


“Overnight
Rate” means, for any day, (a) with respect to any amount denominated
in Dollars, the Federal Funds Rate and (b) with respect to any amount
denominated in an Alternative Currency, the rate of interest per annum at which
overnight deposits in the applicable Alternative Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by a branch or Affiliate of KeyBank
National Association located in the applicable interbank market for such
currency to major banks in such interbank market.


 


“Participant”
has the meaning specified in Section 10.07(d).


 


“PBGC”
means the Pension Benefit Guaranty Corporation.


 


“Pension
Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five plan years.


 


21














 


“Permitted
Acquisition” means any acquisition, whether by purchase, merger or
otherwise, of all or substantially all of the assets of, or more than fifty
percent (50%) of the voting Capital Stock of, or a business line or a division
of, any Person; provided that:


 


(i)                all Persons, assets, business lines or divisions
acquired shall be in the type of business permitted to be engaged in by the
Borrower and its Subsidiaries pursuant to Section 7.09 or such
other lines of business as may be consented to by Required Lenders;


 


(ii)               no Default or Event of Default shall then exist or
would exist after giving effect to such acquisition;


 


(iii)              as of the closing of any acquisition, such acquisition
shall have been approved by the board of directors or equivalent governing body
of the Person to be acquired or from which such assets, business line or
division is to be acquired;


 


(iv)             not less than fifteen (15) Business Days prior to the
consummation of any acquisition for cash consideration (including assumed
liabilities, earnout payments and any other deferred payment) in excess of
$2,500,000, the Borrower shall have delivered to the Administrative Agent a
written description of the Person, assets, business line or division to be
acquired and its operations together with a copy of the related purchase
agreement, which related purchase agreement shall be in execution form if
available and in the most recent draft form if an execution form has not been
finalized; provided, however the Borrower shall deliver to the Administrative
Agent an execution form of related purchase agreement as soon as such agreement
has been finalized for execution by the parties thereto;


 


(v)              the Borrower shall demonstrate to the reasonable
satisfaction of the Administrative Agent that, after giving effect to such
acquisition, the Borrower will be in pro forma compliance with all of the terms
and provisions of the financial covenants set forth in Section 7.13;


 


(vi)             if such acquisition is structured as a merger, the
Borrower (or if such merger is with any Subsidiary, then such Subsidiary) shall
be the surviving Person after giving effect to such merger;


 


(vii)            if the total cash consideration (including assumed
liabilities, earnout payments and any other deferred payment) paid for all of
the Persons, assets, business lines or divisions acquired exceeds $5,000,000 in
the aggregate from the Closing Date, the Required Lenders shall have approved
such acquisition; and


 


(viii)           such acquisition is approved by a
majority of such Person’s board of directors or similar governing body.


 


22

















 


“Permitted
Equipment Financing” means the approximately $65,000,000 in term loan
facilities provided by Term Lender and assigns, pursuant to the Financed
Aircraft Loan Documents.


 


“Permitted
Liens” has the meaning given in Section 7.01.


 


“Permitted
Second Lien Financing” means the not to exceed $23,000,000 in term loan
facilities provided by Second Lien Lender pursuant to the Second Lien Financing
Documents secured by the Second Lien Collateral and subject to the First
Lien/Second Lien Intercreditor Agreements.


 


“Person”
means any individual, trustee, corporation, general partnership, limited
partnership, limited liability company, joint stock company, trust,
unincorporated organization, bank, business association, firm, joint venture,
Governmental Authority or other legal entity.


 


“Plan”
means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is
subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.


 


“Pro
Rata Share” means, with respect to each Lender, the percentage (carried out
to the ninth decimal place) of the Aggregate Commitments set forth opposite the
name of such Lender on Schedule 2.01, as such share may be adjusted as
contemplated herein.


 


“Real
Property” means Borrower’s real property located in Jackson County, Oregon,
all as more particularly described in Schedule 1.01 hereto.


 


“Register”
has the meaning set forth in Section 10.07(c).


 


“Reportable
Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.


 


“Request
for Credit Extension” means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, and (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.


 


“Required
Lenders” means, as of any date of determination, Lenders whose Voting
Percentages aggregate more than 66-2/3% in the case of three (3) or more
Lenders, or, in the case of two (2) or fewer Lenders, 100%.


 


“Responsible
Officer” means the chief executive officer, chief legal officer, chief
financial officer, treasurer or assistant treasurer of a Loan Party or any
other officer designated by the applicable Loan Party to Agent in writing. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.


 


23

















 


“Restricted
Payment” means (a) any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
equity interest of the Borrower or any Subsidiary (other than dividends or
other distributions by a Subsidiary of Borrower to Borrower), or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other
equity interest or of any option, warrant or other right to acquire any such
capital stock or other equity interest; (b) any principal payment made in
respect of any Subordinated Debt; and (c) Management Fees; provided,
that no dividend or other payment or distribution by any Subsidiary to the
Borrower (directly or indirectly) for the purpose of satisfying any obligation
for the payment of taxes shall constituted a Restricted Payment for purposes of
this Agreement.


 


“Retained
Aircraft” means Other Aircraft and all Aircranes of Borrower except
Financed Aircranes.


 


“Returned
Investments” means, with respect to any Investment, the aggregate amount of
all payments made in respect of such Investment that have been paid or
returned, without restriction, in cash or otherwise to the Person making such
Investment.


 


“Revaluation
Date” means each of the following: (a) each date of a Borrowing of a
LIBOR Rate Loan denominated in an Alternate Currency; (b) each date of a
continuation of a LIBOR Rate Loan denominated in an Alternate Currency; (c) each
date of issuance of a Letter of Credit denominated in an Alternative Currency, (d) each
date of an amendment of any such Letter of Credit having the effect of increasing
the amount thereof, and (e) such additional dates as the Administrative
Agent or the Required Lenders shall specify in their reasonable discretion.


 


“Revolving
Credit Facility” means the not to exceed $40,000,000 credit facility for
revolving loans including the Letter of Credit Subfacility.


 


“Revolving
Lender/Term Lender Intercreditor Agreement” means a collateral sharing and
intercreditor agreement among Administrative Agent for itself and on behalf of
Lenders, and Term Lender and assigns, and Collateral Agent, and acknowledged by
Borrower, with respect to the Borrower Pledge Agreement and the Stock Pledge
Agreement and Guaranties, substantially in the form of Exhibit J-3 hereto.


 


“S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor thereto.


 


“Same
Day Funds” means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to
disbursements and payments in an Alternative Currency, same day or other funds
as may be determined by the Administrative Agent to be customary in the place
of disbursement or payment for the settlement of international banking
transactions in the relevant Alternative Currency.


 


“SEC”
means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.


 


24

















 


“Second
Lien Collateral” means all of the Borrower’s (i) Eligible Aircranes
and the Engines installed thereon on the Closing Date, and including without
limitation tail rotor systems, main rotor systems, rotor blades, transmissions
and rotable parts, (ii) Other Aircraft, and (iii) Real Property.


 


“Second
Lien Administrative Agent” means D.B. Zwirn Special Opportunities Fund,
L.P. in its capacity as administrative agent for Second Lien Lender.


 


“Second
Lien Financing Documents” means Second Lien Credit Agreement, Second
Lien Aircraft and Flight Equipment Security Agreement, Second Lien Deed of
Trust, Second Lien Unsecured Environmental Compliance and Indemnification
Agreement, in each case dated the date hereof and between Borrower and Second
Lien Collateral Agent for the benefit of Second Lien Lenders.


 


“Second
Lien Lender” means D.B. Zwirn Special Opportunities Fund, L.P. and its
Affiliates and designees.


 


“Senior
Funded Debt” means the sum of the outstanding Total Funded Debt less
outstanding Subordinated Debt.


 


“Shareholders’
Equity” means, as of any date of determination for the Borrower and its
Subsidiaries on a consolidated basis, shareholders’ equity as of that date
determined in accordance with GAAP.


 


“Solvent”
means, as to any Person at a particular time, if, at such time both (a) (i) the
then fair saleable value of the property of such Person on a going concern
basis is (A) greater than the total amount of liabilities (including
contingent liabilities) of such Person as they mature in the ordinary course
and (B) not less than the amount that will be required to pay the probable
liabilities on such Person’s then existing debts as they become absolute and
matured considering all financing alternatives and potential asset sales
reasonably available to such Person; (ii) such Person’s capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person does not intend to incur, or believe
(nor should it reasonably believe) that it will incur, debts beyond its ability
to pay such debts as they become due; and (b) such Person is “solvent”
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability in the ordinary course.


 


“Sponsors”
means ZM Equity Partners, L.P., a Delaware limited partnership, D.B. Zwirn &
Co., L.P., a Delaware limited partnership, Stonehouse Management Company, LLC,
a Delaware limited liability company and each of their respective Affiliates.


 


“Spot
Rate” means for a currency, the rate quoted by KeyBank as the spot rate for
the purchase by KeyBank of such currency with another currency through its
principal foreign exchange trading office at approximately 2:00 p.m.,
Cleveland time, on the date two Business Days prior to the date as of which the
foreign exchange computation is made.


 


25

















 


“Stock
Pledge Agreement” means individually and collectively, the Stock Pledge
Agreement by EAC Shareholders in favor of Collaterall Agent for the benefit of
Administrative Agent on behalf of Lenders, and Term Lender, substantially in
the form of Exhibit E covering the capital stock of Borrower.


 


“Stock
Purchase Agreement” means that certain Stock Purchase Agreement dated July 5,
2007, as amended, between EAC Acquisition Corp. as buyer and EAC Holdings,
L.L.C., as seller.


 


“Subordinated
Debt” means the Permitted Second Lien Financing and other Indebtedness of
the Borrower which has been subordinated by written agreement to Indebtedness
of Borrower owed to Lenders, in form and substance reasonably satisfactory to
Administrative Agent.


 


“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise specified, all references herein to a “Subsidiary”
or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the
Borrower.


 


“Swap
Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.


 


“Swap
Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s) determined
in accordance therewith, such termination value(s), and (b) for any date
prior to the date referenced in clause (a) the amount(s) determined
as the mark-to-market value(s) for such Swap Contracts, as determined
based upon one or more mid-market or other readily available quotations
provided by any recognized dealer in such Swap Contracts (which may include any
Lender).


 


26

















 


“Swing
Line” means the revolving credit facility made available by the Swing Line
Lender pursuant to Section 2.05.


 


“Swing
Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.05.


 


“Swing
Line Lender” means KeyBank in its capacity as provider of Swing Line Loans,
or any successor swing line lender hereunder.


 


“Swing
Line Loan” has the meaning specified in Section 2.05(a).


 


“Swing
Line Note” means a promissory note made by the Borrower in favor of the
Swing Line Lender evidencing Swing Line Loans made by such Lender,
substantially in the form of Exhibit B-2.


 


“Swing
Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.05(b),
which, if in writing, shall be substantially in the form of Exhibit A-2.


 


“Swing
Line Sublimit” means an amount equal to the lesser of (a) $5,000,000.00
and (b) the Aggregate Commitments. The Swing Line Sublimit is part of, and
not in addition to, the Aggregate Commitments.


 


“Synthetic
Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).


 


“TARGET
Day” means any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) System (or, if such clearing system ceases
to be operative, such other clearing system (if any) determined by the
Administrative Agent to be a suitable replacement) is operating.


 


“Term
Lender” means The Prudential Insurance Company of America, its successors
and assigns providing term loans for the Financed Aircranes.


 


“Threshold
Amount” means $500,000.00.


 


“Total
Funded Debt” means, without duplication, the sum of all outstanding
liabilities for borrowed money and other interest earning liabilities including
current and long term liabilities, guaranties of Indebtedness, and letter of
credit obligations, including without limitation the Revolving Credit Facility,
Financed Aircraft Term Loans, the Letter of Credit Facility and the Permitted
Second Lien Financing.


 


“Transitional
Subsidiary” means any Subsidiary formed after the Closing Date solely for
the purpose of implementing an asset disposition or a structural transaction
(including an acquisition) permitted by this Agreement and which will cease to
be a Subsidiary after the


 


27

















 


consummation
of such asset disposition or transaction (which will, in no event, be more than
90 days after the date of the formation of such Subsidiary).


 


“Type” means with
respect to a Committed Loan, its character as a Base Rate Loan or a LIBOR Rate
Loan.


 


“United
States” and “U.S.” each means the United States of America.


 


“Unfunded
Capital Expenditures” means Capital Expenditures which are not
financed by a specific long term loan or Capital Lease.


 


“Unfunded
Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, determined in accordance
with the assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year, over the current value of that
Pension Plan’s assets.


 


“Unreimbursed
Amount” has the meaning set forth in Section 2.04(b)(i).


 


“Voting
Percentage” means, as to any Lender, (a) at any time when
the Aggregate Commitments are in effect, such Lender’s Pro Rata Share and (b) at
any time after the termination of the Aggregate Commitments, the percentage
(carried out to the ninth decimal place) which (i) the sum of (A) the
Outstanding Amount of such Lender’s Committed Loans, plus (B) such
Lender’s Pro Rata Share of the Outstanding Amount of L/C Obligations, plus  (C) such Lender’s
Pro Rata Share of the Outstanding Amount of Swing Line Loans, then comprises of
(ii) the Outstanding Amount of all Loans and L/C Obligations; provided, however,
that if any Lender has failed to fund any portion of the Committed
Loans or participations in L/C Obligations or participations in Swing Line
Loans required to be funded by it hereunder, such Lender’s Voting Percentage
shall be deemed to be zero, and the respective Pro Rata Shares and Voting
Percentages of the other Lenders shall be recomputed for purposes of this
definition and the definition of “Required Lenders” without regard
to such Lender’s Commitment or the outstanding amount of its Committed Loans,
L/C Advances and funded participations in Swing Line Loans, as the case may be.


 


1.02        Other
Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:


 


(a)           The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.


 


(b)           (i)           The
words “herein,”  “hereto,”  “hereof,” and “hereunder” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.


 


(ii)          Article, Section, Exhibit and
Schedule references are to the Loan Document in which such references appear.


 


(iii)         The term “including” is by way of
example and not limitation.


 


28

















 


(iv)         The term “documents” includes any
and all instruments, documents, agreements, certificates, notices, reports,
financial statements and other writings, however evidenced, whether in physical
or electronic form.


 


(c)               In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”; the words “to”
and “until” each mean “to but excluding”; and the word “through” means “to and
including.”


 


(d)              Section headings
herein and in the other Loan Documents are included for convenience of reference
only and shall not affect the interpretation of this Agreement or any other
Loan Document.


 


1.03        Accounting
Terms.


 


(a)              All accounting
terms not specifically or completely defined herein shall be construed in
conformity with, and all financial data (including financial ratios and other
financial calculations) required to be submitted pursuant to this Agreement
shall be prepared in conformity with GAAP applied on a consistent basis as in
effect from time to time, applied in a manner consistent with that used in
preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.


 


(b)              If at any time
any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the
Required Lenders shall so request, the Administrative Agent, the Lenders and
the Borrower shall negotiate in good faith to amend such ratio or requirement
to preserve the original intent thereof in light of such change in GAAP; provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower
shall provide to the Administrative Agent and the Lenders financial statements
and other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.


 


1.04        UCC Terms. Except as
otherwise provided herein, terms used herein that are defined in the Uniform
Commercial Code have the meanings given to them in the Uniform Commercial Code
as the same may, from time to time, be in effect in the State of New York.


 


1.05        Rounding. Any financial
ratios required to be maintained by the Borrower pursuant to this Agreement
shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).


 


1.06        References
to Agreements and Laws. Unless otherwise expressly provided herein, (a) references
to agreements (including the Loan Documents) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
not expressly prohibited by


 


29

















 


any
Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.


 


1.07        Letter of
Credit Amounts. Unless otherwise specified, all references herein to
the amount of a Letter of Credit at any time shall be deemed to mean the
maximum Dollar Equivalent face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.


 


1.08        Exchange
Rates; Currency Equivalents.


 


(a)              The
Administrative Agent shall determine the Spot Rates as of each Revaluation Date
to be used for calculating Dollar Equivalent amounts of Credit Extensions and
Outstanding Amounts of Letters of Credit denominated in Alternative Currencies.
Such Spot Rates shall become effective as of such Revaluation Date and shall be
the Spot Rates employed in converting any amounts between the applicable
currencies until the next Revaluation Date to occur. Except for purposes of
financial statements delivered by Loan Parties hereunder or calculating
financial covenants hereunder or except as otherwise provided herein, the
applicable amount of any currency for purposes of the Loan Documents shall be
such Dollar Equivalent amount as so determined by the Administrative Agent,
which determination shall be conclusive in the absence of manifest error.


 


(b)              Wherever in this
Agreement in connection with a Borrowing, conversion, continuation or
prepayment of a Loan or the issuance of a Letter of Credit, an amount, such as
a required minimum or multiple amount, is expressed in Dollars, but such
Borrowing, Loan, or Letter of Credit is denominated in an Alternative Currency,
such amount shall be the relevant Alternative Currency Equivalent of such
Dollar amount (rounded to the nearest 1,000 units of such Alternative Currency),
as determined by the Administrative Agent, which determination shall be
conclusive in the absence of manifest error.


 


1.09        Additional
Alternative Currencies. The Borrower may from time to time request
that Committed Loans and L/C Credit Extensions be made in a currency other than
those specifically listed in the definition of “Alternative Currency;”
provided that such requested currency otherwise meets the requirements set
forth in such definition. Any such request shall be made to the Administrative
Agent (which shall promptly notify each Lender thereof) not later than 2:00 p.m.,
Cleveland time, ten (10) Business Days prior to the date of the desired
Credit Extension. Each Lender shall notify the Administrative Agent, not later
than 2:00 p.m., Cleveland time, five (5) Business Days after receipt
of such request whether it consents, in its sole discretion, to making
Committed Loans in such requested currency. Any failure by a Lender to respond
to such request within the time period specified in the preceding sentence shall
be deemed to be a refusal by such Lender to make Committed Loans in such
requested currency. If all the Lenders consent to making Committed Loans in
such requested currency, the Administrative Agent shall so notify the Borrower
and such currency shall thereupon be deemed for all purposes to be an
Alternative Currency hereunder.


 


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1.10        Redenomination
of Certain Alternative Currencies.


 


(a)              Each obligation
of the Borrower to make a payment denominated in the national currency unit of
any member state of the European Union shall be denominated into Euro (in
accordance with the EMU Legislation). If, in relation to the currency of any
such member state, the basis of accrual of interest expressed in this Agreement
in respect of that currency shall be inconsistent with any convention or
practice in the London interbank market for the basis of accrual of interest in
respect of the Euro, such expressed basis shall be replaced by such convention
or practice with effect from the date on which such member state adopts the
Euro as its lawful currency; provided that if any Borrowing in the currency of
such member state is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such Borrowing, at the end of
the then current Interest Period.


 


(b)              Each provision of
this Agreement shall be subject to such reasonable changes of construction as
the Administrative Agent may from time to time specify to be appropriate to
reflect the adoption of the Euro by any member state of the European Union and
any relevant market conventions or practices relating to the Euro.


 


1.11        Conflicts. In the event of
any conflict between this Agreement and any other Loan Document, this Agreement
shall control.


 


II.


THE COMMITMENTS AND CREDIT EXTENSIONS


 


2.01        Committed
Loans.


 


(a)             Revolving Loans.
Subject to the terms and conditions set forth herein, each Lender severally
agrees to make loans (each such loan, a “Committed Loan”) to the Borrower in Dollars
or in one or more Alternative Currencies from time to time on any Business Day
during the period from the Closing Date to the Maturity Date, in an aggregate
amount not to exceed at any time outstanding the amount of such Lender’s
Commitment; provided, however, that after giving effect to
any Committed Borrowing, (i) the Dollar Equivalent of the aggregate
Outstanding Amount of all Loans and the Dollar Equivalent of the Outstanding
Amount of L/C Obligations shall not exceed the Aggregate Commitments, (ii) the
Dollar Equivalent of the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender’s Pro Rata Share of the Dollar Equivalent of the
Outstanding Amount of all L/C Obligations, shall not exceed such Lender’s
Commitment, (iii) the Dollar Equivalent of the aggregate Outstanding
Amount of L/C Obligations shall not exceed the L/C Sublimit, (iv) the
Dollar Equivalent of the aggregate Outstanding Amount of Letter of Credit
Facility Obligations shall not exceed the Letter of Credit Facility Limit and (v) the
Dollar Equivalent of the aggregate Outstanding Amount of all Loans denominated
in Alternative Currencies shall not exceed the Alternative Currencies Sublimit.
Within the limits of each Lender’s Commitment, and subject to the other terms
and conditions hereof, the Borrower may borrow under this Section 2.01,
prepay under Section 2.06, and reborrow under this Section 2.01; provided, however,
that Borrower may not reborrow after the Commitment Termination Date, and
provided further that Borrower may not reborrow under the Letter of Credit
Facility. Committed Loans may be Base Rate Loans or LIBOR Rate Loans, as
further provided herein.


 


(b)             Letter of Credit
Subfacility.


 


31














 


(i)                 Subject to the
terms and conditions set forth herein, (A) the L/C Issuer agrees, in
reliance upon the agreements of the other Lenders set forth in this Section 2.01(b),
(1) from time to time on any Business Day during the period from the
Closing Date until the applicable Letter of Credit Expiration Date, to issue
Letters of Credit denominated in Dollars or in one or more Alternative
Currencies for the account of the Borrower, and to amend or renew Letters of
Credit previously issued by it, in accordance with Section 2.04
below, and (2) to honor drafts under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrower; provided that the L/C Issuer shall not be obligated to
make any L/C Credit Extension with respect to any Letter of Credit, and no
Lender shall be obligated to participate in, any Letter of Credit if as of the
date of such L/C Credit Extension, the Dollar Equivalent of (x) the
Outstanding Amount of all L/C Obligations and all Loans would exceed Aggregate
Commitments, (y) the aggregate Outstanding Amount of the Committed Loans
of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of
all L/C Sublimit Obligations, would exceed such Lender’s Commitment, or (z) the
Outstanding Amount of the L/C Sublimit Obligations would exceed the Letter of
Credit Sublimit. Within the foregoing limits, and subject to the terms and
conditions hereof, the Borrower’s ability to obtain Letters of Credit under the
Letter of Credit Subfacility shall be fully revolving, and accordingly the
Borrower may, during the foregoing period, obtain Letters of Credit under the
Letter of Credit Sublimit to replace Letters of Credit (except Letters of
Credit under the Letter of Credit Facility) that have expired or that have been
drawn upon and reimbursed;


 


(ii)                the L/C Issuer
shall be under no obligation to issue any Letter of Credit if: (A) any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter
of Credit; (B) any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall (1) prohibit, or
request that the L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular, (2) impose upon the L/C
Issuer with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or (3) impose upon the L/C
Issuer any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the L/C Issuer in good faith deems material to it,
unless, in the case of clauses (2) or (3), the Borrower shall agree to
compensate the L/C Issuer for and hold the L/C Issuer harmless from any loss,
cost or expense incurred by it as a result of such Law or request or directive
from such Governmental Authority pursuant to the terms of such documents as
Borrower and Administrative Agent may agree; (C) subject to Section 2.04(b)(iii),
the expiry date of such requested Letter of Credit would occur more than twelve
months after the date of issuance or last renewal, unless the Required Lenders
have approved such expiry date; (D) the expiry date of such requested
Letter of Credit would occur after the Letter of Credit Expiration Date, unless
all the Lenders have approved such expiry date;


 


(iii)               the L/C Issuer
shall be under no obligation to amend any Letter of Credit if (A) the L/C
Issuer would have no obligation at such time to issue such Letter of Credit in
its amended form under the terms hereof, or (B) the beneficiary of such
Letter of Credit does not accept the proposed amendment to such Letter of
Credit; and


 


32

















 


(iv)               the L/C Issuer
shall be under no obligation to issue or amend any Letter of Credit if the L/C
Issuer has received written notice from any Lender, the Administrative Agent or
any Loan Party, on or prior to the Business Day prior to the requested date of
issuance or amendment of such Letter of Credit, that one or more applicable
conditions contained in Article IV shall not then be satisfied.


 


2.02        Borrowings, Conversions and Continuations of Committed Loans.


 


(a)           Each Committed
Borrowing, each conversion of Committed Loans from one Type to the other, and
each continuation of a LIBOR Rate Committed Loan shall be made upon the
Borrower’s irrevocable notice to the Administrative Agent, which may be given
by telephone. Each such notice must be received by the Administrative Agent not
later than 2:00 p.m., Cleveland time, (i) three Business Days prior
to the requested date of any Borrowing of, conversion to or continuation of
LIBOR Rate Committed Loans denominated in Dollars or of any conversion of LIBOR
Rate Committed Loans denominated in Dollars to Base Rate Committed Loans, (ii) four
Business Days prior to the requested date of any Borrowing or continuation of
LIBOR Rate Committed Loans denominated in Alternative Currencies. Each such
telephonic notice must be confirmed promptly by delivery to the Administrative
Agent of a written Committed Loan Notice, appropriately completed and signed by
a Responsible Officer of the Borrower. Each Committed Borrowing of, conversion
to or continuation of LIBOR Rate Committed Loans in Dollars shall be in a
principal amount of $1,000,000 or a whole multiple of $100,000 in excess
thereof. Each Committed Borrowing of, conversion to or continuation of LIBOR
Rate Committed Loans in Alternative Currencies shall be in a minimum amount of
1,000,000 currency units or a multiple of 100,000 currency units in excess
thereof. Each Committed Borrowing of or conversion to Base Rate Committed Loans
shall be in a principal amount of $100,000 or a whole multiple of $50,000 in
excess thereof. Each Committed Loan Notice (whether telephonic or written)
shall specify (i) whether the Borrower is requesting a Committed
Borrowing, a conversion of Committed Loans from one Type to the other, or a
continuation of Committed Loans as the same Type, (ii) the requested date
of the Borrowing, conversion or continuation, as the case may be (which shall
be a Business Day), (iii) the principal amount of Committed Loans to be
borrowed, converted or continued, (iv) the Type of Committed Loans to be
borrowed or to which existing Committed Loans are to be converted, and (v) if
applicable, the duration of the Interest Period with respect thereto, and (vi) the
currency of the Committed Loans to be the borrowed; provided, however,
that if as of the date of any Committed Loan Notice requesting a Committed
Borrowing, there are L/C Borrowings outstanding, the Borrower shall be deemed
to have requested that a portion of the requested Committed Loans in a
principal amount equal to the outstanding principal amount of such L/C
Borrowings be denominated in Dollars. If the Borrower fails to specify a
currency in a Committed Loan Notice requesting a Borrowing, then the Committed
Loans so requested shall be made in Dollars. If the Borrower fails to specify a
Type of Committed Loan in a Committed Loan Notice or if the Borrower fails to
give a timely notice requesting a conversion or continuation, then the
applicable Committed Loans shall be made or continued as, or converted to, Base
Rate Loans; provided, however, that in the case of a failure
to timely request a continuation of Committed Loans denominated in an
Alternative Currency, such Loans shall be continued as LIBOR Rate Loans in
their original currency with an Interest Period of one month. Any automatic
conversion to Base Rate Loans and any continuation of LIBOR Rate Loans provided
for in the preceding sentence shall be effective as of the last day of the
Interest Period


 


33

















 


then
in effect with respect to the applicable LIBOR Rate Committed Loans. If the
Borrower requests a Borrowing of, conversion to, or continuation of LIBOR Rate
Committed Loans in any such Committed Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one
month. No Committed Loan may be converted into or continued as a Committed Loan
denominated in a different currency, but instead must be prepaid in the
original currency of such Loan and reborrowed in the other currency.


 


(b)              Following
receipt of a Committed Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Pro Rata Share of the applicable
Committed Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans or continuation of
Committed Loans denominated in a currency other than Dollars, in each case as
described in subsection (a)  above. In the case of a
Committed Borrowing, each Lender shall make the amount of its Committed Loan
available to the Administrative Agent in Same Day Funds at the Administrative
Agent’s Office for the applicable currency not later than 3:00 p.m.,
Cleveland time in the case of any Committed Loan denominated in Dollars and not
later than the Applicable Time specified by the Administrative Agent in the
case of any Committed Loan in an Alternative Currency, in each case on the
Business Day specified in the applicable Committed Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if such
Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either (i) by
crediting the account of the Borrower on the books of KeyBank with the amount
of such funds or (ii) wire transfer of such funds, in each case in
accordance with instructions provided to the Administrative Agent by the
Borrower; provided, however, that if, on
the date of the Committed Borrowing in Dollars there are L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to
the payment in full of any such L/C Borrowings, and second, to the Borrower as
provided above.


 


(c)               Except as
otherwise provided herein, a LIBOR Rate Committed Loan may be continued or
converted only on the last day of the Interest Period for such LIBOR Rate
Committed Loan. During the existence of a Default or Event of Default, (i) no
Committed Loans may be requested as, converted to or continued as LIBOR Rate
Committed Loans without the consent of the Required Lenders, and (ii) any
or all of the then outstanding LIBOR Rate Committed Loans denominated in an
Alternative Currency shall be prepaid on the last day of the then current
Interest Period with respect thereto.


 


(d)              The
Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any LIBOR Rate Committed Loan upon determination of
such interest rate. The determination of the LIBOR Rate by the Administrative
Agent shall be conclusive in the absence of manifest error. The Administrative
Agent shall notify the Borrower and the Lenders of any change in KeyBank’s
prime rate used in determining the Base Rate promptly following the public
announcement of such change.


 


(e)               After giving
effect to all Committed Borrowings, all conversions of Committed Loans (other
than Swing Line Loans) from one Type to the other, and all


 


34

















 


continuations
of Committed Loans as the same Type, there shall not be more than ten (10) Interest
Periods in effect with respect to Committed Loans.


 


2.03        Letter of Credit Facility.


 


(a)           The Letter of
Credit Commitments.


 


(i)                Subject to the terms and
conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon
the agreements of the other Lenders set forth in this Section 2.03,
(1) from time to time on any Business Day during the period from the
Closing Date until the Letter of Credit Facility Expiration Date, to issue
Letters of Credit denominated in Dollars or in one or more Alternative
Currencies for the account of the Borrower, and to amend or renew Letters of
Credit previously issued by it, in accordance with Section 2.04
below, and (2) to honor drafts under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrower; provided that the L/C Issuer shall not be
obligated to make any L/C Credit Extension with respect to any Letter of
Credit, and no Lender shall be obligated to participate in, any Letter of Credit
if as of the date of such L/C Credit Extension, the Dollar Equivalent of (v) the
Outstanding Amount of all Letter of Credit Facility Obligations would exceed
the Letter of Credit Facility Commitment. The Borrower’s ability to obtain
Letters of Credit under the Letter of Credit Facility shall not be revolving.


 


(ii)               The L/C Issuer shall be
under no obligation to issue any Letter of Credit if:


 


(A)              any order,
judgment or decree of any Governmental Authority or arbitrator shall by its
terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of
Credit;


 


(B)              any Law
applicable to the L/C Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over the
L/C Issuer shall (1) prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit generally or such Letter of Credit in
particular, (2) impose upon the L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the L/C
Issuer is not otherwise compensated hereunder) not in effect on the Closing
Date, or (3) impose upon the L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which the L/C Issuer
in good faith deems material to it, unless, in the case of clauses (2) or
(3), the Borrower shall agree to compensate the L/C Issuer for and hold the L/C
Issuer harmless from any loss, cost or expense incurred by it as a result of
such Law or request or directive from such Governmental Authority pursuant to
the terms of such documents as Borrower and Administrative Agent may agree; or


 


(C)              the expiry date
of such requested Letter of Credit would occur after the Letter of Credit
Expiration Date, unless all the Lenders have approved such expiry date.


 


(iii)              The L/C Issuer shall be
under no obligation to amend any Letter of Credit if (A) the L/C Issuer
would have no obligation at such time to issue such Letter of Credit


 


35

















 


in
its amended form under the terms hereof, or (B) the beneficiary of such
Letter of Credit does not accept the proposed amendment to such Letter of
Credit.


 


(iv)             The L/C Issuer shall be
under no obligation to issue or amend any Letter of Credit if the L/C Issuer
has received written notice from any Lender, the Administrative Agent or any
Loan Party, on or prior to the Business Day prior to the requested date of
issuance or amendment of such Letter of Credit, that one or more applicable
conditions contained in Article IV shall not then be satisfied.


 


2.04        Procedures for Issuance and Amendment of All Letters of Credit. With respect to
a Letter of Credit under the Letter of Credit Facility or a Letter of Credit
under the Letter of Credit Subfacility, the following shall apply:


 


(a)           Issuance and
Amendment.


 


(i)                Each Letter of Credit shall
be issued or amended, as the case may be, upon the request of the Borrower
delivered to the L/C Issuer (with a copy to the Administrative Agent) in the
form of a Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrower. Such. L/C Application must be received by
the L/C Issuer and the Administrative Agent not later than 2:00 p.m.,
Cleveland time, at least two (2) Business Days (or such later date and
time as the L/C Issuer may agree in a particular instance in its sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be. In the case of a request for an initial issuance of a Letter of
Credit, such Letter of Credit Application shall specify in form and detail
reasonably satisfactory to the L/C Issuer: (A) the proposed issuance date
of the requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address
of the beneficiary thereof; (E) the documents to be presented by such
beneficiary, if applicable, in the case of each drawing thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the L/C Issuer may
reasonably require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall specify
in form and detail reasonably satisfactory to the L/C Issuer (A) the
Letter of Credit to be amended; (B) the proposed date of amendment thereof
(which shall be a Business Day); and (C) the nature of the proposed
amendment.


 


(ii)               Promptly after receipt of
any Letter of Credit Application, the L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit Application from the Borrower and,
if not, the L/C Issuer will provide the Administrative Agent with a copy
thereof. Upon receipt by the L/C Issuer of confirmation from the Administrative
Agent (which confirmation shall be binding on L/C Issuer) that the requested
issuance or amendment is permitted in accordance with the terms hereof, then,
subject to the terms and conditions hereof, the L/C Issuer shall, on the
requested date, issue a Letter of Credit for the account of the Borrower or
enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer a risk participation in such Letter of


 


36

















 


Credit
in an amount equal to the product of such Lender’s Pro Rata Share times the
amount of such Letter of Credit.


 


(iii)              Promptly after its delivery
of any Letter of Credit or any amendment to a Letter of Credit to an advising
bank with respect thereto or to the beneficiary thereof, the L/C Issuer will
also deliver to the Borrower and the Administrative Agent a true and complete
copy of such Letter of Credit or amendment.


 


(b)           Drawings and
Reimbursements; Funding of Participations.


 


(i)                   Upon receipt from the
beneficiary of any Letter of Credit of any notice of a drawing under such
Letter of Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof. Not later than 2:00 p.m., Cleveland time, on
the date of any payment by the L/C Issuer under a Letter of Credit (each such
date, an “Honor Date”), the Borrower shall reimburse the L/C Issuer
through the Administrative Agent in an amount equal to the amount of such
drawing and in the applicable currency. If the Borrower fails to so reimburse
the L/C Issuer by such time, the Administrative Agent shall promptly notify
each Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed
Amount”), and such Lender’s Pro Rata Share thereof. In the case of any
Letter of Credit denominated in an Alternative Currency, the Unreimbursed
Amount shall be redenominated into Dollars and equal the Dollar Equivalent
Amount thereof, and the Administrative Agent shall so notify the Lenders in the
notice described in the preceding sentence. In such event, the Borrower shall
be deemed to have requested a Committed Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount (or
the Dollar Equivalent Amount thereof, if applicable), without regard to the
minimum and multiples specified in Section 2.02 for the principal
amount of Base Rate Loans, but subject to the amount of the unutilized portion
of the Aggregate Commitments and the conditions set forth in Section 4.02
(other than the delivery of a Committed Loan Notice). Any notice given by the
L/C Issuer or the Administrative Agent pursuant to this Section 2.04(b)(i) may
be given by telephone if immediately confirmed in writing; provided that
the lack of such an immediate confirmation shall not affect the conclusiveness
or binding effect of such notice.


 


(ii)                  Each Lender
(including the Lender acting as L/C Issuer) shall upon any notice pursuant to Section 2.04(b)(i) make
funds available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent’s Office for Dollar-denominated payments in an
amount equal to its Pro Rata Share of the Unreimbursed Amount (or the Dollar
Equivalent Amount thereof, if applicable) not later than 3:00 p.m., Cleveland
time, on the Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of Section 2.04(b)(iii), each
Lender that so makes funds available shall be deemed to have made a Base Rate
Committed Loan to the Borrower in such amount. The Administrative Agent shall
remit the funds so received to the L/C Issuer.


 


(iii)                 With respect to
any Unreimbursed Amount (or the Dollar Equivalent Amount thereof, if
applicable) that is not fully refinanced by a Committed Borrowing of Base Rate
Loans because the conditions set forth in Section 4.02 cannot be
satisfied, the Borrower shall be deemed to have incurred from the L/C Issuer an
L/C Borrowing in the amount of the Unreimbursed Amount (or the Dollar
Equivalent Amount thereof, if applicable) that is not


 


37

















 


so
refinanced, which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the Default Rate. In such event, each
Lender’s payment to the Administrative Agent for the account of the L/C Issuer
pursuant to Section 2.04(b)(ii) shall be deemed payment in
respect of its participation in such L/C Borrowing and shall constitute an L/C
Advance from such Lender in satisfaction of its participation obligation under
this Section 2.04.


 


(iv)                 Until each
Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.04(b) to
reimburse the L/C Issuer for any amount drawn under any Letter of Credit,
interest in respect of such Lender’s Pro Rata Share of such amount shall be
solely for the account of the L/C Issuer.


 


(v)                  Each Lender’s
obligation to make Committed Loans or L/C Advances to reimburse the L/C Issuer
for amounts drawn under Letters of Credit, as contemplated by this Section 2.04(b),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense
or other right which such Lender may have against the L/C Issuer, the Borrower
or any other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default or Event of Default, or (C) any other occurrence,
event or condition, whether or not similar to any of the foregoing; provided, however,
that each Lender’s obligation to make Committed Loans pursuant to this Section 2.04(b) is
subject to the conditions set forth in Section 4.02. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the L/C Issuer for the amount of any payment made by the
L/C Issuer under any Letter of Credit, together with interest as provided
herein.


 


(vi)                 If any Lender
fails to make available to the Administrative Agent for the account of the L/C
Issuer any amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.04(b) by the time specified in Section 2.04(b)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
Federal Funds Rate from time to time in effect. A certificate of the L/C Issuer
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest
error.


 


(c)           Repayment of
Participations.


 


(i)                   At any time
after the L/C Issuer has made a payment under any Letter of Credit and has
received from any Lender such Lender’s Loan or L/C Advance in respect of such
payment in accordance with Section 2.04(b), if the Administrative
Agent receives for the account of the L/C Issuer any payment related to such
Letter of Credit (whether directly from the Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by the Administrative Agent), or
any payment of interest thereon, the Administrative Agent will distribute to
such Lender its Pro Rata Share thereof in the same funds as those received by
the Administrative Agent.


 


(ii)                  If any payment
received by the Administrative Agent for the account of the L/C Issuer pursuant
to Section 2.04(c)(i) is required to be returned, each Lender


 


38

















 


shall
pay to the Administrative Agent for the account of the L/C Issuer its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned by such Lender, at
a rate per annum equal to the Federal Funds Rate from time to time in effect.


 


(d)           Obligations
Absolute. The obligation of the Borrower to reimburse the L/C
Issuer for each drawing under each Letter of Credit, and to repay each L/C
Borrowing and each drawing under a Letter of Credit that is refinanced by a
Borrowing of Committed Loans, shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including the following:


 


(i)                   any lack of
validity or enforceability of such Letter of Credit, this Agreement, or any
other agreement or instrument relating thereto;


 


(ii)                  the existence
of any claim, counterclaim, set-off, defense or other right that the Borrower
may have at any time against any beneficiary or any transferee of such Letter
of Credit (or any Person for whom any such beneficiary or any such transferee
may be acting), the L/C Issuer or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such Letter of
Credit or any agreement or instrument relating thereto, or any unrelated
transaction;


 


(iii)                 any draft,
demand, certificate or other document presented under such 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; or any loss or
delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;


 


(iv)                 any payment by
the L/C Issuer under such Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such Letter of Credit to
any Person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of such
Letter of Credit, including any arising in connection with any proceeding under
any Debtor Relief Law; or


 


(v)                  any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower;


 


provided that nothing
shall absolve the L/C Issuer of liability for its own gross negligence or
willful misconduct.


 


The
Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and
its correspondents unless such notice is given as aforesaid.


 


39

















 


(e)           Role of L/C
Issuer. Each Lender and the Borrower agree that, in paying any drawing under
a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain
any document (other than any sight draft and certificates and documents
expressly required by the Letter of Credit) or to ascertain or inquire as to
the validity or accuracy of any such document or the authority of the Person
executing or delivering any such document. None of the L/C Issuer, any
Agent-Related Person nor any of the respective correspondents, participants or
assignees of the L/C Issuer shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable; (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower’s pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. None of the L/C issuer, any Agent-Related Person, nor any
of the respective correspondents, participants or assignees of the L/C Issuer,
shall be liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.04(e); provided, however,
that anything in such clauses to the contrary notwithstanding, the Borrower may
have a claim against the L/C Issuer, and the L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the L/C Issuer’s willful misconduct or gross negligence
or the L/C Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s) strictly
complying with the terms and conditions of a Letter of Credit. In furtherance
and not in limitation of the foregoing, the L/C Issuer may accept documents
that appear on their face to be in order, without responsibility for further
investigation, and the L/C Issuer shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.


 


(f)            Cash Collateral. Upon the
request of the Administrative Agent, (i) if the L/C Issuer has honored any
full or partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit
Expiration Date, any Letter of Credit may for any reason remain outstanding and
partially or wholly undrawn, the Borrower shall immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations (in an amount equal to the
Dollar Equivalent of such Outstanding Amount determined as of the date of such
L/C Borrowing or the Letter of Credit Expiration Date, as the case may be). The
Administrative Agent may, at any time and from time to time after the initial deposit
of Cash Collateral, request that additional Cash Collateral be provided in
order to protect against the results of exchange rate fluctuations. The
Borrower hereby grants the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a Lien on all such Cash. Cash Collateral shall be
maintained in blocked, interest bearing Deposit Accounts at KeyBank, and shall
be subject to such Lien documentation as the Administrative Agent shall
reasonably request.


 


40

















 


(g)           Applicability
of UCP. Unless otherwise expressly agreed by the L/C Issuer and the Borrower
when a Letter of Credit is issued, the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the International
Chamber of Commerce (the “ICC”) at the time of issuance (including the
ICC decision published by the Commission on Banking Technique and Practice on April 6,
1998 regarding the European single currency (Euro)) shall apply to each Letter
of Credit.


 


(h)           Letter of
Credit Fees. The Borrower shall pay to the Administrative Agent
(i) for each Standby Letter of Credit issued a 12.5 basis point fronting fee on
the face amount of all letters of credit at the time of issuance (excluding the
rollover of all Existing Letters of Credit) plus commissions, issuance fees,
transfer fees and other customary fees and charges in connection with the
administration of each letter of credit and (ii) for the account of each
Lender in accordance with its Pro Rata Share a Letter of Credit fee for Letters
of Credit, equal to the Applicable LIBOR Rate Margin per annum, in each case (iii) times
the Dollar Equivalent of the actual daily maximum amount under each such Letter
of Credit times a fraction, the numerator of which is the number of days
in the applicable quarter (or portion thereof), and the denominator of which is
360. Such fee for each Letter of Credit shall be due and payable in arrears on
the Business Day immediately following the last Business Day of each March, June,
September and December, commencing with the first such date to occur after
the issuance of such Letter of Credit, and on the Letter of Credit Expiration
Date. If there is any change in the Applicable LIBOR Rate Margin during any
quarter, the actual daily amount of each Letter of Credit shall be computed and
multiplied by the Applicable Margin separately for each period during such
quarter that such Applicable LIBOR Rate was in effect.


 


(i)            Documentary and
Processing Charges Payable to L/C Issuer. The Borrower shall pay
directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time
in effect. Such fees and charges are due and payable on demand and are
nonrefundable.


 


(j)            Conflict with
Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.


 


2.05        Swing Line Loans.


 


(a)           The Swing Line. Subject to
the terms and conditions set forth herein, the Swing Line Lender agrees to make
loans in Dollars (each such loan, a “Swing Line Loan”) to the Borrower
from time to time on any Business Day during the period from the Closing Date
to the Maturity Date in an aggregate amount not to exceed at any time
outstanding the amount of the Swing Line Sublimit, notwithstanding the fact
that such Swing Line Loans, when aggregated with the Dollar Equivalent of the
Outstanding Amount of Committed Loans of the Swing Line Lender in its capacity
as a Lender of Committed Loans, may exceed the amount of such Lender’s
Commitment; provided, however, that after giving effect to
any Swing Line Loan, the Dollar Equivalent of (i) the aggregate
Outstanding Amount of all Loans and L/C Obligations shall not exceed the
Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the
Committed Loans of any Lender, plus such Lender’s Pro Rata Share of the
Outstanding Amount


 


41














 


of all L/C Obligations, plus such Lender’s
Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not
exceed such Lender’s Commitment. Within the foregoing limits, and subject to
the other terms and conditions hereof, the Borrower may borrow under this Section 2.05,
prepay under Section 2.06, and reborrow under this Section 2.05;
provided,  however, that the Swing Line Lender may terminate or
suspend the Swing Line at any time in its sole discretion upon 30 days’ written
notice to the Borrower. Each Swing Line Loan shall be a Base Rate Loan.
Immediately upon the making of a Swing Line Loan, each Lender shall be deemed
to, and hereby irrevocably and unconditionally agrees to, purchase from the
Swing Line Lender a risk participation in such Swing Line Loan in an amount
equal to the product of such Lender’s Pro Rata Share times the amount of such
Swing Line Loan.


 


(b)                                 Borrowing
Procedures. Unless the Swing Line Lender has notified the
Borrower that the Swing Line has been terminated or suspended as provided in Section 2.05(a),
each Swing Line Borrowing shall be made upon the Borrower’s irrevocable notice
to the Swing Line Lender and the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 2:00 p.m., Cleveland time, on the
requested borrowing date, and shall specify (i) the amount to be borrowed,
which shall be a minimum of $100,000 , and (ii) the requested borrowing
date, which shall be a Business Day. Each such telephonic notice must be
confirmed promptly by delivery to the Swing Line Lender and the Administrative
Agent of a written Swing Line Loan Notice, appropriately completed and signed
by a Responsible Officer of the Borrower (or by such other communication means,
timing, and in such minimum amounts agreed to between the Borrower and the
Swing Line Lender, subject to the on-going approval of the Swing Line Lender
and the Administrative Agent). Promptly after receipt by the Swing Line Lender of
any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with
the Administrative Agent (by telephone or in writing) that the Administrative
Agent has also received such Swing Line Loan Notice and, if not, the Swing Line
Lender will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the
request of any Lender) prior to 3:00 p.m., Cleveland time, on the date of
the proposed Swing Line Borrowing (A) directing the Swing Line Lender not
to make such Swing Line Loan as a result of the limitations set forth in the
proviso to the first sentence of Section 2.05(a), or (B) that one
or more of the applicable conditions specified in Article IV is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender will, not later than 4:00 p.m., Cleveland time, on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing
Line Loan available to the Borrower at its office by crediting the account of
the Borrower on the books of the Swing Line Lender in immediately available
funds (alternatively, if an automated funding mechanism is established between
the Borrower and the Swing Line Lender, subject to the on-going approval of the
Swing Line Lender and the Administrative Agent, then the timing and minimum
amounts of funding will be determined by such automated funding mechanism).


 


(c)                                  Refinancing of
Swing Line Loans.


 


(i)                         The Swing Line Lender at any
time in its sole and absolute discretion may request, on behalf of the Borrower
(which hereby irrevocably requests the Swing Line Lender to so request on its
behalf), that each Lender make a Base Rate Committed Loan in an amount equal to
such Lender’s Pro Rata Share of the amount of Swing Line Loans then


 


42

















 


outstanding.
Such request shall be made in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02.
The Swing Line Lender shall furnish the Borrower with a copy of the applicable
Committed Loan Notice promptly after delivering such notice to the
Administrative Agent. Each Lender shall make an amount equal to its Pro Rata
Share of the amount specified in such Committed Loan Notice available to the
Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent’s Office not later than 4:00 p.m.,
Cleveland time, on the day specified in such Committed Loan Notice, whereupon,
subject to Section 2.05(c)(ii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Committed Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so
received to the Swing Line Lender.


 


(ii)                      If for any reason any
Committed Borrowing cannot be requested in accordance with Section 2.05(c)(i) or
any Swing Line Loan cannot be refinanced by such a Committed Borrowing, the
Committed Loan Notice submitted by the Swing Line Lender shall be deemed to be
a request by the Swing Line Lender that each of the Lenders fund its risk
participation in the relevant Swing Line Loan and each Lender’s payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.05(c)(i) shall
be deemed payment in respect of such participation.


 


(iii)                   If any Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.05(c) by the time specified in Section 2.05(c)(i),
the Swing Line Lender shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to the Swing Line Lender at a rate per annum
equal to the Federal Funds Rate from time to time in effect. A certificate of
the Swing Line Lender submitted to any Lender (through the Administrative Agent)
with respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.


 


(iv)                  Each Lender’s obligation to make Committed
Loans or to purchase and fund risk participations in Swing Line Loans pursuant
to this Section 2.05(c) shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the Swing Line Lender, the Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default or Event of
Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing; provided, however, that
each Lender’s obligation to make Committed Loans pursuant to this Section 2.05(c) is
subject to the conditions set forth in Section 4.02. Any such
purchase of participations shall not relieve or otherwise impair the obligation
of the Borrower to repay Swing Line Loans, together with interest as provided
herein.


 


43

















 


(d)                                 Repayment of
Participations.


 


(i)                         At any time after any Lender
has purchased and funded a participation in a Swing Line Loan, if the Swing
Line Lender receives any payment on account of such Swing Line Loan, the Swing
Line Lender will distribute to such Lender its Pro Rata Share of such payment
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s participation was outstanding and
funded) in the same funds as those received by the Swing Line Lender.


 


(ii)                      If any payment received by
the Swing Line Lender in respect of principal or interest on any Swing Line
Loan is required to be returned by the Swing Line Lender, each Lender shall pay
to the Swing Line Lender its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned, at a rate per annum equal to the Federal Funds
Rate. The Administrative Agent will make such demand upon the request of the
Swing Line Lender.


 


(e)                                  Interest for
Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Lender funds its Base Rate Committed Loan or participation
pursuant to this Section 2.05 to refinance such Lender’s Pro Rata
Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall
be solely for the account of the Swing Line Lender.


 


(f)                                   Payments Directly
to Swing Line Lender. The Borrower shall make all payments of principal
and interest in respect of the Swing Line Loans directly to the Swing Line
Lender.


 


2.06                        Voluntary Prepayment of Loans; Other Prepayment.


 


(a)                                 The Borrower
may, upon notice from the Borrower to the Administrative Agent, at any time or
from time to time voluntarily prepay Committed Loans in whole or in part
without premium or penalty (except as provided in Section 3.05); provided
that (i) such notice must be received by the Administrative Agent not
later than 2:00 p.m., Cleveland time, (A) three (3) Business
Days prior to any date of prepayment of LIBOR Rate Committed Loans, and (B) on
the date of prepayment of Base Rate Committed Loans; (ii) any prepayment
of LIBOR Rate Loans denominated in Dollars shall be whole multiples of
$1,000,000 or a whole multiple of $100,000 in excess thereof; (iii) any
prepayment of Base Rate Committed Loans shall be in a principal amount of
$100,000 or a whole multiple of $50,000 in excess thereof; (iii) any
prepayment of LIBOR Rate Loans denominated in Alternative Currencies shall be
in a minimum amounts of 100,000 currency units or a whole multiple of 100,000
currency units in excess thereof or, in each case, if less, the entire
principal amount thereof then outstanding. Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Committed Loans to
be prepaid. The Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of such Lender’s Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due
and payable on the date specified therein. Any prepayment of a LIBOR Rate Loan
shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each such
prepayment shall be applied to the Committed Loans of the Lenders in accordance
with their respective Pro Rata Shares.


 


44

















 


(b)                                 The Borrower
may, upon notice to the Swing Line Lender (with a copy to the Administrative
Agent), at any time or from time to time, voluntarily prepay Swing Line Loans
in whole or in part without premium or penalty; provided that such
notice must be received by the Swing Line Lender and the Administrative Agent
not later than 2:00 p.m., Cleveland time, on the date of the prepayment.
Each such notice shall specify the date and amount of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the
date specified therein.


 


(c)                                  (i)                                     If the
Administrative Agent notifies the Borrower at any time that the Dollar
Equivalent of the Outstanding Amount of all Loans and L/C Obligations at such
time exceeds an amount equal to 100% of the Aggregate Commitments then in
effect, the Borrower shall, within two (2) Business Days after receipt of
such notice, prepay Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount sufficient to reduce the Dollar Equivalent of such Outstanding
Amount as of such date of payment to an amount not to exceed 100% of the
Aggregate Commitments then in effect. The Administrative Agent may, at any time
and from time to time after the initial deposit of such Cash Collateral,
request that additional Cash Collateral be provided in order to protect against
the results of further exchange rate fluctuations.


 


(ii)                                  If the Administrative
Agent notifies the Borrower at any time that the Dollar Equivalent of the
Outstanding Amount of all Loans denominated in Alternative Currencies at such
time exceeds an amount equal to 100% of the Alternative Currency Sublimit then
in effect, the Borrower shall, within two Business Days after receipt of such
notice, prepay Loans in an aggregate amount sufficient to reduce the Dollar
Equivalent of such Outstanding Amount as of such date of payment to an amount
not to exceed 100% of the Alternative Currency Sublimit then in effect. The
Administrative Agent may, at any time and from time to time after the initial
prepayment, request that additional prepayments be provided in order to protect
against the results of exchange rate fluctuations.


 


2.07                        Mandatory
Prepayment of Loans.


 


(a)                                 If the Borrower
or any Guarantor shall at any time or from time to time make or agree to make a
Disposition of any Collateral or unencumbered assets in excess of the Threshold
Amount (other than Dispositions expressly permitted under Sections 7.05(a),
(b), (c), (d), (e), (f), (g), (h), (i), (j) and (1) or shall
suffer an Event of Loss in excess of the Threshold Amount, or shall obtain Net
Proceeds of any debt of Borrower (other than Indebtedness permitted under Section 7.03),
or equity issuance of Borrower (other than equity issued in favor of Sponsors
and EAC Shareholders) then the Borrower shall promptly notify the
Administrative Agent of (i) such proposed Disposition or Event of Loss; (ii) any
debt or equity issuance (including the amount of the estimated Net Proceeds to
be received by the Borrower or such Subsidiary in respect thereof) and (iii) promptly
upon, and in no event later than 10 days after receipt by the Borrower or the
Guarantor of the Net Proceeds of such Disposition or Event of Loss or debt or
equity issuance, the Borrower shall prepay Loans in an aggregate amount equal
to the amount of such Net Proceeds (in excess of the Threshold Amount,) and
reasonable costs applicable to the disposition; provided that Net
Proceeds may be reinvested in assets useful to the business of the Loan Parties
within 180 days (which assets do not need to be of the same type as


 


45

















 


the
assets sold or otherwise disposed of to generate such Net Proceeds (ii) Net
Proceeds that result from insurance receipts (not in excess of the Threshold
Amount to be reinvested in the business within 180 days); and (iii) Net
Proceeds of any debt (other than as permitted under Section 7.03), equity
issuance (other than equity issued in favor of the Sponsors and EAC
Shareholders).


 


(b)                                 Any prepayments
pursuant to this Section 2.07 shall be applied (i) first,
to the payment in full of Base Rate Committed Loans then outstanding, (ii) second,
to the payment in full of LIBOR Rate Committed Loans then outstanding in direct
order of Interest Period maturities, (iii) third, to Cash
Collateralize the L/C Obligations and (iv) fourth, to the Borrower;
provided,  however, that if the amount of Base Rate Loans then
outstanding is not sufficient to satisfy the entire prepayment requirement, the
Borrower may, at its option, place any amounts which it would otherwise be
required to use to prepay LIBOR Rate Committed Loans on a day other than the
last day of the Interest Period therefor in a blocked, interest bearing Deposit
Account at KeyBank, subject to a Lien in favor of the Administrative Agent on
behalf of the Lenders until the end of such Interest Period at which time such
Cash Collateral will be applied to prepay such LIBOR Rate Committed Loans. The
Borrower shall pay, together with each prepayment under this Section 2.07,
accrued interest on the amount prepaid and any amounts required pursuant to Section 3.05.


 


2.08                        Voluntary
Reduction or Termination of Commitments. The Borrower may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or
permanently reduce the Aggregate Commitments to an amount not less than the
then Outstanding Amount of all Loans and L/C Obligations; provided that (i) any
such notice shall be received by the Administrative Agent not later than 2:00 p.m.,
Cleveland time, three (3) Business Days prior to the date of termination
or reduction, and (ii) any such partial reduction shall be in an aggregate
amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof. The
Administrative Agent shall promptly notify the Lenders of any such notice of
reduction or termination of the Aggregate Commitments. Once reduced in
accordance with this Section 2.08, the Aggregate Commitments may
not be increased. Any reduction of the Aggregate Commitments shall be applied
to the Commitment of each Lender according to its Pro Rata Share. All facility
fees accrued until the effective date of any termination of the Aggregate
Commitments shall be paid on the effective date of such termination.


 


2.09                        Mandatory
Reduction in Commitments.


 


In
the event of a Disposition or Event of Loss of any Collateral in excess of
$20,000,000, the Revolving Credit Facility shall be permanently reduced by an
amount equal to the Net Proceeds of Disposition or Event of Loss in excess of
$20,000,000. The Administrative Agent shall deliver a notice of the revised
amount of the Revolving Credit Facility to the Borrower and each Lender after
giving effect to any reduction required by this Section 2.09.


 


2.10                        Repayment
of Loans.


 


(a)                                 The Borrower
shall repay to the Lenders on the Maturity Date the aggregate principal amount
of Committed Loans outstanding on such date.


 


46

















 


(b)                                 The Borrower
shall repay each Swing Line Loan on the earlier to occur of (i) the date
five Business Days after such Loan is made and (ii) the Maturity Date.


 


2.11                        Interest.


 


(a)                                 Subject to the
provisions of subsection (b) below, (i) each LIBOR Rate Committed
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the LIBOR Rate for such Interest
Period, plus the Applicable Margin; and (ii) each Base Rate Committed Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate, plus the
Applicable Margin.


 


(b)                                 While any Event
of Default exists at the request of the Required Lenders or after acceleration,
the Borrower shall pay interest on the principal amount of all outstanding
Obligations at the Default Rate. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable
within five (5) Business Days from receipt of written notice from the
Administrative Agent.


 


(c)                                  Interest on
each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest
hereunder shall be due and payable in accordance with the terms hereof before
and after judgment, and before and after the commencement of any proceeding
under any Debtor Relief Law.


 


2.12                        Fees.  In addition to certain fees
described in subsections (h) and (i) of Section 2.04:


 


(a)                                 Unused
Commitment Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Pro Rata Share, an unused
line fee (“Unused Commitment Fee”) that shall accrue on the unused amount
available under the Revolving Credit Facility determined with reference to the
daily average unused portion of the Revolving Credit Facility (including the
Letter of Credit Subfacility and excluding the Letter of Credit Facility)
actually available to be drawn by Borrower at a rate equal to the Applicable
Margin for Unused Commitment Fee, determined quarterly in arrears. The Unused
Commitment Fee shall accrue at all times from the Closing Date until the
Maturity Date and shall be due and payable quarterly in arrears on the last Business
Day of each March, June, September and December, commencing with the first
such date to occur after the Closing Date, and on the Maturity Date.


 


(b)                                 Arrangement and
Agency Fees. Borrower agrees to pay Arranger and Administrative
Agent for their own respective accounts the arrangement and agency fees in the
amounts and at the times specified in the Agent/Arranger Fee Letter.


 


2.13                        Computation
of Interest and Fees.


 


(a)                                 Interest on
Base Rate Loans shall be calculated on the basis of a year of 365 or 366 days,
as the case may be, and the actual number of days elapsed. Computation of all
other types of interest and all fees shall be calculated on the basis of a year
of 360 days and the


 


47

















 


actual
number of days elapsed, which results in a higher yield to the payee thereof
than a method based on a year of 365 or 366 days, or, in the case of interest
in respect of Loans denominated in Alternate Currencies as to which market
practice differs from the foregoing, in accordance with such market practices.
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall bear interest for one day.


 


(b)                                 For the
purposes of the Interest Act (Canada), (i) whenever a rate of interest or
fee rate hereunder is calculated on the basis of a year (the “deemed year”)
that contains fewer days than the actual number of days in the calendar year of
calculation, such rate of interest or fee rate shall be expressed as a yearly
rate by multiplying such rate of interest or fee rate by the actual number of
days in the calendar year of calculation and dividing it by the number of days
in the deemed year, (ii) the principle of deemed reinvestment of interest
shall not apply to any interest calculation hereunder and (iii) the rates
of interest stipulated herein are intended to be nominal rates and not
effective rates or yields.


 


[Remainder of Page Intentionally Left Blank]


 


48

















 


2.14                        Evidence of
Debt.


 


(a)                                 The Credit
Extensions made by each Lender, the rights to principal and interest on such
Credit Extensions, and the ownership of an interest in any Credit Extension
shall be evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business. The
accounts or records maintained by the Administrative Agent and each Lender
shall be conclusive absent manifest error of the amount of the Credit
Extensions made by the Lenders to the Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Loans or L/C Obligations. In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error. Upon the request of any Lender made through the
Administrative Agent, such Lender’s Loans may be evidenced by a Committed Loan
Note, or a Swing Line Note, as applicable in addition to such accounts or
records. Each Lender may attach schedules to its Note(s) and endorse
thereon the date, Type (if applicable), amount and maturity of the applicable
Loans and payments with respect thereto.


 


(b)                                 In addition to
the accounts and records referred to in subsection (a) above, each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit or Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative
Agent and the accounts and records of any Lender in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.


 


(c)                                  On each date
when the payment of any principal, interest or fees are due hereunder or under
any Note, the Borrower agrees to maintain on deposit in an ordinary checking
account maintained by Borrower with Administrative Agent (as such account shall
be designated by the Borrower in a written notice to the Administrative Agent
from time to time, the “Borrower Account”) an amount sufficient to pay
such principal, interest or fees in full. The Borrower hereby authorizes the
Administrative Agent (i) to deduct automatically all principal, interest
or fees when due hereunder, or under the Notes from the Borrower Account, and (ii) if
and to the extent any payment under this Agreement or any other Loan Document
is not made when due, to deduct automatically any such amount from any or all
of the accounts of the Borrower maintained with Administrative Agent. The
Administrative Agent agrees to provide timely notice to the Borrower of any
automatic deduction made pursuant to this subsection (c).


 


2.15                        Payments
Generally.


 


(a)                                 All payments to
be made by the Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, and except with respect to principal and interest on Loans
denominated in an Alternate Currency, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the applicable Administrative Agent’s
Office in Dollars and in Same Day Funds not later than


 


49

















 


3:00 p.m.,
Cleveland time, on the date specified herein. Except as otherwise expressly
provided herein, all payments by the Borrower hereunder with respect to
principal and interest on Loans denominated in an Alternative Currency shall be
made to the Administrative Agent, for the account of the respective Lenders to
which such payment is owed, at the applicable Administrative Agent’s Office in
such Alternative Currency and in Same Day Funds not later than the Applicable
Time specified by the Administrative Agent on the dates specified herein. The
Administrative Agent will promptly distribute to each Lender its Pro Rata Share
(or other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender’s Lending Office. All payments
received by the Administrative Agent (i) after 3:00 p.m., Cleveland
time in the case of payments in Dollars or (ii) later than the Applicable
Time specified by the Administrative Agent in the case of payment in an
Alternate Currency, shall, in each case, be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.


 


(b)                                 Subject to the
definition of “Interest Period,” if any payment to be made by the
Borrower shall come due on a day other than a Business Day, payment shall be
made on the next following Business Day.


 


(c)                                  If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all amounts of principal, L/C Borrowings, interest and fees then due
hereunder, such funds shall be applied in the following order: (i) first,
toward costs and expenses (including Attorney Costs and amounts payable under Article III)
incurred by the Administrative Agent and each Lender, (ii) second,
toward repayment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (iii) third, toward repayment of
principal and L/C Borrowings then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and L/C Borrowings
then due to such parties.


 


(d)                                 Unless the
Borrower or any Lender has notified the Administrative Agent prior to the date
any payment is required to be made by it to the Administrative Agent hereunder,
that the Borrower or such Lender, as the case may be, will not make such
payment, the Administrative Agent may assume that the Borrower or such Lender,
as the case may be, has timely made such payment and may (but shall not be so
required to), in reliance thereon, make available a corresponding amount to the
Person entitled thereto. If and to the extent that such payment was not in fact
made to the Administrative Agent in Same Day Funds, then:


 


(i)                         if the Borrower failed to
make such payment, each Lender shall forthwith on demand repay to the
Administrative Agent the portion of such assumed payment that was made
available to such Lender in Same Day Funds, together with interest thereon in
respect of each day from and including the date such amount was made available
by the Administrative Agent to such Lender to the date such amount is repaid to
the Administrative Agent in Same Day Funds, at the applicable Overnight Rate
from time to time in effect; and


 


(ii)                      if any Lender failed to make
such payment, such Lender shall forthwith on demand pay to the Administrative
Agent the amount thereof in Same Day Funds, together with interest thereon for
the period from the date such amount was made available by the Administrative
Agent to the Borrower to the date such amount is recovered by the


 


50

















 


Administrative
Agent (the “Compensation Period”) at a rate per annum equal to the
applicable Overnight Rate from time to time in effect. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Committed Loan included in the applicable Borrowing. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which the Administrative Agent or the Borrower
may have against any Lender as a result of any default by such Lender
hereunder.


 


A
notice of the Administrative Agent to any Lender with respect to any amount
owing under this subsection (e) shall be conclusive, absent
manifest error.


 


(e)                                  If any Lender
makes available to the Administrative Agent funds for any Loan to be made by
such Lender as provided in the foregoing provisions of this Article II,
and the conditions to the applicable Credit Extension set forth in Article IV
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.


 


(f)                                   The obligations
of the Lenders hereunder to make Committed Loans and to fund participations in
Letters of Credit and Swing Line Loans are several and not joint. The failure
of any Lender to make any Committed Loan or to fund any such participation on
any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Committed Loan
or purchase its participation.


 


(g)                                  Nothing herein
shall be deemed to obligate any Lender to obtain the funds for any Loan in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan in any particular place
or manner.


 


2.16                        Sharing of Payments.  If, other than
as expressly provided elsewhere herein, any Lender shall obtain on account of
the Committed Loans made by it, or the participations in L/C Obligations or in
Swing Line Loans held by it (but not including any amounts applied by the Swing
Line Lender to outstanding Swing Line Loans), any payment in cash or otherwise
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders
such participations in the Committed Loans made by them and/or such
subparticipations in the participations in L/C Obligations or Swing Line Loans
held by them, as the case may be, as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Committed
Loans or such participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender, such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of
such paying Lender’s required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender may, to the fullest extent permitted by law, exercise all its


 


51














 


rights
of payment (including the right of set-off) but subject to Section 10.09
with respect to such participation, as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. The
Administrative Agent will keep records (which shall be conclusive and binding
in the absence of manifest error) of participations purchased under this Section 2.16
and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section 2.16
shall from and after such purchase have the right to give all notices,
requests, demands, directions and other communications under this Agreement
with respect to the portion of the Obligations purchased to the same extent as
though the purchasing Lender were the original owner of the Obligations
purchased.


 


2.17                        Security and Guaranty.


 


(a)                                 Security. All of the
obligations of the Loan Parties under this Agreement, the Notes and each of the
other Loan Documents to which such Loan Parties are a party shall be secured by
the Collateral in accordance with the Collateral Documents.


 


(b)                                 Guaranty. All of the
obligations of the Borrower under this Agreement, the Notes and each of the
other Loan Documents to which the Borrower is a party shall be unconditionally
guaranteed by the Guarantors pursuant to the Guaranty Agreements.


 


III.


TAXES, YIELD PROTECTION AND ILLEGALITY


 


3.01                        Taxes.


 


(a)                                 Except as
provided in Section 3.01(f) and subsections (d) and
(e) of Section 10.07, any and all payments by the Borrower
or any Guarantors to or for the account of the Administrative Agent or any
Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities with
respect thereto (“Taxes”), excluding, in the case of the
Administrative Agent and each Lender, (i) Taxes imposed on or measured by
its overall net or gross income, and franchise Taxes imposed on it (in lieu of
net income Taxes) by the jurisdiction (or any political subdivision thereof)
under the Laws of which the Administrative Agent or such Lender, as the case
may be, is organized or maintains a lending office, or (ii) any branch
profits tax imposed by the United States or any similar tax imposed by any
other jurisdiction (all such non-excluded Taxes being hereinafter referred to
as “Indemnified Taxes”). If the Borrower or any Guarantor shall be
required by any Laws to deduct any Indemnified Taxes from or in respect of any
sum payable under any Loan Document to the Administrative Agent or any Lender, (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.01), each of the Administrative Agent and such
Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay or shall cause a Subsidiary to pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable Laws, and (iv) within thirty (30) days after the date of such
payment, the Borrower shall furnish or shall cause a Guarantor to furnish to
the Administrative Agent


 


52

















 


(which
shall forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof.


 


(b)                                 Except as
provided in Section 3.01(f) and subsections (d) and
(e) of Section 10.07, in addition, the Borrower agrees to
pay or to cause a Guarantor to pay any and all present or future stamp, court,
documentary or similar taxes and any other excise or property Taxes or charges
or similar levies which arise from any payment made under any Loan Document or
from the execution, delivery, performance, enforcement or registration of any
Loan Document (hereinafter referred to as “Other Taxes”).


 


(c)                                  Intentionally
omitted.


 


(d)                                 Except as
provided in Section 3.01(f) and subsections (d) and
(e) of Section 10.07, the Borrower’s agreement to indemnify
the Administrative Agent and each Lender for the full amount of Indemnified
Taxes and Other Taxes (including any Indemnified Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section 3.01)
paid by the Administrative Agent and such Lender, is without regard to whether
or not such Indemnified Taxes or Other Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. Payment under this subsection
(d) shall be made within thirty (30) days after the date the Lender or
the Administrative Agent makes a demand therefor.


 


(e)                                  Each Lender
that is not a “United States person” within the meaning of Section 7701(a)(30)
of the Code (a “Foreign Lender”), on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender that is a
party hereto on the date of execution of this Agreement and on or prior to the
date on which it becomes a Lender in the case of each other Lender (including,
without limitation, a Lender that is an assignee or transferee of an interest
under this Agreement), and from time to time thereafter if (x) a lapse in
time or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect or (y) requested in writing by the
Borrower or the Administrative Agent, shall provide the Borrower and the
Administrative Agent with two accurate and complete original signed copies of
IRS Form W-8BEN or W-8ECI, as appropriate, or any successor form
prescribed by the IRS, either evidencing a complete exemption from United
States withholding tax on payments pursuant to this Agreement or any other Loan
Document or certifying that all amounts receivable pursuant to this Agreement
and any other Loan Document are effectively connected with the conduct of a
trade or business in the United States. In addition, each Lender that is a “United
States person” within the meaning of Section 7701(a)(30) of the Code on or
prior to the date of its execution and delivery of this Agreement in the case
of each Lender that is a party hereto on the date of execution of this
Agreement and on or prior to the date on which it becomes a Lender in the case
of each other Lender (including, without limitation, a Lender that is an
assignee or transferee of an interest under this Agreement), and from time to
time thereafter if (C) a lapse in time or change in circumstances renders
the previous certification obsolete or inaccurate in any material respect or (D) requested
in writing by the Borrower or the Administrative Agent, shall provide the
Administrative Agent with two accurate and complete signed copies of IRS Form W-9
or any successor form prescribed by the IRS, certifying that such Lender is a “United
States person.” If such Lender fails to deliver such form, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the
Code, without reduction.


 


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(f)                                   For any period
with respect to which, for any reason, a Lender has failed to provide the
Administrative Agent with the applicable form pursuant to Section 3.01(e),
unless such failure is the result of a change in Law occurring after the date
upon which such lender becomes a Lender, such Lender shall not be entitled to
indemnification under Section 3.01(a), 3.01(b) or 3.01(d) with
respect to any Taxes that would not have been imposed had such Lender been able
to provide, and provided, such form.


 


(g)                                  If the Borrower
is required to pay additional amounts to or for the account of any Lender
pursuant to this Section 3.01, then such Lender will agree to use
reasonable efforts to change the jurisdiction of its Applicable Lending Office
so as to eliminate or reduce such additional payment which may thereafter
accrue if such change, in the sole judgment of such Lender, is not otherwise
materially disadvantageous to such Lender; provided, that in determining
whether changing the jurisdiction of an Applicable Lending Office would be
disadvantageous to such Lender, such Lender shall disregard any economic
disadvantage that the Borrower agrees to indemnify and hold such Lender
harmless from.


 


(h)                                 If any Lender
receives or realizes any refund or Tax, any reduction of, or credit against,
its Tax liabilities or otherwise recovered any amount in connection with any
deduction or withholding, or payment of additional amounts, by the Borrower
pursuant to Section 3.01, such Lender shall reimburse the Borrower
an amount equal to the net benefit, after Tax, that was obtained by the Lender
as a consequence of such refund, reduction, credit or recovery.


 


3.02                        Illegality.  If any Lender
determines that any Law has made it unlawful, or that any Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable
Lending Office to make, maintain or fund LIBOR Rate Loans, or to determine or
charge interest rates based upon the LIBOR Rate, or any Governmental Authority
has imposed material restrictions on the authority of such Lender to purchase
or sell, or to take deposits in the London interbank market, in each case after
the date hereof, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
LIBOR Rate Loans or to convert Base Rate Committed Loans to LIBOR Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Promptly upon making any such determination, such Lender shall provide
notice thereof to the Borrower (with a copy to the Administrative Agent), and
upon receipt of such notice, the Borrower shall, within three (3) Business
Days of receipt of written notice from such Lender, prepay or convert all such
LIBOR Rate Loans of such Lender to Base Rate Loans, either on the last day of
the Interest Period therefor, if such Lender may lawfully continue to maintain
such LIBOR Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such LIBOR Rate Loans. Upon any such prepayment
or conversion, the Borrower shall also pay interest on the amount so prepaid or
converted. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such
Lender.


 


3.03                        Inability to Determine Rates.  If the
Administrative Agent determines in connection with any request for a LIBOR Rate
Loan or a conversion to or continuation thereof that (i) deposits are not
being offered to banks in the London interbank market for the applicable


 


54

















 


amount
and Interest Period of such LIBOR Rate Loan, (ii) adequate and reasonable
means do not exist for determining the LIBOR Rate for such LIBOR Rate Loan, or (iii) the
LIBOR Rate for such LIBOR Rate Loan does not adequately and fairly reflect the
cost to the Lenders of funding such LIBOR Rate Loan, the Administrative Agent
will promptly notify the Borrower and all Lenders. Thereafter, the obligation
of the Lenders to make or maintain LIBOR Rate Loans shall be suspended until
the Administrative Agent notifies Borrower and all Lenders that it has revoked
such notice. Upon receipt of such notice, the Borrower may revoke any pending
request for a Borrowing, conversion or continuation of LIBOR Rate Committed
Loans or, failing that, will be deemed to have converted such request into a
request for a Committed Borrowing of Base Rate Loans in the amount specified
therein.


 


3.04                        Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurocurrency Rate Loans. 


 


(a)                                 If any Lender
determines that as a result of the introduction of or any change in or in the
interpretation of any Law, or such Lender’s compliance therewith, in each case
after the date hereof, there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurocurrency Rate Loans
or (as the case may be) issuing or participating in Letters of Credit, or a
reduction in the amount received or receivable by such Lender in connection
with any of the foregoing (excluding for purposes of this subsection (a) any
such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section 3.01 shall govern), (ii) changes
in the basis of taxation of overall net income or overall gross income by the
United States or any foreign jurisdiction or any political subdivision of
either thereof under the Laws of which such Lender is organized or has its
Lending Office, or (iii) reserve requirements contemplated by Section 3.04(c),
and the result of any of the foregoing shall be to increase the cost to the
affected Lender(s) of, or to reduce the amount of any such received or
receivable by such Lender in respect of, making, continuing, maintaining or
financing (or its obligation to make, continue, maintain or finance) any Loan
as, or of converting (or of its obligation to convert) any Base Rate Loan into,
a LIBOR Rate Loan by an amount deemed by such Person to material, then the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.


 


(b)                                 If any Lender
determines that the introduction of any Law regarding capital adequacy or any
change therein or in the interpretation thereof, or compliance by such Lender
(or its Lending Office) therewith, in each case after the date hereof, has the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender’s
obligations hereunder (taking into consideration its policies with respect to
capital adequacy to a level below that which the affected Lender or such
controlling Person would have achieved but for the occurrence of any such
circumstance, and such Lender or controlling Person considers such level to be
material, then the Borrower shall pay to such Lender such additional amounts as
will compensate such Lender for such reduction.


 


(c)                                  The Borrower
shall pay to each Lender, as long as such Lender shall be required to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”),
additional interest on the unpaid principal amount of each LIBOR Rate Loan
equal to the actual costs of such reserves allocated to such Loan by such
Lender (as determined by such Lender in good


 


55

















 


faith), which shall be due and payable on each date on
which interest is payable on such Loan, provided the Borrower shall have
received at least fifteen (15) days’ prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender.


 


(d)                                           Amounts required to be paid by the Borrower pursuant to subsections
(a), (b), and (c)
above shall be determined by the applicable Lender, and notified to the
Borrower (with a copy to the Administrative Agent) in the form of a certificate
of such Lender stating that the calculations set forth therein are in
accordance with the terms of this Agreement and setting forth in reasonable
detail the basis for such calculations for losses suffered from and after the
date that is 180 days before the day such Lender notifies the Borrower thereof,
such certificate being conclusive and binding for all purposes absent manifest
error. The amount set forth in such certificate shall be payable by the
Borrower on the thirtieth (30th) day following delivery of such certificate to
the Borrower.


 


(e)                                            If, with respect to any Lender entitled to compensation under this Section 3.04,
a condition arises or an event occurs which could result in the payment of any
amount under subsections (a) through (c) above, such Lender, promptly upon becoming aware of
the same, shall notify the Borrower thereof and shall take such steps as may be
reasonably necessary for it to mitigate the effects of such condition or event,
provided, that such Lender shall be under no obligation to take any step
that the Lender determines, in its sole discretion, would be disadvantageous to
Lender.


 


3.05                        Funding Losses. The
Borrower shall, subject to and in accordance with subsection (d) below,
promptly compensate such Lender for and hold such Lender harmless from any
loss, cost or expense incurred by it as a result of:


 


(a)                                           any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);


 


(b)                                           any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower;


 


(c)                                            any prepayment of a LIBOR Rate Loan denominated in Alternative Currencies;
or


 


(d)                                           any failure by the Borrower to make payment of a drawing under any Letter
of Credit (or interest due thereon) denominated in an Alternative Currency on
its scheduled due date or any payment thereof in a different currency;


 


including any loss of anticipated profits and any loss or
expense arising from the liquidation or reemployment of funds obtained by it to
maintain such Loan or from fees payable to terminate the deposits from which
such funds were obtained, and, in the case of a prepayment under paragraph (c) above,
mark-to-market losses incurred by Lenders in connection with making such
Alternative Currencies available, as determined by Administrative Agent in its
sole discretion. The Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.


 


56

















 


For purposes of calculating amounts payable by the
Borrower to the Lenders under this Section 3.05, each Lender shall
be deemed to have funded each LIBOR Rate Committed Loan made by it at the LIBOR
Rate for such Loan by a matching deposit or other borrowing in the London
interbank market for a comparable amount and for a comparable period, whether
or not such LIBOR Rate Committed Loan was in fact so funded.


 


(e)                                            The amount of the loss or expense shall be determined by the Lender and notified
to the Borrower (with a copy to the Administrative Agent) in the form of a
certificate of such Lender stating that the calculations set forth therein are
in accordance with the terms of this Agreement and setting forth in reasonable
detail the basis for such calculations, such certificate being conclusive and
binding for all purposes absent manifest error. The amount set forth in such
certificate shall be payable by the Borrower on the thirtieth (30th) day
following delivery of such certificate to the Borrower. In determining such
amount, the Administrative Agent or such Lender may use any reasonable
averaging and attribution methods.


 


3.06                        Survival. All of the
Borrower’s obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other
Obligations.


 


3.07                        Replacement of Lenders. If (i) either
a Lender defaults in its obligations to fund a Loan pursuant to this Credit
Agreement, or a Lender (a “Non-Consenting Lender”) refuses to consent to
an amendment, modification or waiver of this Credit Agreement that, pursuant to
Section 10.1, requires consent
of 100% of the Lenders or 100% of the Lenders with Obligations directly
affected, or a Lender that imposes charges, costs and expenses unacceptable to
Borrower under Section 3.04 (any such Lender, a “Subject Lender”),
(ii) no Default or Event of Default shall have occurred and be continuing,
(iii) the Borrower has obtained a commitment from another Lender or an
Eligible Assignee to purchase at par the Subject Lender’s Loans and assume the
Subject Lender’s Commitments and all other obligations of the Subject Lender
hereunder, and (iv) such Subject Lender is not an L/C Issuer with respect
to any Letters of Credit outstanding, unless all such Letters of Credit are
terminated or arrangements acceptable to such Issuing Lender (such as a
“back-to-back” letter of credit) are made, then the Borrower may require the
Subject Lender to assign any or all of its Loans and Commitments to such other
Lender, Lenders, Eligible Assignee or Eligible Assignees pursuant to the
provisions of Section 10.07(b) which such Lender, Lenders,
Eligible Assignee or Eligible Assignees is acceptable to Administrative Agent; provided, that, prior to or concurrently with such
replacement, (a) the Subject Lender shall have received payment in full of
all principal, interest, fees and other amounts owing to such Subject Lender
through such date of replacement in respect of the applicable portion of the
Subject Lender’s Commitments to be assigned and a release from its obligations
(relating to the assigned portion) under the Loan Documents, (b) the
processing fee, if any, required to be paid under Section 10.07(b) shall
have been paid to the Administrative Agent, (c) all of the requirements
for such assignment contained in Section 10.7, including the consent of the Administrative Agent
and the receipt by the Administrative Agent of an executed Assignment and Assumption
and other supporting documents, have been fulfilled, and (d) if such
Subject Lender is a Non-Consenting Lender, each assignee shall consent, at the
time of such assignment, to each matter in respect of which such Subject Lender
was a Non-Consenting Lender and the Borrower also requires each other Subject
Lender that is a Non-Consenting Lender to assign its Loans and Commitments.


 


57

















 


IV.


CONDITIONS PRECEDENT TO CREDIT EXTENSIONS


 


4.01                        Conditions
of Initial Credit Extension. The
obligation of each Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent:


 


(a)                                           Unless waived by all the Lenders (or by the Administrative Agent with respect
to immaterial matters or items specified in clause (v) or (vi)
below with respect to which the Borrower has given assurances satisfactory to
the Administrative Agent that such items shall be delivered promptly following
the Closing Date), the receipt of the following by the Administrative Agent,
each of which shall be originals or facsimiles (followed promptly by originals)
unless otherwise specified, each properly executed by a Responsible Officer of
the signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to the Administrative Agent and its
legal counsel:


 


(i)                                               executed counterparts of this Agreement, sufficient in
number for distribution to the Administrative Agent, each Lender and the
Borrower;


 


(ii)                                            Committed Loan Notes executed by the Borrower in favor of each Lender
requesting such a Note, each in a principal amount equal to such Lender’s
Commitment;


 


(iii)                                         Swing Line Note executed by Borrower in favor of the Swing Line Lender
(if it requests such a Note) in the principal sum of the Swing Line Sublimit;


 


(iv)                                        such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may reasonably require to establish the identities of and
verify the authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this Agreement
and the other Loan Documents to which such Loan Party is a party;


 


(v)                                           such evidence as the Administrative Agent may reasonably require to
verify that each Loan Party is duly organized or formed, validly existing, in
good standing and qualified to engage in business in each jurisdiction in which
it is required to be qualified to engage in business, except where failure to
qualify would not have a Material Adverse Effect, including certified copies of
each Loan Party’s Organization Documents, certificates of good standing and/or
qualification to engage in business and tax clearance certificates;


 


(vi)                                        a certificate signed by a Responsible Officer of the Borrower certifying (A) that
the conditions specified in Sections 4.02(a) and (b)  have been satisfied, and (B) that
there has been no event or circumstance since the date of the Audited Financial
Statements which has or could be reasonably expected to have a Material Adverse
Effect;


 


58

















 


(vii)                                     an opinion of counsel to each Loan Party and each EAC Shareholder
substantially in the form of Exhibit I;


 


(viii)                                  evidence that the Existing Credit Agreement has been or concurrently with
the Closing Date is being terminated and all Liens securing obligations under
the Existing Credit Agreement have been or concurrently with the Closing Date
are being released; and


 


(ix)                                        First Lien/Second Lien Intercreditor Agreement executed by Administrative
Agent and Second Lien Lender and acknowledged by Borrower;


 


(x)                                           Aircraft Intercreditor Agreement executed by Administrative Agent and
Term Lender and acknowledged by Borrower;


 


(xi)                                        Revolving Lender/Term Lender Intercreditor Agreement executed by
Administrative Agent and Term Lender and acknowledged by Borrower and EAC
Shareholders;


 


(xii)                                     evidence that Lenders have a first priority perfected security interest
in all Collateral (subject only to Liens expressly permitted to be prior
pursuant to Section 7.01);


 


(xiii)                                  receipt by Administrative Agent of evidence that the Sponsors have filed
any required notices of change of ownership of Borrower with the U.S.
Department of Transportation and has received no objection thereto from the
U.S. Department of Transportation;


 


(xiv)                                 Borrower’s Adjusted EBITDA for the trailing twelve months prior to the
Closing Date, is not be less than $25,000,000;


 


(xv)                                    evidence satisfactory to
Administrative Agent that Borrower’s undrawn availability hereunder immediately
after the Closing Date is not less than $5,000,000;


 


(xvi)                                 evidence satisfactory to Administrative Agent that EAC Acquisition Corp.
has contributed to Borrower a minimum capital investment in the form of (a) common
equity totaling $500.00, (b) preferred equity totaling $34,999,500.00, and
(c) a second lien term loan of not less than $20,000,000 but not more than
$23,000,000;


 


(b)                                           Unless waived by all the Lenders, the receipt of the Collateral Documents
by the Administrative Agent, each of which shall be originals or facsimiles
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Loan Party, each dated the
Closing Date and each in form and substance satisfactory to the Administrative
Agent and their respective legal counsel, together with:


 


(i)                                               acknowledgment copies of all Uniform Commercial Code financing statements
filed, registered or recorded or, in the discretion of Administrative Agent, to
be filed, registered or recorded to perfect the security interests of the
Administrative Agent for the benefit of the Lenders, or other evidence
satisfactory to the Administrative Agent that there


 


59

















 


has been filed, registered or recorded all financing
statements and other filings, registrations and recordings necessary and
advisable to perfect the Liens of the Administrative Agent for the benefit of
the Lenders in accordance with applicable law;


 


(ii)                                            Lien and judgment searches and such termination
statements or other documents as may be necessary to confirm that the
Collateral is subject to no other Liens in favor of any Persons;


 


(iii)                                         all certificates and instruments representing the Collateral, stock
transfer powers executed in blank with signatures;


 


(iv)                                        evidence that the Aircraft and
Flight Equipment Security Agreement has been filed or will contemporaneously
with the Closing be filed with the FAA or other applicable filing office
(foreign or domestic), and Administrative Agent shall have received an opinion
of special FAA counsel and special counsel in any other jurisdiction in which Collateral
is located, in form and substance reasonably satisfactory to Lenders,
concluding that the Aircraft Security and Flight Equipment Agreement is
properly of record with the FAA, or such other applicable filing office, and
Lender’s Lien against the Aircranes, Other Aircraft and equipment described
therein is properly perfected and subject to no prior or senior Liens of record
with the FAA, or such other applicable filing office;


 


(v)                                           evidence that the Liens in favor of Term Lender in the Financed Aircraft
Loan Documents have been, or on the Closing Date will be, perfected by all
necessary filings;


 


(vi)                                        evidence that the Deed of Trust has been filed with the appropriate
recording office, and Administrative Agent shall have received a policy of
title insurance in form and substance satisfactory to Lenders covering the Deed
of Trust and the Real Property;


 


(vii)                                     evidence that all other actions necessary to perfect and protect the first
priority security interest created by the Collateral Documents have been taken;
and


 


(viii)                                  funds sufficient to pay any filing or recording tax or registration or other
fees including, but not limited to, any and all Uniform Commercial Code
financing statements.


 


(c)                                            Standard lenders’ payable endorsements with respect to the insurance policies
or other instruments or documents evidencing insurance coverage on the properties of the
Borrower in accordance with Section 6.07.


 


(d)                                           Any fees required to be paid in accordance with the Agent/Arranger Fee Letter
on or before the Closing Date shall have been paid.


 


(e)                                            Unless waived by the Administrative Agent, the Borrower shall have paid all
Attorney Costs of the Administrative Agent to the extent invoiced prior to or
on the Closing Date, plus such additional amounts of Attorney Costs as shall
constitute its reasonable estimate of Attorney Costs incurred or to be incurred
by it through the closing proceedings (provided that


 


60

















 


following
the Closing Date there shall be a final settling of accounts between the
Borrower and the Administrative Agent with respect to such estimated Attorney
Costs).


 


(f)                                             The Closing Date shall have occurred on or prior to October 31,
2007.


 


4.02                        Conditions to All Credit Extensions and Conversions and
Continuations. The obligation of each Lender to make any Credit
Extension or honor any Request for Credit Extension is subject to the following
conditions precedent:


 


(a)                                           The
representations and warranties of the Borrower contained in Article V  or any other Loan Document,
or which are contained in any document furnished at any time under or in
connection herewith or therewith, shall (i) with respect to
representations and warranties that contain a materiality qualification, be
true and correct, (ii) with respect to representations and warranties that
do not contain a materiality qualification, be true and
correct in all material respects, on and as of the date of such Credit
Extension, conversion or continuation, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that
for purposes of this Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.


 


(b)                                           No Default or
Event of Default shall exist, or would result from such proposed Credit
Extension, conversion or continuation.


 


(c)                                            The
Administrative Agent and, if applicable, the L/C Issuer or the Swing Line
Lender shall have received a Request for Credit Extension in accordance with
the requirements hereof.


 


Each
Request for Credit Extension submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a) and (b)
have been satisfied on and as of the date of the applicable Credit Extension.


 


V.


REPRESENTATIONS AND WARRANTIES


 


The
Borrower represents and warrants to the Administrative Agent and the Lenders
that:


 


5.01                        Existence, Qualification and Power; Compliance with
Laws. The Borrower (a) is a corporation duly organized or formed,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own
its assets and carry on its business and (ii) execute, deliver, and
perform its obligations under the Loan Documents to which it is a party, (c) is
duly qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is
in compliance with all Laws, except in each case referred to in clause (b)(i), (c) or (d), to the extent that failure
to do so could not reasonably be expected to have a Material Adverse Effect.


 


61














 


5.02                        Authorization; No Contravention. The execution, delivery and performance by the Borrower of each Loan
Document to which the Borrower is party, has been duly authorized by all
necessary corporate or other organizational action, and does not and will not (a) contravene
the terms of any of the Borrower’s Organization Documents; (b) conflict
with or result in any breach or contravention of, or the creation of any Lien
under, (i) any Contractual Obligation to which the Borrower is a party for
which Borrower may have a liability in excess of the $5,000,000, or (ii) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which the Borrower or its property is subject; or (c) violate any
material Law.


 


5.03                        Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, any Loan Party of this Agreement or any other Loan
Document, except to the extent the same has been obtained or made.


 


5.04                        Binding Effect. This
Agreement has been, and each other Loan Document to which the Borrower is a
party, when delivered hereunder, will have been, duly executed and delivered by
the Borrower. This Agreement constitutes, and each other Loan Document to which
the Borrower is a party when so delivered will constitute, a legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).


 


5.05                        Financial Statements; No Material Adverse Effect.


 


(a)                                 The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (iii) show all material Indebtedness and
other liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the date thereof.


 


(b)                                 The unaudited quarterly consolidated financial statements (and
consolidating schedules) of the Borrower and its Subsidiaries dated June 30,
2007, and the related Guarantor consolidated statements of income or
operations, shareholders’ equity and cash flows for the fiscal quarter ended on
that date (i) were prepared in accordance with GAAP (excluding footnotes)
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and subject to ordinary, good faith year end audit
adjustments; (ii) fairly present the financial condition of the Borrower
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby; and (iii) show all material Indebtedness and
other liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the date thereof, including liabilities for Taxes, material
commitments and material Indebtedness.


 


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(c)                                  Since the date of the Audited Financial Statements, there has been no event
or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.


 


5.06                        Litigation. Except
as specifically disclosed in Schedule 5.06, there are no actions, suits,
proceedings, claims or disputes pending or, to the knowledge of the Borrower,
threatened in writing, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Borrower or any of its Subsidiaries
or against any of their properties or revenues, and none of the items disclosed
in Schedule 5.06 could reasonably be expected to have a Material Adverse
Effect.


 


5.07                         No Default. Neither
the Borrower nor any Subsidiary is in default under or with respect to any
Contractual Obligation that could be reasonably expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing
or would result from the consummation of the transactions contemplated by this
Agreement or any other Loan Document, including the grant or perfection of the
Liens of the Administrative Agent and the Lenders on the Collateral.


 


5.08                        Ownership of Property; Liens. Each of the Borrower and its Subsidiaries has good record and marketable
title in fee simple to, or valid leasehold interests in, all real property
necessary in the ordinary conduct of its business, except for such defects in
title as could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. As of the Closing Date, the property of the
Borrower and its Subsidiaries is subject to no Liens, other than Liens
permitted by Section 7.01.


 


5.09                        Environmental Compliance. Except as specifically disclosed in Schedule 5.09, the Borrower is
not in violation of any Environmental Laws or the subject of any claims
alleging potential liability or responsibility for violation of any
Environmental Law other than as could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.


 


5.10                        Insurance. The
properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Borrower, in such
amounts, with such deductibles and covering such risks as are shown in the
insurance coverage certificates attached as Schedule 5.10 hereto, and
there has been no change in such coverage.


 


5.11                        Taxes. The
Borrower and its Subsidiaries have filed all Federal, state and other material
tax returns and reports required to be filed, and have paid all Federal, state
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except (a) those which are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
have been provided in accordance with GAAP and (b) those which
individually or in the aggregate do not exceed $500,000 at any time. There is
no proposed tax assessment asserted in writing against the Borrower or any
Subsidiary that would, if made, have a Material Adverse Effect.


 


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5.12                        ERISA Compliance.


 


(a)                                 Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws, except to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect. The prototype plan upon which each Plan that is
intended to qualify under Section 401(a) of the Code is based has
received a favorable determination letter from the IRS and each Plan has been
adopted without any material substantive changes to such prototype plan and, to
the best knowledge of the Borrower, nothing has occurred which would prevent,
or cause the loss of, such qualification.


 


(b)                                 There are no pending or, to the best knowledge of the Borrower,
threatened in writing claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could reasonably be expected
to have a Material Adverse Effect. To the best knowledge of the Borrower, there
has been no “prohibited transaction” (as defined in Section 406 of ERISA)
or breach by any Plan fiduciary of any responsibilities, obligations or duties
under Title IV of ERISA with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.


 


5.13                        Subsidiaries. The Borrower has no Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13, and has no equity investments in any other corporation or entity other
than those specifically disclosed in Part (b) of Schedule 5.13.


 


5.14                        Margin Regulations; Investment Company Act.


 


(a)                                 The Borrower is not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock.


 


(b)                                 None of the Borrower or any Subsidiary is required to be registered as an
“investment company” under the Investment Company Act of 1940.


 


5.15                        Intellectual Property; Etc. The
Borrower and its Subsidiaries own, or possess the right to use, all
Intellectual Property that is necessary for the operation of their respective
businesses (such Intellectual Property, “Material IP”), without conflict with
the rights of any other Person. Except for those items of Intellectual Property
disclosed in Schedule 5.15 and
where it could not reasonably be expected to have a Material Adverse Effect,
all registrations with and applications to Governmental Authorities in respect
of such Intellectual Property are valid and in full force and effect and are
not subject to the payment of any taxes or maintenance fees or the taking of
any interest therein, held by any of the Loan Parties to maintain their
validity or effectiveness. Except for any default which could not reasonably be
expected to have a Material Adverse Effect, none of the Loan Parties is in
default (or with the giving of notice or lapse of time or both, would be in
default) under any license to use such Material IP;
no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Material IP or the validity or effectiveness of any such
Material IP, nor does
the Borrower or any of its Subsidiaries know of any such claim; and, to the
knowledge of the Borrower or any of its Subsidiaries, the use of such Material
IP by the Borrower or any of its Subsidiaries does not infringe on the rights
of any Person.


 


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5.16                        Solvency. On the
Closing Date, the Loan Parties are Solvent (other than as a result of
inter-company transactions) on an individual and on a consolidated basis and
shall be Solvent (other than as a result of inter-company transactions) on an
individual and on a consolidated basis during the term of this Agreement.


 


5.17                        Disclosure. To the
best of Borrower’s knowledge, no statement, information, report, certification,
representation, or warranty when made by any Loan Party or any Responsible
Officer of any Loan Party in any Loan Document or when furnished to the
Administrative Agent or any Lender by or on behalf of any Loan Party in
connection with any Loan Document (including in any and all disclosure
materials furnished by or on behalf of any Loan Party) contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading in any material respect.


 


VI.


AFFIRMATIVE
COVENANTS


 


So long as any Lender shall have any Commitment
hereunder, any Loan or other Obligation shall remain unpaid or unsatisfied, or
any Letter of Credit shall remain outstanding, the Borrower shall, and shall
(except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03, 6.11
and 6.16) cause each Subsidiary to:


 


6.01                        Financial Statements. Deliver
to the Administrative Agent and each Lender, in form and detail reasonably
satisfactory to the Administrative Agent:


 


(a)                                 as soon as available, but in any event within 120 days after the end of
each fiscal year of the Borrower, annual audited consolidated (and unaudited
consolidating schedules) balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal year, and the related statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal
year, all in reasonable detail, and accompanied by a report and opinion of an
independent certified public accountant of nationally recognized standing
reasonably acceptable to the Administrative Agent, which report and opinion
shall be prepared in accordance with GAAP and shall not be subject to any
qualifications or exceptions as to the scope of the audit nor to any
qualifications and exceptions not reasonably acceptable to the Administrative
Agent; and


 


(b)                                 as soon as available, but in any event within forty-five (45) days after
the end of each fiscal quarter of each fiscal year of the Borrower, unaudited
quarterly consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal quarter, and the related Consolidated
and Consolidating statement of income and the statement of cash flows for such
fiscal quarter and for the portion of the Borrower’s fiscal year then ended,
setting forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail and certified by the Director of
Finance or the Chief Financial Officer of the Borrower as fairly presenting the
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.


 


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6.02                        Certificates; Other Information. Deliver
to the Administrative Agent and each Lender, in form and substance reasonably
satisfactory to Administrative Agent:


 


(a)                                 concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), a duly completed Compliance
Certificate (in the form of Exhibit G hereto) signed by the
Director of Finance or the Chief Financial Officer of the Borrower;


 


(b)                                 promptly, such additional information regarding the business, financial
or corporate affairs of the Borrower or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Administrative Agent, at the request of any
Lender, may from time to time reasonably request;


 


(c)                                  within sixty (60) days after the preceding fiscal year end, Borrower’s
annual financial forecast including pro forma balance sheet, income statement
and statement of cash flows (it being understood that forecasts and projections
are subject to many contingencies and risk factors and actual results may vary
materially from the forecasts and the projections).


 


6.03                        Notices. Promptly notify the
Administrative Agent:


 


(a)                                 of the occurrence of any Default or Event of Default;


 


(b)                                 of any dispute, litigation, investigation, or proceeding (or any material
development in the same) or suspension under a Contractual Obligation between
the Borrower or any Subsidiary and any Governmental Authority, in each case
which could reasonably be expected to have a Material Adverse Effect;


 


(c)                                  of any litigation, investigation or proceeding affecting any Loan Party
in which the amount involved exceeds $2,000,000, or in which injunctive relief
or similar relief is sought, which relief, if granted, could reasonably be
expected to have a Material Adverse Effect;


 


(d)                                 of the occurrence of any ERISA Event;


 


(e)                                  upon Borrower’s subsequent knowledge that any material disclosure by
Borrower or any Loan Party fails to comply with Section 5.17; and


 


(f)                                   of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary.


 


Each notice pursuant to this Section 6.03
shall be accompanied by a statement of a Responsible Officer of the Borrower
setting forth details of the occurrence referred to therein and stating what
action the Borrower has taken and proposes to take with respect thereto. Each
notice pursuant to subsection (a) above shall describe with
particularity any and all provisions of this Agreement or other Loan Document
that have been breached.


 


6.04                        Payment of Obligations. Pay and
discharge as the same shall become due and payable (or within any applicable
grace period), all its material obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same (i) are being contested in good
faith by appropriate


 


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proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Borrower or such Subsidiary or
(ii) do not exceed, individually or in the aggregate, $1,000,000 at any
time; (b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; and (c) all material Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.


 


6.05                        Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.04 or 7.05;
(b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct
of its business, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered Intellectual Property, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.


 


6.06                        Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties
and equipment necessary in the operation of its business in good working order
and condition, ordinary wear and tear excepted; (b) make all necessary
repairs thereto and renewals and replacements thereof except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect; (c) use
the standard of care typical in the industry in the operation and maintenance
of its facilities; and (d) maintain its aircraft in accordance with the
requirements Aircraft Security Agreement and the FAA.


 


6.07                        Maintenance of Insurance. In addition to insurance requirements set forth in the Collateral
Documents, maintain with financially sound and reputable insurance companies
not Affiliates of the Borrower, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons; including workers’ compensation insurance, public liability and
property and casualty insurance. All casualty insurance maintained by the Loan
Parties in respect of the Collateral shall name the Administrative Agent as
loss payee, provided that Administrative Agent shall, so long as no
Event of Default has occurred and is continuing, direct the insurer to pay
claims not exceeding $500,000 directly to Borrower, and the amount of the
coverage shall not be reduced by the Borrower without thirty (30) days prior
written notice to the Administrative Agent, and all liability insurance shall
name the Administrative Agent as additional insured for the benefit of the
Lenders, as their interests may appear. Upon written request of the
Administrative Agent, the Borrower shall furnish the Administrative Agent
information in reasonable detail setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with this
Section 6.07 or any Collateral Documents.


 


6.08                        Compliance with Laws. Comply
in all material respects with the requirements of all Laws and all orders,
writs, injunctions and decrees applicable to it or to its business or property,
except in such instances in which (a) such requirement of Law or order,
write, injunction or decree is being contested in good faith by appropriate
proceedings diligently


 


67

















 


conducted; or (b) the failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect.


 


6.09                        Books and Records. (a) Maintain
proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial transactions
and matters involving the assets and business of the Borrower or such
Subsidiary, as the case may be; and (b) maintain such books of record and
account in material conformity with all applicable requirements of any
Governmental Authority having regulatory jurisdiction over the Borrower or such
Subsidiary, as the case may be.


 


6.10                        Inspection Rights. Permit
representatives and independent contractors of the Administrative Agent and
each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with its
directors, officers, and independent public accountants all at the expense of
the Administrative Agent and such Lender at reasonable times during normal
business hours up to two times per year, upon reasonable notice to Borrower; provided, however, that when an Event of Default exists the Administrative Agent or any
Lender (or any of their respective representatives or independent contractors)
may do any of the foregoing, without limitation, at the reasonable expense of
the Borrower at any time during normal business hours and without advance
notice.


 


6.11                        Compliance with ERISA. Do, and
cause each of its ERISA Affiliates to do, each of the following: (a) maintain
each Plan in compliance in all material respects with the applicable provisions
of ERISA, the Code and other Federal or state Laws; (b) cause each Plan
which is qualified under Section 401(a) of the Code to maintain such
qualification; and (c) make all required contributions to any Plan subject
to Section 412 of the Code, except, with respect to each covenant listed
above, in such instances in which the failure to do so could not reasonably be
expected to have a Material Adverse Effect.


 


6.12                        Subsidiaries; Additional Guarantors; Pledge of Capital
Stock.


 


(a)                                 New
Subsidiaries. Promptly notify the
Administrative Agent after any Person becomes a Subsidiary (including any
Transitional Subsidiary) of the Borrower or after an inactive subsidiary of the
Borrower becomes active (“New Subsidiary”), and in such notice set forth with respect to such Person (i) the
date on which such Person became a New Subsidiary, and (ii) all of the
data required to be set forth in Schedule 5.13 with respect to all Subsidiaries; provided, that such notice shall be deemed to supplement Schedule 5.13 for all purposes hereof.


 


(b)                                 Pledge of
Capital Stock. Promptly (and in any
event within thirty (30) days) after any Person becomes a New Subsidiary, the
Borrower shall or shall cause each Guarantor that owns all or any portion of
the Capital Stock of such New Subsidiary (except, with the consent of
Administrative Agent in its reasonable discretion, a Transitional Subsidiary)
to (i) grant a Lien in favor of the Administrative Agent for the ratable
benefit of the Lenders, L/C Issuer and Administrative Agent on (1) 100% of
the Borrower’s or Guarantor’s direct or indirect interest in the Capital Stock
of each such New Subsidiary that is a Domestic Subsidiary, (2) 100% of the
Borrower’s or Guarantor’s direct or indirect interest in the Capital Stock of
each such New Subsidiary that is a Disregarded Foreign Subsidiary whose Capital
Stock is not owned


 


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in any part by a Foreign Subsidiary (other than a
Disregarded Foreign Subsidiary), (3) 65% of the Borrower’s or Guarantor’s
direct or indirect interest in the voting Capital Stock and 100% of the
Borrower’s or Guarantor’s direct or indirect interest in the non-voting Capital
Stock of each such New Subsidiary that is a first tier (after ignoring all
Disregarded Foreign Subsidiaries which may be a direct or indirect stockholder)
Foreign Subsidiary, or (4) the Borrower’s or Guarantor’s direct or indirect
interest in the remaining Capital Stock of any New Subsidiary that was a
Foreign Subsidiary other than a Disregarded Foreign Subsidiary at the time it
became a New Subsidiary but that later became a Disregarded Foreign Subsidiary
(in which event the thirty (30) day period described above shall begin to run
upon the date such Person became a Domestic Subsidiary) to secure the
Obligations (or in the case of a Guarantor, such Guarantor’s obligations under
the Loan Documents to which it is a party) by executing and delivering to the
Administrative Agent a supplement to the Borrower Pledge Agreement, Stock
Pledge Agreement or such other document as the Administrative Agent shall deem
appropriate for such purpose, (ii) deliver to the Administrative Agent all
certificates, instruments or other writings representing or evidencing the
Capital Stock described in clause (i) together with duly executed
instruments of transfer or assignment reasonably satisfactory to the
Administrative Agent, (iii) take such action at each such Person’s own
expense as may be reasonably necessary or otherwise requested by the
Administrative Agent (including, without limitation, any of the actions
described in Section 4.01(b)) to ensure that the Lien described in
clause (i) is a perfected Lien of first priority, and (iv) deliver to
the Administrative Agent upon request in writing favorable opinions of counsel
to each such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to in
clauses (i) and (iii)), all in form, content and scope reasonably
satisfactory to the Administrative Agent. For the avoidance of doubt, the
parties agree that the Lien of the Administrative Agent in Collateral
consisting of Capital Stock of a Foreign Subsidiary that is not a Disregarded
Foreign Subsidiary whose Capital Stock is not owned in any part by a Foreign
Subsidiary (other than a Disregarded Foreign Subsidiary) shall not cover 35% of
the voting Capital Stock of such Foreign Subsidiary.


 


6.13                        Intellectual Property. Take all
necessary actions, including in any proceeding before the United States Patent
and Trademark Office, the Canadian Intellectual Property Office — Trademarks or
the United States Copyright Office to maintain each item of Intellectual
Property of the Borrower and its Subsidiaries material to the business of the
Borrower and its Subsidiaries taken as a whole, including payment of
maintenance fees, filing of applications for renewal, affidavits of use, affidavits
of incontestability and opposition, interference and cancellation proceedings.


 


6.14                        Use of Proceeds. Use the
proceeds of the Credit Extensions (a) to refinance Indebtedness arising
under the Existing Credit Agreement, (b) for transaction costs (including
appraisal fees) related to the negotiation, execution and delivery of the Loan
Documents, and (c) for working capital and other general corporate
purposes, in each case not in contravention of any Law or of any Loan Document.


 


6.15                        Further Assurances.


 


(a)                                 Ensure that all written information, exhibits and reports when furnished
to the Administrative Agent or the Lenders do not and will not contain any
untrue statement of a material fact and do not and will not omit when furnished
to state any material fact or any fact


 


69

















 


necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Administrative Agent and the Lenders and correct any defect or
error that may be discovered therein or in any Loan Document or in the
execution, acknowledgement or recordation thereof.


 


(b)                                 Promptly upon request by the Administrative Agent or the Required Lenders,
do, execute, acknowledge, authorize, deliver, record, re-record, file, re-file,
register and re-register, any and all such further acts, deeds, conveyances,
security agreements, mortgages, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments the
Administrative Agent or such Lenders, as the case may be, may reasonably
require from time to time in order (i) to subject to the Liens created by
any of the Collateral Documents any of the properties, rights or interests
covered by any of the Collateral Documents, (ii) to perfect and maintain
the validity, effectiveness and priority of any of the Collateral Documents and
the Liens intended to be created thereby, and (iii) to assure, convey,
grant, assign, transfer, preserve, protect and confirm to the Administrative
Agent and to the Lenders the rights granted or now or hereafter intended to be
granted to the Lenders under any Loan Document.


 


6.16                        Citizenship. Borrower
is as of the date hereof, and at all times while this Agreement or any Loan
Documents are in effect, shall be, or shall cause the Aircranes operated under
United States registration to be registered in the name of, a “citizen of the
United States” within the meaning of the U.S. Transportation Code, as amended
from time to time and recodified at Section 40102(a)(15) of Title 49 et seq.
Borrower shall not permit any act to be done, or omission to occur, which might
injuriously affect the ability of the Borrower to retain its qualification as a
citizen of the United States (provided, however, that in no event shall such failure be deemed an Event of Default
hereunder if such failure occurs as the result of acts or omissions of
Administrative Agent, Lender of L/C Issuer or Persons acting under their
direction or control).


 


VII.


NEGATIVE
COVENANTS


 


So long as any Lender shall have any Commitment
hereunder, any Loan or other Obligation shall remain unpaid or unsatisfied, or
any Letter of Credit shall remain outstanding, the Borrower shall not, nor
shall it permit any Subsidiary to, directly or indirectly:


 


7.01                        Liens. Create,
incur, assume or suffer to exist, any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the following
(collectively, “Permitted Liens”):


 


(a)                                 Liens pursuant to any Loan Document;


 


(b)                                 Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or extensions thereof, provided that the property covered thereby is not increased and any renewal or
extension of the obligations secured or benefited thereby is permitted by Section 7.03(b);


 


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(c)                                  Liens for Taxes or other governmental charges not yet due or which are
being contested in good faith and by appropriate proceedings diligently
conducted, if adequate reserves with respect thereto are maintained on the
books of the applicable Person in accordance with GAAP;


 


(d)                                 Liens arising from operation of law, statutory liens, or carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than thirty (30) days or
which are being contested in good faith and by appropriate proceedings
diligently conducted if adequate reserves in accordance with GAAP with respect
thereto are maintained on the books of the applicable Person;


 


(e)                                  pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;


 


(f)                                   deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;


 


(g)                                  title exceptions accepted by Administrative Agent in the Deed of Trust,
easements, rights-of-way, restrictions and other similar encumbrances affecting
real property which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of
the applicable Person;


 


(h)                                 Liens securing judgments for the payment of money in an aggregate amount
not in excess of the $1,000,000 (except an amount in excess of the Threshold
Amount to the extent covered by independent third-party insurance as to which
the insurer does not dispute coverage), unless any such judgment remains
undischarged for a period of more than thirty (30) consecutive days during
which execution is not effectively stayed;


 


(i)                                     Liens securing Indebtedness permitted under Section 7.03(e); provided that (i) such Liens do not at any time encumber any property other
than the property financed by such Indebtedness and the proceeds thereof, and (ii) the
Indebtedness secured thereby does not exceed the cost or fair market value,
whichever is lower, of the property being acquired on the date of acquisition;


 


(j)                                    other Liens securing Indebtedness in an aggregate principal amount not to
exceed $3,000,000 at any time outstanding;


 


(k)                                 Liens to secure Capital Expenditures and purchase money financing not to exceed
$7,000,000;


 


(1)                                 Liens securing Permitted Equipment Financing;


 


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(m)                             Liens securing Indebtedness incurred pursuant to clause (t) of Section 7.03;
provided that (i) such Liens do not extend to, or encumber, property which
constitutes Collateral and (ii) such Liens extend only to property of
Foreign Subsidiaries;


 


(n)                                 Liens arising in the ordinary course of business by virtue of any
contractual, statutory or common law provision relating to banker’s Liens,
rights of set-off or similar rights and remedies covering deposit or securities
accounts (including funds or other assets credited thereto) or other funds
maintained with a depository institution or securities intermediary;


 


(o)                                 Liens on the property of a Person existing at the time such Person
becomes a Subsidiary of a Loan Party in a transaction permitted hereunder securing
Indebtedness; provided, however, that any such Lien may not extend to
any other property (other than improvements and accessions thereto and proceeds
of the assets to which such Lien applies) of any Loan Party or any other
Subsidiary that is not a Subsidiary of such Person; provided, further,
that any such Lien was not created in anticipation of or in connection with the
transaction or series of transactions pursuant to which such Person became a
Subsidiary of a Loan Party;


 


(p)                                 Liens on Second Lien Collateral securing the Permitted Second Lien
Financing;


 


(q)                                 Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods;


 


(r)                                    purported Liens evidenced by the filing of precautionary UCC financing statements
relating solely to operating leases of personal property or consignment of
goods entered into in the ordinary course of business;


 


(s)                                   Liens solely on any cash earnest money deposits made by Borrower or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
permitted hereunder;


 


(t)                                    licenses of patents, trademarks and other intellectual property rights granted
by Borrower or any of its Subsidiaries in the ordinary course of business and
not interfering in any material respect with the ordinary conduct of the
business of Borrower or such Subsidiary; and


 


(u)                                 any Lien constituting a replacement, extension, or renewal of any Lien of
the type described in clauses (a) through (t) above.


 


7.02                        Investments. Make any
Investments, except:


 


(a)                                 Investments other than those permitted by subsections (b) through
(p) that are existing on the date
hereof and (i) are Investments in the Subsidiaries listed on Schedule
5.13 or (ii) otherwise listed on Schedule 7.02;


 


72

















 


(b)                                 Investments held by the Borrower or such Subsidiary in the form of Cash,
Cash Equivalents or other short-term marketable securities in accordance with
the Borrower’s investment policy as from time to time in effect;


 


(c)                                  advances to officers, directors and employees of the Borrower and
Subsidiaries in an aggregate amount not to exceed the Threshold Amount at any
time outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;


 


(d)                                 Investments of the Borrower in any Guarantor and Investments of any
Guarantor in the Borrower or in another Guarantor;


 


(e)                                  Investments consisting of advances to Non-Guarantor Subsidiaries
evidenced by or in the nature of, as the case may be, promissory notes, open
accounts or capital contributions excluding trade accounts for services arising
in the ordinary course of business, provided that (i) the aggregate
amount of such Investments does not exceed $1,000,000; provided that, at
the option of the Administrative Agent, each promissory note made by any
Non-Guarantor Subsidiary to whom advances of $100,000 or more have been made
shall have been pledged and delivered to the Administrative Agent for the
ratable benefit of the Lenders and Administrative Agent pursuant to such
documents as the Administrative Agent shall deem appropriate for such purpose
in its reasonable discretion;


 


(f)                                   Investments not to exceed $1,400,000 in connection with Borrower’s purchase
of the interest of Elilario Italia SpA in European Air-Crane SpA;


 


(g)                                  Investments consisting of extensions of credit in the nature of accounts receivable
or notes receivable arising from the sale or lease of goods or services in the
ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;


 


(h)                                 Guaranty Obligations permitted by Section 7.03;


 


(i)                                     Investments permitted by Section 7.04 and Section 7.05;


 


(j)                                    Permitted Acquisitions made by the Borrower or any Subsidiary;


 


(k)                                 Capital Expenditures permitted under Section 7.14;


 


(1)                                 Swap Contracts to the extent permitted hereunder;


 


(m)                             Hedging Agreements to the extent permitted hereunder;


 


(n)                                 Investments (other than Permitted Acquisitions) by a Loan Party or any Subsidiary
thereof in (i) a Subsidiary that is a Loan Party immediately prior to or
contemporaneously with the time of such Investment and (ii) a joint
venture or a Subsidiary that is not a Loan Party; provided that the aggregate
amount of Investments by a Loan Party pursuant to this clause (ii) shall
not exceed an aggregate amount of $1,000,000 at any one time outstanding;


 


73

















 


(o)                                 deposits, prepayments and other credits to suppliers made in the ordinary
course of business consistent with the past practices of the Borrower and its
Subsidiaries; and


 


(p)                                 Investments received in lieu of cash in connection with asset dispositions
to the extent permitted under Section 7.05.


 


7.03                        Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness, except:


 


(a)                                 Indebtedness under the Loan Documents;


 


(b)                                 Indebtedness outstanding on the date hereof and listed on Schedule
7.03 and any refinancings, refundings, renewals or extensions thereof; provided
that the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;


 


(c)                                  Guaranty Obligations of the Borrower, any Guarantor or any Subsidiary (other
than a Non-Guarantor Subsidiary) in respect of Indebtedness otherwise permitted
hereunder of the Borrower, any Guarantor or any Subsidiary;


 


(d)                                 obligations (contingent or otherwise) of the Borrower or any Subsidiary
existing or arising under any Swap Contract or currency risk management
financial instrument, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, property, or cash flows held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person and
not for purposes of speculation or taking a “market view”; and (ii) such
Swap Contract or currency risk management financial instrument does not contain
any provision exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party;


 


(e)                                  Indebtedness in respect of capital leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(i); provided, that the
aggregate amount of all such Indebtedness at any one time outstanding shall not
exceed $7,000,000;


 


(f)                                   Secured or unsecured Indebtedness in an aggregate principal amount not to
exceed $2,000,000 at any time outstanding;


 


(g)                                  Guaranty Obligations of the Borrower in respect of Indebtedness otherwise
permitted hereunder of any Non-Guarantor Subsidiary in an aggregate principal
amount not to exceed the $2,000,000 at any time outstanding;


 


(h)                                 Permitted Equipment Financing;


 


(i)                                     Permitted Second Lien Financing;


 


74

















 


(j)                                    loans or advances among the Loan Parties, (i) loans or advances made
by a Subsidiary of the Borrower (or a Person that would become a subsidiary of
the Borrower after giving effect to such loan or advance) to a Loan Party, (ii) loans
or advances made by any Loan Party in a Subsidiary of the Borrower that is not
a Loan Party so long as such loan or advance is permitted by Section 7.02;


 


(k)                                 Indebtedness of a Person existing at the time such Person becomes a
Subsidiary of a Loan Party in a transaction permitted hereunder (excluding
Capital Leases and purchase money Indebtedness permitted hereunder) in an
aggregate principal amount not to exceed $1,000,000 for all such Persons at any
time outstanding; provided that any such Indebtedness was not created in
anticipation of or in connection with the transaction or series of transactions
pursuant to which such Person became a Subsidiary of a Loan Party;


 


(1)                                 Indebtedness incurred to repurchase Capital Stock of the Borrower from retired,
deceased or terminated employees or directors (including their heirs) of any Loan
Party or Subsidiary to the extent such Indebtedness is not secured and is
subordinated to the Obligations on terms reasonably acceptable to the
Administrative Agent; provided that no more than $1,000,000 in aggregate
principal amount of such Indebtedness may be outstanding at any time;


 


(m)                             earn outs, indemnities and purchase price adjustments pursuant to
Permitted Acquisitions;


 


(n)                                 Indebtedness which may be deemed to exist pursuant to any guaranties,
performance, bid, tender, appeal surety, statutory or similar obligations
incurred in the ordinary course of business;


 


(o)                                 Indebtedness in respect of overdraft protections and otherwise in connection
with deposit accounts, in each case in the ordinary course of business;


 


(p)                                 guaranties in the ordinary course of business of the obligations of suppliers,
landlords, customers and licensees of the Borrower and its Subsidiaries;


 


(q)                                 endorsements for collection, deposit or negotiation and warranties of products
or services, in each case incurred in the ordinary course of business;


 


(r)                                    Indebtedness in respect of employee benefit plans and programs, whether to
current or retired employees, including, without limitation, accrued expenses,
pension liabilities, deferred compensation, bonus plans, option plans, medical,
dental and other health plans and other similar plans providing benefits to
employees entered into in the ordinary course of business (but not including
Indebtedness under employment agreements);


 


(s)                                   Indebtedness arising from judgments, orders or other awards to the extent
not constituting an Event of Default; and


 


(t)                                    Indebtedness of Foreign Subsidiaries which does not exceed $2,000,000 in the
aggregate at any time outstanding.


 


75

















 


7.04                        Fundamental Changes. Merge,
dissolve, liquidate, consolidate with or into another Person, or Dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except that, so long as no Default or Event of Default
exists or would result therefrom:


 


(a)                                 any Subsidiary may merge with (i) the Borrower, provided that
the Borrower shall be the continuing or surviving Person, or (ii) any one
or more other Subsidiaries, provided that when any Guarantor or
wholly-owned Subsidiary is merging with another Subsidiary (which is not a
Guarantor), such Guarantor or wholly-owned Subsidiary shall be the continuing
or surviving Person;


 


(b)                                 any Non-Guarantor Subsidiary may dissolve or liquidate; provided
that the board of directors or senior management of the Borrower has determined
in good faith that the dissolution or liquidation will not be detrimental to
the business of the Borrower and its Subsidiaries taken as a whole;


 


(c)                                  the dissolution, liquidation or winding up of any Transitional
Subsidiary; provided that any assets of such Transitional Subsidiary shall be
transferred to a Loan Party or Subsidiary thereof in connection therewith;


 


(d)                                 Investments permitted under Section 7.02;


 


(e)                                  Dispositions permitted under Section 7.05;


 


(f)                                   the Borrower or any Subsidiary may merge with any Person as part of a
Permitted Acquisition; and


 


(g)                                  any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise), to the Borrower or to another
Subsidiary; provided that if the transferor in such a transaction is a
Guarantor, then the transferee must either be the Borrower or another
Guarantor;


 


7.05                        Dispositions. Make any
Disposition or enter into any agreement to make any Disposition, except:


 


(a)                                 Dispositions of obsolete, worn out property or other property no longer used
or useful in the business of the Loan Parties, whether now owned or hereafter
acquired, in the ordinary course of business;


 


(b)                                 Dispositions of Financed Aircranes, inventory and other property (other than
equipment or real property) in the ordinary course of business (for the
avoidance of doubt, the sale or lease of manufactured and remanufactured
aircranes is within the ordinary course of business);


 


(c)                                  Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property, (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property or (iii) the
board of directors or senior management of the Borrower


 


76

















 


or such Subsidiary has determined in good faith that the
failure to replace such property will not be detrimental to the business of the
Borrower or such Subsidiary;


 


(d)                                 Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; provided that if the transferor of such
property is a Guarantor, the transferee thereof must either be the Borrower or
a Guarantor;


 


(e)                                  Dispositions permitted by Section 7.04;


 


(f)                                   Dispositions not otherwise permitted under this Section 7.05
other than subsections (k) or (m); provided that the
Borrower shall have complied with the requirements of Section 2.07;


 


(g)                                  licenses of Intellectual Property (both exclusive and non-exclusive) in
the ordinary course of business and substantially consistent with past
practice;


 


(h)                                 Investments permitted under Section 7.02;


 


(i)                                     the sale, transfer or disposition of accounts in connection with the
collection or compromise thereof in the ordinary course of business;


 


(j)                                    Capital Stock issued in connection with Permitted Acquisitions;


 


(k)                                 any sale-leaseback arrangements permitted hereby;


 


(1)                                 rights of way, easements, and licenses necessary for the conduct of Borrower’s
or any of its Subsidiaries’ businesses; and


 


(m)                             Dispositions by the Borrower and its Subsidiaries not otherwise permitted
under this Section 7.05; provided that (i) at the
time of such Disposition, no Default shall exist or would result from such
Disposition and (ii) the aggregate book value of all property Disposed of
in reliance on this clause (i) in any fiscal year shall not exceed the
Threshold Amount; provided, however, that any Disposition
pursuant to clauses (a) through (m) shall
be for fair consideration.


 


7.06                        Lease Obligations. Create
or suffer to exist any obligations for the payment of rent for any property
under lease or agreement to lease, except:


 


(a)                                 leases in existence on the date hereof and listed on Schedule 7.06,
and any renewal, extension or refinancing thereof;


 


(b)                                 leases in connection with any sale-leaseback arrangement permitted hereby;


 


(c)                                  capital leases and Synthetic Lease Obligations to the extent permitted by
Section 7.03; and


 


(d)                                 operating leases (other than those constituting Synthetic Lease Obligations)
entered into or assumed by the Borrower or any Subsidiary after the date hereof
in


 


77

















 


the ordinary course of business (for purposes hereof, all
leases of real estate of the Borrower or any Subsidiary shall be deemed
operating leases), but in any case the amount of all minimum future
non-cancelable operating lease payments shall not exceed $4,000,000.


 


7.07                        Restricted Payments. Declare
or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except that:


 


(a)                                 each Subsidiary may make Restricted Payments to the Borrower and to
wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock of such Subsidiary on a pro rata basis based on
their relative ownership interests);


 


(b)                                 the Borrower and each Subsidiary may declare and make dividend payments
or other distributions payable solely in the common stock of such Person;


 


(c)                                  the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire shares of its common stock or other common equity interests or warrants
or options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other
common equity interests;


 


(d)                                 provided no Event of Default has occurred and is continuing under any
Loan Documents, or would result from the consummation of the transactions
contemplated by this clause (d), Borrower may, without Lenders’ prior consent,
make the payments to the Manager for Management Fees under the Management
Agreement in amounts not exceeding $500,000 per annum, plus customary and
reasonable out-of-pocket expenses incurred in connection with performance under
the Management Agreement, and payment of Management Fees shall not be permitted
after the occurrence and during the continuation of an Event of Default, provided that,
upon cure of any such Event of Default as provided hereunder, Management Fees
due and not paid during the continuation of such cured Event of Default shall
be permitted if such payment does not result in a violation of Section 7.13;
and


 


(e)                                  provided no Event of Default has occurred and is continuing under any Loan
Documents, or would result from the consummation of the transactions
contemplated by this clause (e), the Borrower may pay accrued interest payable
in connection with the Permitted Second Lien Financing when and as the same
becomes due.


 


7.08                        ERISA. At any
time engage in a transaction for the principal purpose of evading or avoiding
any liability under Title IV of ERISA as provided in Section 4069 or 4212(c) of
ERISA, or permit any Plan to (a) engage in any non-exempt “prohibited
transaction” (as defined in Section 4975(c) of the Code); (b) fail
to comply with ERISA or any other applicable federal or state Laws; or (c) incur
any material “accumulated funding deficiency” (as defined in Section 302
of ERISA for plan years commencing prior to 2008, or the equivalent term under Section 302
of ERISA for plan years commencing after 2007), which, with respect to each
event listed above, could reasonably be expected to have a Material Adverse
Effect.


 


7.09                        Change in Nature of Business. Engage in any material line of business substantially different from
those lines of business conducted by the Borrower and its Subsidiaries on the
date hereof or any business substantially related or incidental thereto or
cease


 


78

















 


to conduct any line of business that constitutes a
material portion of the business of the Borrower and its Subsidiaries as of the
date hereof.


 


7.10                        Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the
Borrower, whether or not in the ordinary course of business, other than on fair
and reasonable terms substantially as favorable to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the
time in a comparable arm’s length transaction with a Person other than an
Affiliate, provided that (a) the foregoing restriction shall not
apply to transactions between or among the Borrower and any Guarantor or
between and among any Guarantors; (b) the Borrower may make Investments
consisting of advances and capital contributions to Non-Guarantor Subsidiaries
permitted under Section 7.02 at rates of interest that the Borrower
deems reasonable under the circumstances; (c) reasonable and customary
fees may be paid to members of the board of directors (or similar governing
body) of U.S. Borrower or any of its Subsidiaries; (d) compensation,
benefits or indemnification arrangements for officers and other employees of
the Borrower or any of its Subsidiaries may be entered into in the ordinary
course of business; (e) the existence of, and the performance by any Loan
Party of its obligations under the terms of, any organizational documents or
security holders agreement to which it is a party on the Closing Date and which
has been disclosed to the Lenders; (f) Restricted Payments permitted
hereunder; (g) transactions described in Schedule 7.10; (h) transactions
among Subsidiaries of the Borrower that are not Loan Parties; (i) the
transactions contemplated hereby, and (j) the Borrower and any Subsidiary
may engage in any transaction with an Affiliate (x) if such transaction is
in existence as of the date hereof, or (y) with the prior written consent
of the Administrative Agent.


 


7.11                        Burdensome Agreements. Enter
into any Contractual Obligation (other than this Agreement, any other Loan
Document, or the Financed Aircraft Loan Documents) that (a) limits the
ability (i) of any Subsidiary to make Restricted Payments to the Borrower
or any Guarantor or to otherwise transfer property to the Borrower or any
Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness of the
Borrower or (iii) of the Borrower or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person (other than Liens
permitted hereunder); provided, however, that this clause (iv) shall
not prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 7.03(t ) solely to the extent
any such negative pledge relates to the property financed by or the subject of
such Indebtedness and the proceeds thereof; or (b) requires the grant of a
Lien to secure an obligation of such Person if a Lien is granted to secure
another obligation of such Person; provided that the foregoing
restrictions shall not apply to restrictions (i) by reason of customary
provisions restricting assignments, subletting or other transfers contained in
leases, licenses, joint venture agreements and similar agreements entered into
in the ordinary course of business; (ii) that are or were created by
virtue of any transfer of, agreement to transfer or option or right with
respect to any property, assets or Capital Stock not otherwise prohibited under
this Agreement; (iii) in any agreement for the sale or other disposition
of a Subsidiary that restricts distributions by that Subsidiary pending the
sale or other disposition; (iv) in any instrument governing Indebtedness
or Capital Stock of a Person acquired by the Borrower or any of its
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person or the property or assets of the Person, so acquired, provided
that,


 


79

















 


in the case of Indebtedness, such Indebtedness was
permitted by Section 7.03; and (v) restrictions in effect on
the Closing Date and set forth on Schedule 7.11.


 


7.12                        Margin Regulations. Use the
proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose, in each case in violation
of, or for a purpose which violates, or would be inconsistent with, Regulation
T, U or X of the FRB.


 


7.13                        Financial Covenants.


 


(a)                                 Minimum Net Worth. Permit Net Worth of the
Borrower to be less than (i) $20,000,000 as of December 31, 2007, and
(ii) $20,000,000 as of December 31 of each year thereafter, plus an
amount equal to seventy-five percent (75%) of the positive GAAP annual net
income, net of the effect of unrealized gains and losses on unbalanced currency
and interest rate hedging positions, earned in each fiscal year beginning with
the fiscal year ending December 31, 2008, tested at the end of each fiscal
year.


 


(b)                                 Minimum Fixed Charge Coverage Ratio. Permit
the Fixed Charge Coverage Ratio as of the end of any fiscal quarter of the
Borrower to be less than 1.10 to 1.00, beginning with the fiscal quarter ending
December 31, 2007. (For the purposes of calculating the Fixed Charge
Coverage Ratio for the fiscal quarters ending through March 31, 2008,
there shall be excluded from the calculation of Capital Expenditures $3,302,967
associated with N189AC plus $1,724,484 associated with N165AC incurred in
2007).


 


(c)                                  Maximum Total Funded Debt to Adjusted EBITDA Ratio. Permit the Total Funded Debt to Adjusted EBITDA Ratio as of the end of
any fiscal quarter of the Borrower set forth for the preceding four fiscal
quarter periods to be greater than the ratio set forth below opposite such
fiscal quarter:


 


	
  Fiscal Quarters Ending

  	
   

  	
  Maximum Total Funded

  Debt to Adjusted EBITDA

  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2007

  	
   

  	
  4.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  4.75 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2008

  	
   

  	
  4.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2008

  	
   

  	
  4.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2008

  	
   

  	
  4.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  4.50 to 1.00

  	
   

  



 


80

















 


	
  Fiscal Quarters Ending

  	
   

  	
  Maximum Total Funded

  Debt to Adjusted EBITDA

  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2009

  	
   

  	
  4.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2009

  	
   

  	
  4.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2009

  	
   

  	
  4.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2010

  	
   

  	
  4.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2010

  	
   

  	
  4.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2010

  	
   

  	
  4.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2010

  	
   

  	
  3.75 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2011

  	
   

  	
  4.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2011

  	
   

  	
  3.75 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2011

  	
   

  	
  3.75 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2011 and thereafter

  	
   

  	
  3.50 to 1.00

  	
   

  



 


(d)                                 Maximum Senior
Funded Debt to Adjusted EBITDA Ratio. Permit the Senior Funded Debt to Adjusted EBITDA Ratio as of the end of
any fiscal quarter of Borrower set forth for the preceding four fiscal quarter
periods to be greater than the ratio set forth opposite such fiscal quarter:


 


	
  Fiscal Quarters Ending

  	
   

  	
  Maximum Senior Debt to

  Adjusted EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2007

  	
   

  	
  3.75 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  4.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2008

  	
   

  	
  3.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2008

  	
   

  	
  3.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2008

  	
   

  	
  3.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  3.75 to 1.00

  	
   

  



 


81














 


	
  Fiscal Quarters Ending

  	
   

  	
  Maximum Senior Debt to

  Adjusted EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2009

  	
   

  	
  3.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2009

  	
   

  	
  3.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2009

  	
   

  	
  3.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2010

  	
   

  	
  3.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2010

  	
   

  	
  3.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2010

  	
   

  	
  3.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2010

  	
   

  	
  3.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2011

  	
   

  	
  3.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2011

  	
   

  	
  3.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2011

  	
   

  	
  3.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2001 and
  thereafter

  	
   

  	
  2.75 to 1.00

  	
   

  



 


7.14                        Maximum Capital Expenditures. Borrower shall not permit its Capital Expenditures to exceed $7,000,000
in the aggregate during any fiscal year during the term of the Loan, provided
the difference between $7,000,000 less the actual Capital Expenditures in any
given year greater than $0 may be carried over to the immediately following
year and shall not be included in the limitation on Capital Expenditures in
such carry-over year for purposes of this Section 7.14, and provided
further that for the fiscal year ending December 31, 2007 there shall
be excluded from the calculation of Capital Expenditures for such fiscal year
$3,302,967 associated with N189AC plus $1,724,484 associated with N165AC.


 


VIII.


EVENTS OF DEFAULT AND REMEDIES


 


8.01                      Events of Default. The
occurrence of the following events shall constitute an “Event of Default”
hereunder:


 


(a)                                 Non-Payment. The Borrower or any other Loan
Party fails to pay (i) when and as required to be paid herein, and in the
currency required hereunder, any amount of principal of any Loan, or any L/C
Obligation, or (ii) within five (5) days after the same becomes due,
any interest on any Loan or on any L/C Obligation, or any commitment, facility
or other fee due hereunder, or (iii) within five (5) days after the
same becomes due, any other amount payable hereunder or under any other Loan
Document; or


 


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(b)                                 Specific Covenants. The Borrower fails to
perform or observe any term, covenant or agreement contained in any of Sections
6.04, 6.05, 6.11, 6.14, 6.16, 7.01 (for
any Lien senior to the Lenders’ Lien and in excess of the Threshold Amount), 7.04,
7.05, 7.07, 7.08, 7.09, 7.12, or 7.13;
or


 


(c)                                  Other Defaults. Any Loan Party fails to
perform or observe any other material covenant or agreement (not specified in subsection
(a) or (b) above) contained in any of Sections 6.01,
6.02, 6.03, 6.07, 6.09, 6.10, 6.15, 7.01
(to the extent not covered by clause (b) above), 7.03, 7.06,
or 7.11 on its part to be performed or observed and such failure
continues for thirty (30) days; provided, that with respect to any
material covenant or agreement in Sections 6.06, 6.08, 6.12,
6.13, 7.02 or 7.10, such 30-day cure period may be
extended for up to a maximum of 90 days if (i) such failure is curable or correctable,
but reasonably cannot be cured within thirty (30) days, (ii) the Borrower
is diligently pursuing the cure or correction of such failure, and (iii) no
Material Adverse Effect would result from the granting of such extension; or


 


(d)                                 Representations and Warranties. Any
material representation or warranty made or deemed made by the Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith proves to have been incorrect
when made or deemed made, unless such inaccuracy shall not be material to the
recipient at the time when the notice referred to below shall have been
received by the Borrower or any material adverse impact thereof shall have been
cured or corrected within thirty (30) days after the earlier of (i) Borrower
becoming aware of such event, and (ii) receipt by the Borrower of a
written notice thereof from the Administrative Agent or any Lender; or


 


(e)                                  Cross-Default. (i) The Borrower or any
Guarantor (A) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect
of any Indebtedness or Guaranty Obligation (other than Indebtedness hereunder
and Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than the $1,000,000 Amount, or (B) fails to observe or perform any other
material agreement or condition relating to any other Indebtedness or Guaranty
Obligation or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, in each case under this clause (B)
the effect of which default or other event is that the holder or holders of
such Indebtedness or the beneficiary or beneficiaries of such Guaranty
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) shall have caused, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or
offered to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guaranty Obligation to become payable or
Cash Collateral in respect thereof to be demanded; or (ii) there occurs
under any Swap Contract an Early Termination Date (as defined therein or such
equivalent term) resulting from (A) any event of default under such Swap
Contract as to which the Borrower or any Subsidiary is the defaulting party or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrower or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value (as so defined) owed by the Borrower or such
Subsidiary as a result thereof is greater than the


 


83

















 


Threshold Amount; or (iii) an “event of default”
occurs under the Permitted Second Lien Financing or the Permitted Equipment
Financing.


 


(f)                                   Insolvency
Proceedings, Etc. Any Loan Party
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the application
or consent of such Person and the appointment continues undischarged or
unstayed for sixty (60) calendar days; or any proceeding under any Debtor
Relief Law relating to any such Person or to all or any material part of its
property is instituted without the consent of such Person and continues
undismissed or unstayed for sixty (60) calendar days, or an order for relief is
entered in any such proceeding; or


 


(g)                                  Inability to Pay Debts; Attachment. (i) Any Loan Party becomes unable or admits
in writing its inability or fails generally to pay its debts as they become
due, or (ii) any writ or warrant of attachment or execution or similar
process is issued or levied against all or any material part of the property of
any such Person and is not released, vacated or fully bonded within sixty (60)
days after its issue or levy; or


 


(h)                                 Judgments. There is entered against any Loan Party (i) a
final judgment or order for the payment of money in an aggregate amount
exceeding $1,000,000 (or such greater amount to the extent covered by
independent third-party insurance as to which there is no dispute regarding
coverage with respect to such judgment), or (ii) a final non-appealable
non-monetary judgment that could reasonably be expected to have a Material
Adverse Effect, and (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of twenty (20)
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect, or (C) any final
judgment is not paid or otherwise satisfied within a period of twenty (20) days
from the date of judgment; or


 


(i)                                     ERISA. (i) An ERISA Event occurs with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess
of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails
to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$1,000,000; or


 


(j)                                    Change of Control. There occurs any Change of Control with respect to any Loan Party,
except as has been approved in writing by Lenders; or


 


(k)                                 Guarantor Default; Invalidity of Guaranty. Any Guarantor shall fail to perform or observe any
material term, covenant or agreement contained in any Guaranty Agreement on its
part to be performed or observed, or any default shall occur under any Guaranty
Agreement, and any such failure or default shall continue after the applicable
grace period, if any, specified in such Guaranty Agreement as of the date of
such failure, or any


 


84

















 


defined “Event of Default” as defined in any
Guaranty Agreement shall have occurred and is continuing; or any Guaranty
Agreement shall for any reason be revoked or invalidated, or otherwise cease to
be in full force and effect (except as expressly permitted hereunder), or any
Guarantor or any other Person shall contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation
thereunder; or


 


(1)                                 Failure of Security. Any Collateral Document
ceases to be in full force and effect, or is declared by a court of competent
jurisdiction to be null and void, invalid or unenforceable in any respect; or
the Administrative Agent shall not have or shall cease to have a valid and
perfected Lien of first priority (other than Liens expressly permitted to be
prior to such Lien pursuant to Section 7.01) in the Collateral
purported to be covered thereby having a fair market value, individually or in
the aggregate, exceeding $2,000,000, in each case for any reason other than (i) the
agreement of all the Lenders or satisfaction in full of all the Obligations or (ii) the
failure of the Administrative Agent or any Lender to take any action within its
exclusive control; or


 


(m)                             Invalidity of Loan Documents. Any
other Loan Document or any provision thereof, at any time after its execution
and delivery and for any reason other than the agreement of all the Lenders or
satisfaction in full of all the Obligations, ceases to be in full force and
effect, or is declared by a court of competent jurisdiction to be null and
void, invalid or unenforceable in any respect; or any Loan Party denies that it
has any or further liability or obligation under any other Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or


 


(n)                                 Material Adverse Effect. A
Material Adverse Effect occurs, other than an event included within clauses (a) through
(m) above.


 


8.02                        Remedies Upon Event of Default.


 


(a)                                 General Remedies. If any Event of Default
occurs and is continuing, the Administrative Agent shall, at the request of, or
may, with the consent of, the Required Lenders take any or all of the following
actions,


 


(i)                           declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;


 


(ii)                        declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;


 


(iii)                     require
that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to
the Dollar Equivalent Outstanding Amount thereof, as such amount may vary from
time to time); and


 


(iv)                    exercise
on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders under the Loan Documents or applicable Law;


 


85

















 


provided, however,
that upon the occurrence of an actual or deemed entry of an order for relief
with respect to the Borrower under the Bankruptcy Code of the United States,
the obligation of each Lender to make Loans and any obligation of the L/C
Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable, and the obligation of the
Borrower to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, and the Administrative Agent shall have the
right (but shall be under no obligation) to immediately convert any Outstanding
Committed Loans denominated in Alternative Currencies into US Dollar Base Rate
Loans, in each case without further act of the Administrative Agent or any
Lender.


 


(b)                                 Cash Collateral. Regardless of whether
Borrower’s obligations to repay the Loans and/or the Letters of Credit have
been accelerated pursuant to subsection (a) above, so long as any
Event of Default shall have occurred and be continuing, Administrative Agent
may realize on any or all of the Collateral by exercising any remedies provided
in the Collateral Documents. Amounts paid or received under this Agreement or
any other Loan Document after the occurrence of an Event of Default in respect
of (i) issued and outstanding Letters of Credit which exceed amounts paid
by Administrative Agent under such Letters of Credit or (ii) payments or
transfers under any Swap Contract permitted by Section 7.03(d) not
then due, shall be held (and applied) as Cash Collateral to secure the payment
and performance of all indebtedness, liabilities and obligations of Borrower
and its Subsidiaries owing to Agent, any Lender or any Affiliate of any Lender
under the Loan Documents and such Swap Contracts.


 


8.03                        Application of Funds. After
the exercise of remedies provided for in Section 8.02 (or after the
Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to Section 8.02), any amounts received on
account of the Obligations shall be applied by the Administrative Agent in the
following order: 


 


First, to
payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including Attorney Costs and amounts payable under Article III)
payable to the Administrative Agent in its capacity as such;


 


Second, to
payment of that portion of the Obligations constituting fees, indemnities and
other amounts (other than principal and interest) payable to the Lenders
(including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause
Second payable to them;


 


Third, to
payment of that portion of the Obligations constituting (i) accrued and
unpaid interest on the Loans and L/C Borrowings, and (ii) with respect to
any Swap Contract between any Lender or any Affiliate of any Lender, to the
extent such Swap Contract is permitted by Section 7.03(d), any
fees, premiums and scheduled periodic payments due under such Swap Contract and
any interest accrued thereon, ratably among the Lenders and their Affiliates in
proportion to the respective amounts described in this clause Third
payable to them;


 


Fourth, to
payment of that portion of the Obligations constituting (i) unpaid
principal of the Loans and L/C Borrowings, and (ii) with respect to any
Swap Contract or currency risk


 


86

















 


management instrument between any Lender or any Affiliate
of any Lender, to the extent such Swap Contract or currency risk management
instrument is permitted by Section 7.03(d), any breakage,
termination or other payments due under such Swap Contract or currency risk
management instrument and any interest accrued thereon, ratably among the
Lenders and their Affiliates in proportion to the respective amounts described
in this clause Fourth held by them;


 


Fifth, to the
Administrative Agent for the account of the L/C Issuer, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit; and


 


Last, the balance, if any,
after all of the Obligations have been indefeasibly paid in full, to the Borrower
or as otherwise required by Law.


 


Subject to Section 2.04(c), amounts used to
Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant
to clause Fifth above shall be applied to satisfy drawings under such
Letters of Credit as they occur. If any amount remains on deposit as Cash
Collateral after all Letters of Credit have either been fully drawn or expired,
such remaining amount shall be applied to the other Obligations, if any, in the
order set forth above.


 


IX.


ADMINISTRATIVE AGENT


 


9.01                        Appointment
and Authorization of Administrative Agent.


 


(a)                                 Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent. Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in the other Loan
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.


 


(b)                                 The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until
such time (and except for so long) as the Administrative Agent may agree at the
request of the Required Lenders to act for the L/C Issuer with respect thereto;
provided, however, that the L/C Issuer shall have all of the
benefits and immunities (i) provided to the Administrative Agent in this Article IX
with respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of


 


87

















 


Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term “Administrative Agent” as used in this Article IX
included the L/C Issuer with respect to such acts or omissions, and (ii) as
additionally provided herein with respect to the L/C Issuer.


 


9.02                      Delegation of Duties. The
Administrative Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.


 


9.03                      Liability of Administrative Agent. No Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any
Lender or participant for any recital, statement, representation or warranty
made by any Loan Party or any officer thereof, contained herein or in any other
Loan Document, 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, this Agreement or any other Loan Document, or for the
value of or title to any Collateral, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of any Loan Party or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender or participant to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party or any Affiliate thereof.


 


9.04                      Reliance by Administrative Agent.


 


(a)                                 The Administrative Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, signature, resolution, representation, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
statement or other document 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 counsel to any Loan Party),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to
take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if
it so requests, it shall first be indemnified to its reasonable 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 this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders or all the
Lenders, if required hereunder, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and
participants. Where this Agreement expressly permits or prohibits an action
unless the Required Lenders otherwise determine, the


 


88

















 


Administrative Agent shall, and in all other instances,
the Administrative Agent may, but shall not be required to, initiate any
solicitation for the consent or a vote of the Lenders.


 


(b)                                 For purposes of determining compliance with the conditions specified in Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
either sent by the Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender.


 


9.05                        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, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default.” The Administrative Agent
will notify the Lenders of its receipt of any such notice. The Administrative
Agent shall take such action with respect to such Default or Event of Default
as may be directed by the Required Lenders in accordance with Article VIII;
provided, however, that unless and until the Administrative Agent
has received any such direction, 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 or in
the best interest of the Lenders.


 


9.06                        Credit Decision; Disclosure of Information by
Administrative Agent. Each Lender acknowledges
that no Agent-Related Person has made any representation or warranty to it, and
that no act by the Administrative Agent hereafter taken, including any consent
to and acceptance of any assignment or review of the affairs of any Loan Party
or any Affiliate thereof, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender as to any matter, including
whether Agent-Related Persons have disclosed material information in their
possession. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan
Parties and their respective Subsidiaries, the value of and title to any
Collateral, and all applicable bank or other regulatory Laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower and the other Loan Parties
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person 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
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower
and the other Loan Parties. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
herein, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, prospects, operations, property,


 


89

















 


financial and other condition or creditworthiness of any of
the Loan Parties or any of their respective Affiliates which may come into the
possession of any Agent-Related Person.


 


9.07                        Indemnification of Administrative Agent. Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of any Loan Party and without limiting the
obligation of any Loan Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Person’s own gross
negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of
this Section 9.07. Without limitation of the foregoing, each Lender
shall reimburse the Administrative Agent upon demand for its ratable share of
any costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section 9.07 shall survive
termination of the Aggregate Commitments, the payment of all Obligations
hereunder and the resignation or replacement of the Administrative Agent.


 


9.08                        Administrative Agent in its Individual Capacity. KeyBank National Association and its Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with each of the Loan Parties and
their respective Affiliates as though KeyBank National Association were not the
Administrative Agent or the L/C Issuer hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, KeyBank National Association or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
KeyBank National Association shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Administrative Agent or the L/C Issuer, and the terms “Lender”
and “Lenders” include KeyBank National Association in its individual capacity.


 


9.09                        Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon thirty
(30) days’ notice to the Lenders and the Borrower; provided that any
such resignation by KeyBank National Association shall also constitute its
resignation as L/C Issuer and Swing Line Lender. If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor administrative agent for the Lenders which successor
administrative agent shall be consented to by the Borrower at all times other
than following the exercise of remedies by the Lenders during the existence of
an Event of Default (which consent of the Borrower shall not be unreasonably


 


90

















 


withheld
or delayed). If no successor administrative agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders, and with
the consent of the Borrower, a successor administrative agent from among the
Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent, L/C Issuer and Swing Line Lender and the respective terms “Administrative Agent,” “Swing Line
Lender” and “L/C Issuer” shall
mean such successor administrative agent, swing line lender or letter of credit
issuer and the retiring Administrative Agent’s appointment, powers and duties
as Administrative Agent shall be terminated and the retiring L/C Issuer’s and
Swing Line Lender’s rights, powers and duties as such shall be terminated,
without any other or further act or deed on the part of such retiring L/C
Issuer, Swing Line Lender or any other Lender, other than the obligation of the
successor L/C Issuer to issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession. After any
retiring Administrative Agent’s resignation hereunder as Administrative Agent,
the provisions of this Article IX
and Sections 10.04 and 10.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement. If no successor administrative agent has accepted
appointment as Administrative Agent by the date which is thirty (30) days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.


 


9.10                        Collateral
and Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion,


 


(a)                                 to release any
Lien on any property granted to or held by the Administrative Agent under any
Loan Document (i) upon termination of the Aggregate Commitments and
payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit, (ii) that
is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, (iii) consisting of an
instrument evidencing Indebtedness or other debt instrument, if the
indebtedness evidenced thereby has been paid in full, or (iv) subject to Section 10.01, if approved, authorized or ratified in
writing by the Required Lenders;


 


(b)                                 to subordinate
any Lien on any property granted to or held by the Administrative Agent under
any Loan Document to the holder of any Lien on such property that is permitted
by Section 7.01(i); and


 


(c)                                  to release any
Guarantor from its obligations under any Guaranty Agreement if such Person ceases
to be a Subsidiary as a result of a transaction permitted hereunder.


 


Upon
request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to
release any Guarantor from its obligations under any Guaranty Agreement
pursuant to this Section 9.10.


 


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X.


MISCELLANEOUS


 


10.01      Amendments,
Etc. No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Borrower or any other
Loan Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrower or the applicable Loan Party, as the case may
be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such
amendment, waiver or consent shall:


 


(a)              waive any condition
set forth in Sections 4.01(a) through (c) without the
written consent of each Lender;


 


(b)              extend or increase
the Commitment of any Lender (or reinstate any Commitment terminated pursuant
to Section 8.02) without the written consent of such Lender;


 


(c)               postpone any date
fixed by this Agreement or any other Loan Document for any payment or mandatory
prepayment of principal, interest, fees or other amounts due to the Lenders (or
any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;


 


(d)              reduce the principal
of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or
(subject to clause (iv) of the second proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document,
or change the manner of computation of any financial ratio (including any
change in any applicable defined term) used in determining the Applicable
Margin that would result in a reduction of any interest rate on any Loan or any
fee payable hereunder without the written consent of each Lender directly
affected thereby; provided, however, that only the consent
of the Required Lenders shall be necessary to amend the definition of “Default
Rate” or to waive any obligation of the Borrower to pay interest at the
Default Rate;


 


(e)               change Section 2.12
or Section 8.03 in a manner that would alter the pro rata sharing
of payments required thereby without the written consent of each Lender;


 


(f)               change any provision
of this Section 10.01 or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;


 


(g)               amend the definition
of “Alternative Currency” without the written consent of each Lender;


 


(h)              release any Guarantor
from any Guaranty Agreement without the written consent of each Lender; or


 


(i)               release or otherwise
subordinate all or substantially all of the Collateral without the written
consent of each Lender, except as otherwise may be provided in the


 


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Collateral
Document or except where the consent of the Required Lenders only is
specifically provided for;


 


and, provided further,
that (i) no amendment, waiver or consent shall, unless in writing and signed
by the L/C Issuer in addition to the Lenders required above, affect the rights
or duties of the L/C Issuer under this Agreement or any Letter of Credit
Application relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender and Administrative Agent in addition to the Lenders required above,
affect the rights or duties of the Swing Line Lender and Administrative Agent
under this Agreement or any other Loan Document; and (iii) the Agent/Arranger
Fee Letter may be amended, or rights or privileges thereunder waived, only in a
writing executed by the parties thereto. Notwithstanding anything to the
contrary herein, any Lender that has failed to fund any portion of any Credit
Extension required to be funded by it hereunder or that has a Voting Percentage
deemed to be zero shall not have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender.


 


10.02      Notices
and Other Communications; Facsimile Copies.


 


(a)              General. Unless otherwise
expressly provided herein, all notices and other communications provided
for hereunder shall be in writing (including by facsimile transmission) and
mailed, faxed or delivered, to the address, facsimile number or electronic mail
address specified for notices on Schedule 10.02; or, in the case of the
Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender, to
such other address as shall be designated by such party in a notice to the
other parties, and in the case of any other party, to such other address as
shall be designated by such party in a notice to the Borrower, the
Administrative Agent, the L/C Issuer and the Swing Line Lender. All such
notices and other communications shall be deemed to be given or made upon the
earlier to occur of (i) actual receipt by the intended recipient and (ii) (A) if
delivered by hand or by courier, when signed for by the intended recipient; (B) if
delivered by mail, four Business Days after deposit in the mails, postage
prepaid; (C) if delivered by facsimile, when sent and receipt has been
confirmed by telephone; and (D) if delivered by electronic mail when delivered;
provided, however, that notices and other communications to
the Administrative Agent, the L/C Issuer and the Swing Line Lender pursuant to Article II
shall not be effective until actually received by such Person. Any notice or
other communication permitted to be given, made or confirmed by telephone
hereunder shall be given, made or confirmed by means of a telephone call to the
intended recipient at the number specified on Schedule 10.02, it being
understood and agreed that a voicemail message shall in no event be effective
as a notice, communication or confirmation hereunder.


 


(b)              Effectiveness of
Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents
and signatures shall, subject to applicable Law, have the same force and effect
as manually-signed originals and shall be binding on all Loan Parties, the
Administrative Agent and the Lenders. The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.


 


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(c)               Limited Use of
Electronic Mail. Electronic mail and internet and intranet websites may
be used only to distribute routine communications, such as financial statements
and other information, and to distribute Loan Documents for execution by the
parties thereto, and may not be used for any other purpose.


 


(d)              Reliance by
Administrative Agent and Lenders. The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices and Swing Line Notices) purportedly given by
or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The Borrower
shall indemnify each Agent-Related Person and each Lender from all losses,
costs, expenses and liabilities resulting from the good faith reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other communications with the Administrative Agent
may be recorded by the Administrative Agent and each of the parties hereto
hereby consents to such recording.


 


10.03      No
Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in
exercising, 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 or therein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.


 


10.04      Attorney
Costs, Expenses and Taxes. Except as otherwise provided in Section 6.10,
the Borrower agrees (a) to pay or reimburse the Administrative Agent for all
reasonable and documented costs and expenses incurred in connection with the
development, preparation, negotiation and execution of this Agreement and the
other Loan Documents and any amendment, waiver, consent or other modification
of the provisions hereof and thereof (whether or not the transactions
contemplated hereby or thereby are consummated), and the consummation and
administration of the transactions contemplated hereby and thereby, including
all reasonable and documented Attorney Costs and (b) to pay or reimburse
the Administrative Agent or each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any “workout” or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all search, filing, recording, title
insurance and appraisal charges and fees and taxes related thereto, and other
reasonable and documented out-of-pocket expenses incurred by the Administrative
Agent and the reasonable and documented cost of independent public accountants
and other outside experts retained by the Administrative Agent or any Lender.
The agreements in this Section 10.04 shall survive the termination
of the Aggregate Commitments and repayment of all other Obligations.


 


10.05      Indemnification
by the Borrower. The Borrower shall indemnify and hold harmless the
Administrative Agent, L/C Issuer and each Lender and their respective
directors,


 


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officers,
employees, counsel, agents and attorneys-in-fact (collectively the
“Indemnitees”) from and against any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, judgments, suits, costs, expenses
and disbursements (including Attorney Costs limited to expenses of one lead
counsel firm and one local counsel firm) of any kind or nature whatsoever which
may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with (a) the
execution, delivery, enforcement, performance or administration of any Loan
Document or any other agreement, letter or instrument delivered in connection
with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (b) any Commitment, Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the L/C Issuer to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit), or (c) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower or any other Loan
Party, or any Environmental Liability related in any way to the Borrower or any
other Loan Party, or (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation, litigation
or proceeding) and regardless of whether any Indemnitee is a party thereto (all
the foregoing, collectively, the “Indemnified Liabilities”); provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such liabilities, obligations, losses, damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses or disbursements (including
Attorney Costs) resulted from the gross negligence or willful misconduct of
such Indemnitee. The agreements in this Section 10.05 shall survive
the resignation of the Administrative Agent, the replacement of any Lender, the
termination of the Commitments and the repayment, satisfaction or discharge of
all the other Obligations. All amounts due under this Section 10.05
shall be payable within ten Business Days after demand therefor.


 


10.06    Payments Set Aside. To the extent that any payment by
or on behalf of the Borrower is made to the Administrative Agent or any Lender,
or the Administrative Agent or any Lender exercises its right of set-off, and
such payment or the proceeds of such set-off or any part thereof (or the Dollar
Equivalent amount thereof) is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to
the extent of such recovery, the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such set-off had not occurred, and (b) each
Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or paid by the Administrative
Agent, plus interest thereon from the date of such demand to the date
such payment is made at a rate per annum equal to the Federal Funds Rate from
time to time in effect, in the applicable currency of such recovery or payment.


 


10.07    Successors
and Assigns; Lender Assignment.


 


(a)              The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except


 


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that the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) below and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Agreement.


 


(b)              Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment
and the Loans (including for purposes of this subsection (b),
Participations (as defined in subsection (d) below) in L/C Obligations and in Swing
Line Loans) at the time owing to it); provided
that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender’s Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender or
an Approved Fund with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder)
subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent shall not be less than $5,000,000 in the case of any assignment of a
Commitment unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed), (ii) each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned, and (iii) the parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) below, from and after the effective
date specified in each Assignment and Assumption, the Eligible Assignee
thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,  3.04, 3.05, and 10.05 with respect to facts and
circumstances occurring prior to the effective date of such assignment). Upon
request, the Borrower (at its expense) shall execute and deliver new or
replacement Notes to the assigning Lender and the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a Participation (as
defined in subsection (d) below) in such rights and obligations
in accordance with subsection (d) below. The assignee shall, on or prior
to the date on which the assignment is made, deliver to the Borrower and to the
Administrative Agent the appropriate IRS form as prescribed by Section 3.01(e) of this Agreement. If an Assignment of
all or a portion of a Lender’s rights and obligations under this Agreement
would result (under the terms of Section 3.01)
in any payment by the Borrower of additional sums, notwithstanding Section 3.01 or any other provision set forth in this Agreement, the Borrower
shall not be obligated to pay such additional sums.


 


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(c)               The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall
maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive absent manifest error, and the Borrower, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.


 


(d)              Any Lender may at any
time, without the consent of, or notice to, the Borrower or the Administrative
Agent, sell participations to any Person (other than a natural person or the
Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans
(including such Lender’s participations in L/C Obligations and/or Swing Line
Loans) owing to it) (a “Participation”); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement, and (iv) the Participant shall have no rights against the
Borrower or any of its Subsidiaries or the Administrative Agent, and the
Borrower and the Administrative Agent need give notices to and deal only with
such Lender and shall have no obligation to any Participant. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification that would (i) postpone
any date upon which any payment of money is scheduled to be paid to such
Participant, (ii) reduce the principal, interest, fees or other amounts
payable to such Participant, (iii) release any Guarantor from any Guaranty
Agreement, or (iv) release all or substantially all of the Collateral.
Subject to subsection (e) below, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04
and 3.05 to the same extent as if it were a Lender (Provided it
complies in fact with all the obligations of, and requirements imposed on,
Lenders thereunder to the same extent as were it a Lender) and had acquired its
interest by assignment pursuant to subsection (b) above. To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 10.09
as though it were a Lender, provided such Participant agrees to be
subject to Section 2.13 as though it were a Lender.


 


(e)               Notwithstanding any
other provision set forth in this Agreement, a Participant shall not be
entitled to receive any greater payment under the Agreement than the applicable
Lender would have been entitled to receive with respect to the Participation
sold to such Participant.


 


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(f)               Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Notes, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations, to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.


 


(g)               If the consent of the Borrower to an assignment or to
an Eligible Assignee is required hereunder (including a consent to an
assignment which does not meet the minimum assignment threshold specified in clause (i) of the proviso to the first sentence of Section 10.07(b)), the Borrower shall be deemed to have
given its consent five (5) Business Days after the date notice thereof has
been delivered by the assigning Lender (through the Administrative Agent)
unless such consent is expressly refused by the Borrower prior to such fifth
Business Day.


 


(h)              As used
herein, the following terms have the following meanings:


 


“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) that is a financial institution approved by (i) the
Administrative Agent, in the case of any assignment of a Committed Loan (ii) L/C
Issuer, (iii) the Swing Line Lender and (iv) unless (A) such
Person is taking delivery of an assignment in connection with physical
settlement of a credit derivative transaction or (B) an Event of Default
has occurred and is continuing, the Borrower (each such approval referred to in
clauses (i) through (iv) not to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee”
shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.


 


“Fund”
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.


 


“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.


 


(i)                Notwithstanding anything to the contrary contained
herein, if at any time KeyBank National Association assigns all of its
Commitment and Loans pursuant to subsection
(b) above, KeyBank National
Association may, upon thirty (30) days’ notice to the Borrower and the Lenders,
resign as L/C Issuer and/or (ii) upon five (5) Business Days’ notice
to the Borrower terminate the Swing Line. In the event of any such resignation
as L/C Issuer or the termination of the Swing Line, the Borrower shall be
entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line
Lender hereunder; provided, however, that no failure by
the Borrower to appoint any such successor shall affect the resignation of
KeyBank National Association as L/C Issuer or the termination of the Swing Line
as the case may be. KeyBank National Association shall retain all the rights
and obligations of the L/C Issuer hereunder with respect to all Letters of
Credit outstanding as of the effective date of its resignation as L/C Issuer


 


98

















 


and
all L/C Obligations with respect thereto (including the right to require the
Lenders to make Base Rate Committed Loans or fund participations in
Unreimbursed Amounts pursuant to Section 2.04(c)). If KeyBank
terminates the Swing Line, it shall retain all the rights of the Swing Line
Lender provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such termination, including
the right to require the Lenders to make Base Rate Committed Loans
or fund participations in outstanding Swing Line Loans pursuant to Section 2.05(c).


 


10.08      Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential); (b) to the extent requested by any
regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other
party to this Agreement; (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section 10.08,
to (i) any Eligible Assignee of or Participant in, or any prospective
Eligible Assignee of or Participant in, any of its rights or obligations under
this Agreement or (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty’s or prospective
counterparty’s professional advisor) to any credit derivative transaction
relating to obligations of the Borrower; (g) with the consent of
the Borrower; (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section 10.08
or (ii) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower; or (i) to the
National Association of Insurance Commissioners or any other similar
organization or any nationally recognized rating agency that requires access to
information about a Lender’s or its Affiliates’ investment portfolio in
connection with ratings issued with respect to such Lender or its Affiliates.
In addition, the Administrative Agent and the Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments, and the Credit Extensions. For the purposes of this Section 10.08,
“Information” means all information received from the Borrower relating
to the Borrower or its business, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by the Borrower.


 


10.09      Set-off.
In addition to any rights and remedies of the Lenders provided by law,
upon the occurrence and during the continuance of any Event of Default, each
Lender is authorized at any time and from time to time, without prior notice to
the Borrower or any other Loan Party, any such notice being waived by the
Borrower (on its own behalf and on behalf of each Loan Party) to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Loan Parties against any and all Obligations becoming
due and payable hereunder (whether at the stated maturity thereof, by
acceleration, or otherwise), now or hereafter existing,


 


99

















 


irrespective
of whether or not the Administrative Agent or such Lender shall have made
demand under this Agreement or any other Loan Document. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent, after any such
set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application


 


10.10      Interest
Rate Limitation. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents
shall not exceed the maximum rate of non-usurious interest permitted by
applicable Law (the “Maximum
Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent
or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted
by applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate,
and spread in equal or unequal parts the total amount of interest throughout
the contemplated term of the Obligations.


 


10.11      Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.


 


10.12      Integration.
This Agreement, together with the other Loan Documents, comprises the
complete, final and integrated agreement of the parties on the subject matter
hereof and thereof and supersedes all prior agreements, written or oral, on
such subject matter. This Agreement and the other Loan Documents may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties, and there are no unwritten oral agreements among the
parties. In the event of any conflict between the provisions of this Agreement
and those of any other Loan Document, the provisions of this Agreement shall
control; provided that the inclusion
of supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.


 


10.13      Survival
of Representations and Warranties. All representations and warranties
made hereunder and in any other Loan Document or other document delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery hereof and thereof. Such representations and
warranties have been or will be relied upon by the Administrative Agent and
each Lender, regardless of any investigation made by the Administrative Agent
or any Lender or on their behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default or Event of
Default at the time of any Credit Extension, and shall continue in full force
and effect as long as any Loan or any other Obligation shall remain unpaid or
unsatisfied or any Letter of Credit shall remain outstanding.


 


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10.14      Severability.
Any provision of
this Agreement and the other Loan Documents to which the Borrower is a party
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating
the remaining provisions thereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.


 


10.15      USA
Patriot Act Notice. Administrative
Agent and each Lender hereby notifies Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrower and other information that will allow Administrative Agent
and each Lender to identify Borrower in accordance with the Patriot Act.


 


10.16      No
Foreign Control. ADMINISTRATIVE
AGENT, L/C ISSUER AND LENDERS EXPRESSLY ACKNOWLEDGE AND AGREE THAT
ADMINISTRATIVE AGENT, LENDERS AND L/C ISSUER SHALL HAVE NO RIGHTS UNDER THIS
AGREEMENT OR ANY LOAN DOCUMENT THAT WOULD, ALONE OR IN CONJUNCTION WITH OTHER
SUCH RIGHTS, CONSTITUTE “OWNERSHIP” OR “CONTROL” OF BORROWER BY A PERSON THAT
IS NOT “A CITIZEN OF THE UNITED STATES” WITHIN THE MEANING OF THE U.S.
TRANSPORTATION CODE, AS AMENDED FROM TIME TO TIME, AS RECODIFIED AT 49 U.S.C. §
40101 ET SEQ., PROVIDED THAT THE FOREGOING SHALL NOT
LIMIT THE RIGHTS OF ADMINISTRATIVE AGENT, L/C ISSUER AND LENDERS TO THE FULL
RIGHTS AND REMEDIES OF LENDERS AND SECURED PARTIES UNDER APPLICABLE LAW.


 


If any provision
of this Agreement or any Loan Document shall cause any of this Agreement or any
of the Loan Documents, to be classified as “control” of Borrower by a Person
that is not a citizen of the United States within the meaning of the U.S.
Transportation Code, as amended from time to time, recodified at 49 U.S.C. §
40101, et seq., such provision, right or remedy shall be
suspended and not enforced to the extent, but only to the extent, and only so
long as, required to avoid such classification. In the event a written
modification to this Agreement or any Loan Document is required to avoid
“ownership” or “control” of Borrower by a Person that is not such a citizen of
the United States, by the U.S. Department of Transportation, the parties hereto
shall in good faith seek to mutually agree upon such written amendment hereto
or thereto, at Borrower’s expense.


 


10.17      Governing Law.


 


(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


 


(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF OREGON SITTING IN PORTLAND, MULTNOMAH COUNTY, OREGON OR OF THE UNITED
STATES FOR THE DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE


 


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BORROWER, THE
ADMINISTRATIVE AGENT, THE L/C ISSUER AND EACH LENDER CONSENTS, FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
THE BORROWER, THE ADMINISTRATIVE AGENT, THE L/C ISSUER AND EACH LENDER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING
OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE
AGENT, THE L/C ISSUER AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED
BY THE LAW OF SUCH STATE.


 


10.18      Waiver
of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.


 


10.19      Forced
Place Insurance.


 


WARNING


 


Unless Borrower provides
Administrative Agent with evidence of insurance coverage as required by this
Agreement, Administrative Agent may purchase insurance at Borrower’s expense to
protect Lenders’ interest. This insurance may, but need not, also protect
Borrower’s interest. If the collateral becomes damaged, the coverage
Administrative Agent purchases may not pay any claim Borrower makes or any claim
made against Borrower. Borrower may later cancel this coverage by providing
evidence that Borrower has obtained property coverage elsewhere.


 


Borrower is responsible
for the cost of any insurance purchased by Administrative Agent pursuant to
this Section 10.19. The cost of this insurance may be added to
the Committed Loan balance. If the cost is added to Borrower’s Committed Loan
balance, the interest rate on the Loan will apply to this added amount. The
effective date of coverage may be the date Borrower’s prior coverage lapsed or
the date Borrower failed to provide proof of coverage.


 


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The
coverage Administrative Agent purchases may be considerably more expensive than
insurance Borrower can obtain on its own and may not satisfy any need for
property damage coverage or any mandatory liability insurance requirements
imposed by applicable law.


 


10.20      Time
of the Essence. Time is of the essence of the Loan Documents.


 


10.21      Judgment
Currency. If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due hereunder or any other Loan Document in
one currency into another currency, the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of the Borrower
in respect of any such sum due from it to the Administrative Agent or the
Lenders hereunder or under the other Loan Documents shall, notwithstanding any
judgment in a currency (the “Judgment Currency”) other
than that in which such sum is denominated in accordance with the applicable
provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the
Business Day following receipt by the Administrative Agent of any sum adjudged
to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency. If the amount of the Agreement Currency so purchased is
less than the sum originally due to the Administrative Agent from the Borrower
in the Agreement Currency, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent and
each Lender to whom such obligation was owing against such loss. If the amount
of the Agreement Currency so purchased is greater than the sum originally due
to the Administrative Agent or such Lender in such currency, the Administrative
Agent or such Lender, as appropriate, agrees to return the amount of any excess
paid to it to the Borrower (or to any other Person who may be entitled thereto
under applicable law).


 


[Signature page follows]


 


103

















 


IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by the respective, duly authorized signatories as
of the date first above written.


 


	
  BORROWER:

  	
  ERICKSON AIR-CRANE INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ James Riley Loftin

  
	
   

  	
  Name:

  	
  James Riley Loftin

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
  Erickson Air-Crane
  Incorporated

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  ADMINISTRATIVE AGENT:

  	
  KEYBANK NATIONAL ASSOCIATION, as

  
	
   

  	
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Ronald Middleton

  
	
   

  	
  Name:

  	
  Ronald Middleton

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  LENDER:

  	
  KEYBANK NATIONAL ASSOCIATION, as

  
	
   

  	
  a Lender, Swing Line Lender and L/C Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Ronald Middleton

  
	
   

  	
  Name:

  	
  Ronald Middleton

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  LENDER:

  	
  BANK OF THE WEST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Sean Edwards

  
	
   

  	
  Name:

  	
  Sean Edwards

  
	
   

  	
  Title:

  	
  Vice President

  



 


[Credit Agreement Signature Page]


 


104