Document:

EXHIBIT

4.1

 

	

   

  
	

   

  
	

  CREDIT

  AGREEMENT

  
	

   

  
	

   

  
	

  DATED AS OF

  SEPTEMBER 30, 2002

  
	

   

  
	

   

  
	

  AMONG

  
	

   

  
	

   

  
	

  AIRNET SYSTEMS,

  INC.,

  
	

   

  
	

   

  
	

  THE LENDERS

  
	

  FROM TIME TO

  TIME PARTY HERETO,

  
	

   

  
	

   

  
	

  AND

  
	

   

  
	

   

  
	

  THE HUNTINGTON

  NATIONAL BANK

  
	

  AS

  ADMINISTRATIVE AGENT

  
	

  AND LEAD ARRANGER

  
	

   

  

 

 

TABLE OF CONTENTS

 

	

  ARTICLE

  I.   DEFINITIONS

  
	

   

  
	

  ARTICLE

  II.   THE CREDITS

  
	

  SECTION 2.1

  	

  COMMITMENT

  
	

  SECTION 2.2

  	

  LOANS AND ADVANCES

  
	

  SECTION 2.3

  	

  REQUIRED PAYMENTS; TERMINATION

  
	

  SECTION 2.4

  	

  COMMITMENT FEE; FACILITY FEE; REDUCTIONS

  IN AGGREGATE COMMITMENT

  
	

  SECTION 2.5

  	

  MINIMUM AMOUNT OF EACH ADVANCE; EURODOLLAR

  ADVANCES

  
	

  SECTION 2.6

  	

  METHOD OF SELECTING TYPES AND INTEREST

  PERIODS FOR NEW ADVANCES

  
	

  SECTION 2.7

  	

  CONVERSION AND CONTINUATION OF OUTSTANDING

  ADVANCES

  
	

  SECTION 2.8

  	

  OPTIONAL PRINCIPAL PAYMENTS

  
	

  SECTION 2.9

  	

  SWINGLINE LOANS

  
	

  SECTION 2.10

  	

  CHANGES IN INTEREST RATE

  
	

  SECTION 2.11

  	

  RATES APPLICABLE AFTER DEFAULT

  
	

  SECTION 2.12

  	

  REPAYMENT OF LOANS; EVIDENCE OF DEBT

  
	

  SECTION 2.13

  	

  AMORTIZATION OF TERM LOANS

  
	

  SECTION 2.14

  	

  TELEPHONIC NOTICES

  
	

  SECTION 2.15

  	

  INTEREST PAYMENT DATES, INTEREST AND FEE

  BASIS

  
	

  SECTION 2.16

  	

  NOTIFICATION OF ADVANCES, INTEREST RATES,

  PREPAYMENTS AND COMMITTMENT

  
	

  SECTION 2.17

  	

  LENDING INSTALLATIONS

  
	

  SECTION 2.18

  	

  NON-RECEIPT OF FUNDS BY THE AGENT

  
	

  SECTION 2.19

  	

  FACILITY LCS

  
	

  SECTION 2.20

  	

  REPLACEMENT OF LENDER

  
	

   

  	

   

  
	

  ARTICLE III.   YIELD PROTECTION; TAXES

  
	

  SECTION 3.1

  	

  YIELD PROTECTION

  
	

  SECTION 3.2

  	

  CHANGES IN CAPITAL ADEQUACY REGULATIONS

  
	

  SECTION 3.3

  	

  AVAILABILITY OF TYPES OF ADVANCES

  
	

  SECTION 3.4

  	

  FUNDING INDEMNIFICATION

  
	

  SECTION 3.5

  	

  TAXES

  
	

  SECTION 3.6

  	

  LENDER STATEMENTS; SURVIVAL OF INDEMNITY

  
	

   

  	

   

  
	

  ARTICLE IV.   CONDITIONS PRECEDENT

  
	

  SECTION 4.1

  	

  INITIAL ADVANCE

  
	

  SECTION 4.2

  	

  EACH CREDIT EXTENSION

  
	

   

  	

   

  
	

  ARTICLE V.   REPRESENTATIONS AND

  WARRANTIES

  
	

  SECTION 5.1

  	

  EXISTENCE AND STANDING

  
	

  SECTION 5.2

  	

  AUTHORIZATION AND VALIDITY

  
	

  SECTION 5.3

  	

  NO CONFLICT, GOVERNMENT CONSENT

  

 

 

	

  SECTION 5.4

  	

  FINANCIAL STATEMENTS

  
	

  SECTION 5.5

  	

  MATERIAL ADVERSE CHANGE

  
	

  SECTION 5.6

  	

  TAXES

  
	

  SECTION 5.7

  	

  LITIGATION AND CONTINGENT OBLIGATIONS

  
	

  SECTION 5.8

  	

  SUBSIDIARIES

  
	

  SECTION 5.9

  	

  ERISA

  
	

  SECTION 5.10

  	

  ACCURACY OF INFORMATION

  
	

  SECTION 5.11

  	

  FEDERAL RESERVE REGULATIONS

  
	

  SECTION 5.12

  	

  MATERIAL AGREEMENTS

  
	

  SECTION 5.13

  	

  COMPLIANCE WITH LAWS

  
	

  SECTION 5.14

  	

  PROPERTIES

  
	

  SECTION 5.15

  	

  PLAN ASSETS, PROHIBITED TRANSACTIONS

  
	

  SECTION 5.16

  	

  ENVIRONMENTAL MATTERS

  
	

  SECTION 5.17

  	

  INVESTMENT COMPANY ACT

  
	

  SECTION 5.18

  	

  PUBLIC UTILITY HOLDING COMPANY

  
	

  SECTION 5.19

  	

  INSURANCE

  
	

  SECTION 5.20

  	

  SOLVENCY

  
	

  SECTION 5.21

  	

  LABOR MATTERS

  
	

   

  	

   

  
	

  ARTICLE VI.   COVENANTS

  
	

  SECTION 6.1

  	

  FINANCIAL REPORTING

  
	

  SECTION 6.2

  	

  USE OF PROCEEDS

  
	

  SECTION 6.3

  	

  NOTICE OF DEFAULT

  
	

  SECTION 6.4

  	

  CONDUCT OF BUSINESS

  
	

  SECTION 6.5

  	

  TAXES

  
	

  SECTION 6.6

  	

  INSURANCE

  
	

  SECTION 6.7

  	

  COMPLIANCE WITH LAWS

  
	

  SECTION 6.8

  	

  MAINTENANCE OF PROPERTIES

  
	

  SECTION 6.9

  	

  BOOKS AND RECORDS; INSPECTION

  
	

  SECTION 6.10

  	

  INTENTIONALLY OMITTED

  
	

  SECTION 6.11

  	

  INDEBTEDNESS

  
	

  SECTION 6.12

  	

  MERGER

  
	

  SECTION 6.13

  	

  SALE OF ASSETS

  
	

  SECTION 6.14

  	

  INVESTMENTS AND ACQUISITIONS

  
	

  SECTION 6.15

  	

  LIENS

  
	

  SECTION 6.16

  	

  CAPITAL EXPENDITURES

  
	

  SECTION 6.17

  	

  AFFILIATES

  
	

  SECTION 6.18

  	

  LETTERS OF CREDIT

  
	

  SECTION 6.19

  	

  SALE OF ACCOUNTS

  
	

  SECTION 6.20

  	

  SALE AND LEASEBACK TRANSACTIONS AND OTHER

  OFF-BALANCE SHEET LIABILITIES

  
	

  SECTION 6.21

  	

  CONTINGENT OBLIGATIONS

  
	

  SECTION 6.22

  	

  FINANCIAL CONTRACTS

  
	

  SECTION 6.23

  	

  NO AMENDMENTS TO CERTAIN DOCUMENTS AND

  AGREEMENTS

  
	

  SECTION 6.24

  	

  INTENTIONALLY OMITTED

  
	

  SECTION 6.25

  	

  FINANCIAL COVENANTS

  

 

ii

 

	

  ARTICLE

  VII.   DEFAULTS

  
	

   

  
	

  ARTICLE

  VIII.   ACCELERATION,

  WAIVERS, AMENDMENTS AND REMEDIES

  
	

  SECTION 8.1

  	

  ACCELERATION; FACILITY LC COLLATERAL

  
	

  SECTION 8.2

  	

  PRESERVATION OF RIGHTS

  
	

   

  	

   

  
	

  ARTICLE IX.   THE ADMINISTRATIVE AGENT

  
	

  SECTION 9.1

  	

  APPOINTMENT; NATURE OF RELATIONSHIP

  
	

  SECTION 9.2

  	

  POWERS

  
	

  SECTION 9.3

  	

  GENERAL IMMUNITY

  
	

  SECTION 9.4

  	

  NO RESPONSIBILITY FOR LOANS, RECITALS,

  ETC.

  
	

  SECTION 9.5

  	

  ACTION ON INSTRUCTIONS OF LENDERS

  
	

  SECTION 9.6

  	

  EMPLOYMENT OF AGENTS AND COUNSEL

  
	

  SECTION 9.7

  	

  RELIANCE ON DOCUMENTS; COUNSEL

  
	

  SECTION 9.8

  	

  AGENT’S REIMBURSEMENT AND INDEMNIFICATION

  
	

  SECTION 9.9

  	

  NOTICE OF DEFAULT

  
	

  SECTION 9.10

  	

  RIGHTS AS A LENDER

  
	

  SECTION 9.11

  	

  LENDER CREDIT DECISION

  
	

  SECTION 9.12

  	

  SUCCESSOR ADMINISTRATIVE AGENT

  
	

  SECTION 9.13

  	

  DELEGATION TO AFFILIATES

  
	

   

  	

   

  
	

  ARTICLE X.  SETOFF; RATABLE PAYMENTS

  
	

  SECTION 10.1

  	

  SETOFF

  
	

  SECTION 10.2

  	

  RATABLE PAYMENTS

  
	

   

  	

   

  
	

  ARTICLE XI.   BENEFIT

  OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

  
	

  SECTION 11.1

  	

  SUCCESSORS AND ASSIGNS

  
	

  SECTION 11.2

  	

  PARTICIPATIONS

  
	

  SECTION 11.3

  	

  ASSIGNMENTS

  
	

   

  	

   

  
	

  ARTICLE XII.  GENERAL PROVISIONS

  
	

  SECTION 12.1

  	

  SURVIVAL OF REPRESENTATIONS

  
	

  SECTION 12.2

  	

  GOVERNMENTAL REGULATION

  
	

  SECTION 12.3

  	

  HEADINGS

  
	

  SECTION 12.4

  	

  ENTIRE AGREEMENT

  
	

  SECTION 12.5

  	

  SEVERAL OBLIGATIONS; BENEFITS OF THIS

  AGREEMENT

  
	

  SECTION 12.6

  	

  EXPENSES; INDEMNIFICATION

  
	

  SECTION 12.7

  	

  NUMBERS OF DOCUMENTS

  
	

  SECTION 12.8

  	

  SEVERABILITY OF PROVISIONS

  
	

  SECTION 12.9

  	

  NONLIABILITY OF LENDERS

  
	

  SECTION 12.10

  	

  CONFIDENTIALITY

  
	

  SECTION 12.11

  	

  NONRELIANCE

  
	

  SECTION 12.12

  	

  DISCLOSURE

  
	

  SECTION 12.13

  	

  AMENDMENTS

  
	

  SECTION 12.14

  	

  NOTICES

  
	

  SECTION 12.15

  	

  CHANGE OF ADDRESS

  

 

iii

 

	

  SECTION 12.16

  	

  COUNTERPARTS

  
	

  SECTION 12.17

  	

  CHOICE OF LAW

  
	

  SECTION 12.18

  	

  CONSENT TO JURISDICTION

  
	

  SECTION 12.19

  	

  WAIVER OF JURY TRIAL

  
	

  SECTION 12.20

  	

  INTEREST RATE LIMITATION

  
	

  SECTION 12.21

  	

  WARRANT OF ATTORNEY

  
	

   

  
	

  ATTACHMENTS:

  
	

   

  
	

  PRICING

  SCHEDULE

  
	

   

  
	

  EXHIBIT A –

  	

  FORM OF OPINION

  
	

  EXHIBIT B 

  –

  	

  COMPLIANCE

  CERTIFICATE

  
	

  EXHIBIT C 

  –

  	

  ASSIGNMENT

  AGREEMENT

  
	

  EXHIBIT D

  	

  LOAN/CREDIT

  RELATED MONEY TRANSFER INSTRUCTION

  
	

  EXHIBIT E 

  –

  	

  NOTE

  
	

  SCHEDULE 1 

  –

  	

  SUBSIDIARIES AND

  OTHER INVESTMENTS

  
	

  SCHEDULE 2 

  –

  	

  INDEBTEDNESS

  AND LIENS

  
	

  SCHEDULE 5.14  –

  	

  ADDRESSES OF REAL PROPERTY OWNED/LEASED

  BY BORROWER

  
	

  SCHEDULE 5.16  –

  	

  ENVIRONMENTAL

  MATTERS

  
	

  SCHEDULE 5.19  –

  	

  INSURANCE

  SUMMARY AND CERTIFICATION

  
			

 

iv

 

 

CREDIT AGREEMENT

 

This Credit

Agreement, dated as of September 30, 2002, is among AirNet Systems, Inc., the

Lenders and The Huntington National Bank, as LC Issuer, as Swingline Lender and

as Administrative Agent.  The parties

hereto agree as follows:

 

ARTICLE I

 

Definitions

 

Section 1.1.            Definitions.  As used in this Agreement:

 

“Acquisition”

means any transaction, or any series of related transactions, consummated on or

after the date of this Agreement, by which the Borrower or any of its

Subsidiaries (i) acquires any going business or all or substantially all of the

assets of any firm, corporation or limited liability company, or division

thereof, whether through purchase of assets, merger or otherwise or (ii)

directly or indirectly acquires (in one transaction or as the most recent

transaction in a series of transactions) at least a majority (in number of

votes) of the securities of a corporation which have ordinary voting power for

the election of directors (other than securities having such power only by

reason of the happening of a contingency) or a majority (by percentage or

voting power) of the outstanding ownership interests of a partnership or

limited liability company.

 

“Adjusted

Indebtedness” means, as of any date of calculation, Consolidated

Funded Indebtedness plus an amount equal to three times the annual Consolidated

Rent Expense, for the most-recently ended four (4) fiscal quarters.

 

“Administrative

Agent” means HNB in its capacity as contractual representative

of the Lenders pursuant to Article IX, and not in its individual capacity as a

Lender or Swingline Lender, and any successor Administrative Agent appointed

pursuant to Article IX.

 

“Advance”

means a borrowing hereunder, (x) (i) made by the Lenders on the same Borrowing

Date, or (ii) converted or continued by the Lenders on the same date of

conversion or continuation, consisting, in either case, of the aggregate amount

of the several Loans of the same Class and Type and, in the case of Eurodollar

Loans, for the same Interest Period, and/or (y) made by the Swingline Lender.

 

“Affiliate”

of any Person means any other Person directly or indirectly controlling,

controlled by or under common control with such Person.  A Person shall be deemed to control another

Person if the controlling Person owns 20% or more of any class of voting

securities (or other ownership interests) of the controlled Person or

possesses, directly or indirectly, the power to direct or cause the direction

of the management or policies of the controlled Person, whether through

ownership of stock or other ownership interests, by contract or otherwise.

 

 

“Aggregate

Outstanding Revolving Credit Exposure” means, at any time, the

aggregate of the Outstanding Revolving Credit Exposure of all the Lenders.

 

“Aggregate

Revolving Commitment” means the aggregate of the Revolving Commitments

of all the Revolving Lenders, as increased or reduced from time to time

pursuant to the terms hereof.

 

“Agreement”

means this Credit Agreement, as it may be amended, modified, supplemented,

extended, restated or replaced from time to time.

 

“Agreement

Accounting Principles” means generally accepted accounting

principles as in effect from time to time, applied in a manner consistent with

that used in preparing the financial statements referred to in Section 5.4.

 

“Alternative

Base Rate” means the rate of interest equal to the higher of (i)

the Prime Rate, or (ii) the sum of (y) the Federal Funds Effective Rate, and

(z) one half of one percent (.5%).

 

“AMI”

means AirNet Management, Inc., an Ohio corporation.

 

“Applicable

Fee Rate” means, at any time, the percentage rate per annum at

which commitment fees and LC Fees are accruing on the unused portion of the

Aggregate Revolving Commitment or undrawn stated amount under the relevant

Facility LC, as applicable, at such time as set forth in the Pricing Schedule.

 

“Applicable

Margin” means, with respect to Advances of any Class and Type

(other than Swingline Loans) at any time, the percentage rate per annum which

is applicable at such time with respect to Advances of such Class and Type as

set forth in the Pricing Schedule.

 

“Applicable

Percentage” means, with respect to any Revolving Lender, the

percentage of the Aggregate Revolving Commitment represented by such Lender’s

Revolving Commitment. If the Revolving Commitments have terminated or expired,

the Applicable Percentage shall be determined based upon the Aggregate

Revolving Commitment most recently in effect, giving effect to any assignments.

 

“Arranger”

means HNB, and its successors.

 

“Article”

means an article of this Agreement unless another document is specifically

referenced.

 

“Authorized

Officer” means any of the Chief Executive Officer, Chief

Financial Officer or Controller of the Borrower, acting singly.

 

“Available

Aggregate Revolving Commitment” means, at any time, the

Aggregate Revolving Commitment then in effect minus the Aggregate Outstanding

Revolving Credit Exposure at such time.

 

2

 

“Board”

means the Board of Governors of the Federal Reserve System of the United States

of America.

 

“Borrower”

means AirNet Systems, Inc., an Ohio corporation, and its successors and

assigns.

 

“Borrowing

Date” means a date on which an Advance is made hereunder as

determined pursuant to Section 2.6.

 

“Borrowing

Notice” shall have the meaning set forth in Section 2.6.

 

“Business

Day” means (i) with respect to any borrowing, payment or rate

selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on

which banks generally are open in Columbus, Ohio and New York, New York for the

conduct of substantially all of their commercial lending activities, interbank

wire transfers can be made on the Fedwire system, and dealings in United States

dollars are carried on in the London interbank market, and (ii) for all other

purposes, a day (other than a Saturday or Sunday) on which banks generally are

open in Columbus, Ohio for the conduct of substantially all of their commercial

lending activities and interbank wire transfers can be made on the Fedwire

system.

 

“Capital

Expenditures” means, without duplication, any expenditures for

any purchase or other acquisition of any asset which would be classified as a

fixed or capital asset on a consolidated balance sheet of the Borrower and its

Subsidiaries prepared in accordance with Agreement Accounting Principles.

 

“Capitalized

Lease” of a Person means any lease of Property by such Person as

lessee which would be capitalized on a balance sheet of such Person prepared in

accordance with Agreement Accounting Principles.

 

“Capitalized

Lease Obligations” of a Person means the amount of the

obligations of such Person under Capitalized Leases which would be shown as a

liability on a balance sheet of such Person prepared in accordance with

Agreement Accounting Principles.

 

“Charges”

shall have the meaning set forth in Section 12.20.

 

“Cash

Equivalent Investments” means (i) short-term obligations of, or

fully guaranteed by, the United States of America, (ii) commercial paper rated

A-1 or better by S&P or P-1 or better by Moody’s, (iii) demand deposit

accounts maintained in the ordinary course of business, (iv) certificates of

deposit issued by and time deposits with any commercial banks (whether domestic

or foreign) having capital and surplus in excess of $100,000,000, and (v) money

market accounts; provided in each case that the same provides for payment of

both principal and interest (and not principal alone or interest alone) and is

not subject to any contingency regarding the payment of principal or interest.

 

3

 

“Change in

Control” means, with respect

to Borrower, an event or series of events by which:

 

(i)            any “person” or “group” (within the

meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934) has

become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the

Exchange Act, except that a Person shall be deemed to have “beneficial

ownership” of all securities that any such Person has the right to acquire,

whether such right is exercisable immediately or only after the passage of

time), by way of merger, consolidation or otherwise, of 30% or more of the

equity interests of Borrower on a fully-diluted basis after giving effect to

the conversion and exercise of all outstanding equity equivalents (whether such

equity equivalents are then currently convertible or exercisable); or

 

(ii)           during any period of 12 consecutive

months, a majority of the members of the board of directors or other equivalent

governing body of Borrower cease to be composed of individuals (A) who were

members of that board or equivalent governing body on the first day of such

period, (B) whose election or nomination to that board or equivalent governing

body was approved by individuals referred to in clause (ii)(A) above

constituting at the time of such election or nomination at least a majority of

that board or equivalent governing body or (C) whose election or nomination to

that board or other governing body was approved by individuals referred to in

clauses (ii)(A) and (B) above constituting at the time of such election or nomination

at least a majority of that board or equivalent governing body; provided that

the Required Lenders determine that, for purposes of this Agreement, any such

event or series of events described in this subpart (ii) shall constitute a

Change in Control.

 

“Class”,

when used in reference to any Loan or Advance, refers to whether such Loan, or

the Loans comprising such Advance, are Revolving Loans, Term Loans or Swingline

Loans and, when used in reference to any Commitment, refers to whether such

Commitment is a Revolving Commitment or Term Commitment.

 

“Closing

Agenda” means the Closing Agenda prepared by the Administrative

Agent’s counsel setting forth the required closing documentation and other

items pursuant to Section 4.1, as the same may be amended or modified from time

to time.

 

“Closing

Date” means the date on which this Agreement is fully executed.

 

“Code”

means the Internal Revenue Code of 1986, as amended, reformed or otherwise

modified from time to time.

 

“Commitment”

means a Revolving Commitment or Term Commitment, or any combination thereof (as

the context requires).

 

“Consolidated

Capital Expenditures” means, with reference to any period, the

Capital Expenditures of the Borrower and its Subsidiaries calculated on a

consolidated basis for such period.

 

4

 

“Consolidated

Dividends” means, with reference to any period, any dividends or

distributions on the membership interests, capital stock or other equity

interests of Borrower or any of its Subsidiaries (other than dividends payable

in its own membership interests, capital stock or other equity interests) or

the redemption, repurchase or other acquisition or retirement of any of the

membership interests, capital stock or other equity interests of Borrower or

any of its Subsidiaries at any time outstanding, all calculated on a

consolidated basis for such period.

 

“Consolidated

EBIT” means, with respect to any period, Consolidated Net Income

plus,

to the extent deducted from revenues in determining Consolidated Net Income,

(i) Consolidated Interest Expense, (ii) taxes paid or accrued, calculated for

the Borrower and its Subsidiaries on a consolidated basis, and (iii)

extraordinary losses (determined in accordance with Agreement Accounting

Principles) incurred other than in the ordinary course of business, calculated

for the Borrower and its Subsidiaries on a consolidated basis, minus,

to the extent included in Consolidated Net Income, extraordinary gains

(determined in accordance with Agreement Accounting Principles) realized other

than in the ordinary course of business, calculated for the Borrower and its

Subsidiaries on a consolidated basis.

 

“Consolidated

EBITDAR” means, with respect to any period, Consolidated Net

Income plus,

to the extent deducted from revenues in determining Consolidated Net Income,

(i) Consolidated Interest Expense, (ii) taxes paid or accrued, calculated for

the Borrower and its Subsidiaries on a consolidated basis, (iii) depreciation,

calculated for the Borrower and its Subsidiaries on a consolidated basis, (iv)

amortization, calculated for the Borrower and its Subsidiaries on a

consolidated basis; (v) Consolidated Rent Expense, and (vi) extraordinary

losses (determined in accordance with Agreement Accounting Principles) incurred

other than in the ordinary course of business, calculated for the Borrower and

its Subsidiaries on a consolidated basis, minus, to the extent included in

Consolidated Net Income, extraordinary gains (determined in accordance with

Agreement Accounting Principles) realized other than in the ordinary course of

business, calculated for the Borrower and its Subsidiaries on a consolidated

basis.

 

“Consolidated

Funded Indebtedness” means at any time (a) the aggregate dollar

amount of Indebtedness of the Borrower and its Subsidiaries which has actually

been funded and is outstanding, whether or not such amount is due or payable,

at such time, and (b) all reimbursement obligations under outstanding Letters

of Credit which (i) may be presented, or (ii) have been presented and have not

yet been paid; all calculated for the Borrower and its Subsidiaries on a

consolidated basis as of such time.

 

“Consolidated

Indebtedness” means at any time the Indebtedness of the Borrower

and its Subsidiaries calculated on a consolidated basis as of such time.

 

“Consolidated

Interest Expense” means, with reference to any period, the

interest expense of the Borrower and its Subsidiaries calculated on a

consolidated basis for such period.

 

“Consolidated

Net Income” means, with reference to any period, the net income

(or loss) of the Borrower and its Subsidiaries calculated on a consolidated

basis for such period.

 

5

 

“Consolidated

Net Worth” means at any time the consolidated shareholders’ equity

of the Borrower and its Subsidiaries calculated on a consolidated basis as of

such time.

 

“Consolidated

Rent Expense” means, for any period, the aggregate total amount

of rent and lease expense under Operating Leases for aircraft paid by the

Borrower and its Subsidiaries during such period which would be reported in

accordance with GAAP and which was deducted in arriving at Consolidated EBIT

for such period.

 

“Consolidated Tangible Net Worth” of Borrower means, at

any date, Consolidated Net Worth, less all related Intangible Assets,

determined at such date.  For purposes

of this definition, “Intangible Assets” means the amount (to the extent

reflected in determining such shareholders’ equity) of (i) all write-ups in the

book value of any asset owned by the Borrower and its Subsidiaries, (ii) all

Equity Investments of Borrower in its Subsidiaries and/or Affiliates, and (iii)

all unamortized debt discount and expense, unamortized deferred charges,

goodwill, patents, trademarks, service marks, trade names, anticipated future

benefit of tax loss carry-forwards, copyrights, organization or developmental

expenses and other intangible assets of Borrower and its Subsidiaries,

calculated on a consolidated basis.

 

“Contingent

Obligation” of a Person means any agreement, undertaking or

arrangement by which such Person assumes, guarantees, endorses, contingently

agrees to purchase or provide funds for the payment of, or otherwise becomes or

is contingently liable upon, the obligation or liability of any other Person, or

agrees to maintain the net worth or working capital or other financial

condition of any other Person, or otherwise assures any creditor of such other

Person against loss, including any comfort letter, operating agreement,

take-or-pay contract or the obligations of any such Person as general partner

of a partnership with respect to the liabilities of the partnership.

 

“Conversion/Continuation

Notice” is defined in Section 2.7.

 

“Controlled

Group” means all members of a controlled group of corporations

or other business entities and all trades or businesses (whether or not

incorporated) under common control which, together with the Borrower or any of

its Subsidiaries, are treated as a single employer under Section 414 of the

Code.

 

“Credit

Extension” means the making of an Advance or the issuance of a

Facility LC hereunder.

 

“Credit

Extension Date” means the Borrowing Date for an Advance or the

issuance date for a Facility LC.

 

“Debt

Service Coverage Ratio” means, as of any date of calculation,

the ratio of (i) the difference between (1) Consolidated EBITDAR, and (2) taxes

actually paid, calculated for the Borrower and its Subsidiaries on a

consolidated basis, to (ii) the sum of (1) principal and interest payments

scheduled or actually made with respect to Consolidated Indebtedness, (2)

Consolidated Rent Expense, and (3) Consolidated Dividends; provided, however,

that any payment or distribution made in satisfaction of Permitted Indebtedness

owing among Borrower,

 

6

 

its Subsidiaries and/or Affiliates shall be excluded from calculation

of the Debt Service Coverage Ratio, notwithstanding that any such payment or

distribution might otherwise be included in the terms referenced in (ii)(1) and

(3) of the above equation.

 

“Default”

is defined in Article VII.

 

“Effective

Date” means the date on which the conditions specified in

Section 4.1 are satisfied.

 

“Environmental

Laws” means any and all federal, state, local and foreign

statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,

orders, decrees, plans, injunctions, permits, concessions, grants, franchises,

licenses, agreements and other governmental restrictions relating to (i) the

protection of the environment, (ii) the effect of the environment on human

health, (iii) emissions, discharges or releases of pollutants, contaminants,

hazardous substances or wastes into surface water, ground water or land, or

(iv) the manufacture, processing, distribution, use, treatment, storage,

disposal, transport or handling of pollutants, contaminants, hazardous

substances or wastes or the clean-up or other remediation thereof.

 

“Equity

Investment”

of a Person means any loan, advance (other than commission, travel and similar

advances to officers and employees made in the ordinary course of business),

extension of credit (other than accounts receivable arising in the ordinary

course of business on terms customary in the trade) or contribution of capital

by such Person, except to the extent any of the foregoing constitutes, as to

the Person receiving such Equity Investment, Permitted Indebtedness.

 

“ERISA”

means the Employee Retirement Income Security Act of 1974, as amended from time

to time, and any rule or regulation issued thereunder.

 

“Eurodollar

Advance” means an Advance which, except as otherwise provided in

Section 2.11, bears interest at the applicable Eurodollar Rate.

 

“Eurodollar

Base Rate” means, with respect to a Eurodollar Advance for the

relevant Interest Period, an

interest rate per annum (based on a 360-day year) obtained by dividing (i) the

actual or estimated arithmetic mean of the per annum rates of interest at which

deposits in U.S. dollars, for a period of time equal to the Interest Period in

effect with respect to the relevant Loan, and in an aggregate amount comparable

to the amount of the principal balance of the Loan, are being offered to U.S.

banks by one or more prime banks in the London interbank market on the second

Business Day prior to the first day of each Interest Period, as offered and determined

by Lender in accordance with its standard practices and procedures based upon

reference to information which appears on page LIBOR01 captioned “British

Bankers Assoc. Interest Settlement Rates” of the Reuters America Network, a

service of Reuters America, Inc. (or such other page that may replace that page

on that service for the purpose of displaying London interbank offered rates),

or, if such service ceases to be available or ceases to be used by Lender, such

other reasonably comparable money rate service selected by Lender, for

obtaining rate quotations, or any other reasonable procedure, all as determined

by Lender; by (ii) a percentage equal to 100% minus the Reserve Requirement.

 

7

 

“Eurodollar

Loan” means a Loan which, except as otherwise provided in

Section 2.11, bears interest at the applicable Eurodollar Rate.

 

“Eurodollar

Rate” means, with respect to a Eurodollar Advance for the

relevant Interest Period, the sum of (i) the Eurodollar Base Rate applicable to

such Interest Period, plus (ii) the Applicable Margin.

 

“Excluded

Taxes” means, in the case of each Lender or applicable Lending

Installation, the Swingline Lender, the LC Issuer and the Administrative Agent,

taxes imposed on its overall net income or net worth, and franchise taxes

imposed on it, by (i) the jurisdiction under the laws of which such Lender, the

Swingline Lender, the LC Issuer or the Administrative Agent, as applicable, is

incorporated or organized, or (ii) the jurisdiction in which the Administrative

Agent’s or such Lender’s or LC Issuer’s or Swingline Lender’s principal

executive office or applicable Lending Installation is located.

 

“Exhibit”

refers to an exhibit to this Agreement, unless another document is specifically

referenced.

 

“Facility

LC” is defined in Section 2.19.1.

 

“Facility

LC Application” is defined in Section 2.19.3.

 

“Facility

Termination Date” means September 30, 2005 or any earlier date

on which the Aggregate Commitment is reduced to zero or otherwise terminated

pursuant to the terms hereof.

 

“Federal Funds Effective Rate”

means, for any day, an interest rate per annum equal to the weighted average of

the rates on overnight Federal funds transactions with members of the Federal

Reserve System arranged by Federal funds brokers on such day, as published for

such day (or, if such day is not a Business Day, for the immediately preceding

Business Day) by the Federal Reserve Bank of New York, or, if such rate is not

so published for any day which is a Business Day, the average of the quotations

at approximately 10:00 a.m. (Columbus, Ohio time) on such day on such

transactions received by the Administrative Agent from three Federal funds

brokers of recognized standing selected by the Administrative Agent in its sole

discretion.

 

“Final

Judgment” is defined in Section 12.6(ii).

 

“Financial

Contract” of a Person means any exchange-traded or

over-the-counter futures, forward, swap or option contract or other financial

instrument with similar characteristics, to the extent any of the same are

entered into for speculative (rather than risk management) purposes.

 

“Float”

means Float Control, Inc., a Michigan corporation.

 

“Floating

Rate” means, for any day, a rate per annum equal to (i) the

Alternative Base Rate for such day plus (ii) the Applicable Margin, in

each case changing when and as the Prime Rate or the Federal Funds Effective

Rate, as applicable, changes.

 

8

 

“Floating

Rate Advance” means an Advance which, except as otherwise

provided in Section 2.11, bears interest at the Floating Rate.

 

“Floating

Rate Loan” means a Loan which, except as otherwise provided in

Section 2.11, bears interest at the Floating Rate.

 

“Guarantor”

means, collectively, AMI, Float, and Jetride, each of which is a Wholly-Owned

Subsidiary of Borrower.

 

“HNB”

means The Huntington National Bank, a national banking association, in its

individual capacity, and its successors.

 

“Indebtedness”

of a Person means such Person’s (i) obligations for borrowed money, (ii)

obligations representing the deferred purchase price of Property or services

(other than accounts payable and accrued expenses arising in the ordinary

course of such Person’s business payable on terms customary in the trade),

(iii) obligations, whether or not assumed, secured by Liens against, or payable

out of the proceeds or production from, Property now or hereafter owned or

acquired by such Person, (iv) obligations which are evidenced by notes,

acceptances, or other instruments, (v) obligations of such Person to purchase

securities or other Property arising out of or in connection with the sale of

the same or substantially similar securities or Property, (vi) Capitalized

Lease Obligations, (vii) Contingent Obligations, and (viii) any other

obligation for borrowed money which in accordance with Agreement Accounting

Principles would be shown as a liability on the consolidated balance sheet of

such Person.

 

“Interest

Period” means, with respect to a Eurodollar Advance, a period of

one, two, three or six months commencing on a Business Day selected by the

Borrower pursuant to this Agreement. 

Such Interest Period shall end on the day which corresponds numerically

to such date one, two, three or six months thereafter, provided, however, that if there

is no such numerically corresponding day in such next, second, third or sixth

succeeding month, such Interest Period shall end on the last Business Day of

such next, second, third or sixth succeeding month.  If an Interest Period would otherwise end on a day which is not a

Business Day, such Interest Period shall end on the next succeeding Business

Day, provided,

however, that if said next succeeding Business Day falls in a new

calendar month, such Interest Period shall end on the immediately preceding

Business Day.

 

“Investment”

of a Person means any loan, advance (other than commission, travel and similar

advances to officers and employees made in the ordinary course of business),

extension of credit (other than accounts receivable arising in the ordinary

course of business on terms customary in the trade) or contribution of capital

by such Person; stocks, bonds, mutual funds, partnership interests, notes,

debentures or other securities owned by such Person; any deposit accounts and

certificates of deposit owned by such Person which do not constitute Cash

Equivalents; and derivative financial instruments and other similar instruments

or contracts owned by such Person.

 

“Jetride”

means Jetride, Inc., an Ohio corporation.

 

9

 

“LC

Disbursement” means a payment made by the LC Issuer pursuant to

a Facility LC.

 

“LC Fee”

is defined in Section 2.19.4.

 

“LC Issuer”

means HNB (or any subsidiaries or affiliate of HNB designated by HNB) in its

capacity as Issuer of Facility LCs hereunder.

 

“LC

Obligations” means, at any time, the sum, without duplication,

of (i) the aggregate undrawn stated amount under all Facility LCs outstanding

at such time plus (ii) the aggregate unpaid amount at such time of all

Reimbursement Obligations.

 

“LC

Payment Date” is defined in Section 2.19.5.

 

“Lenders”

means the lending institutions listed on the signature pages of this Agreement

and their respective successors and assigns. Unless the context otherwise

requires, the term “Lenders” includes the Swingline Lender.

 

“Lending

Installation” means, with respect to a Lender, the Swingline

Lender or the Administrative Agent, the office, branch, subsidiary or affiliate

of such Lender, the Swingline Lender or the Administrative Agent listed on the

signature pages hereof or on a Schedule or otherwise selected by such Lender,

the Swingline Lender or the Administrative Agent pursuant to Section 2.17.

 

“Letter of

Credit” of a Person means a letter of credit which is issued

upon the application of such Person or upon which such Person is an account

party or for which such Person is in any way liable.

 

“Leverage

Ratio” means, as of any date of calculation, the ratio of (i)

Adjusted Indebtedness outstanding on such date to (ii) Consolidated EBITDAR for

the Borrower’s then most-recently ended four fiscal quarters.

 

“Lien”

means any lien (statutory or other), mortgage, pledge, hypothecation,

assignment, deposit arrangement, encumbrance or preference, priority or other

security agreement or preferential arrangement of any kind or nature whatsoever

(including the interest of a vendor or lessor under any conditional sale,

Capitalized Lease or other title retention agreement).

 

“Loan

Documents” means this Agreement, the Facility LC Applications,

any Notes issued pursuant to Section 2.12, the Subsidiary Guaranty and any

other documents and/or instruments given pursuant hereto or thereto or

otherwise in connection herewith or therewith.

 

“Loans”

means the loans made by the Lenders to the Borrower pursuant to this Agreement

(or any conversion or continuation thereof).

 

“Margin

Stock” has the meaning assigned to such term in Regulation U.

 

10

 

“Material Adverse Effect” means a

material adverse effect on (i) the business, Property, condition (financial or

otherwise) or results of operations of the Borrower and its Subsidiaries taken

as a whole, (ii) the ability of the Borrower to perform its obligations under

the Loan Documents to which it is a party, or (iii) the validity or

enforceability of any of the Loan Documents or the rights or remedies of the

Administrative Agent, the LC Issuer, the Swingline Lender or the Lenders

thereunder.

 

“Material Indebtedness” shall have the

meaning set forth in Section 7.5.

 

“Maturity Date” means September 30,

2007.

 

“Maximum Rate” shall have the meaning

set forth in Section 12.20.

 

“Modify” and “Modification” are

defined in Section 2.19.1.

 

“Moody’s” means Moody’s Investors

Service, Inc.

 

“Multiemployer Plan” means a Plan

maintained pursuant to a collective bargaining agreement or any other

arrangement to which the Borrower or any member of the Controlled Group is a

party to which more than one employer is obligated to make contributions.

 

“Net Mark-to-Market Exposure” of a

Person means, as of any date of determination, the excess (if any) of all

unrealized losses over all unrealized profits of such Person arising from Rate

Management Transactions.  “Unrealized

losses” means the fair market value of the cost to such Person of replacing

such Rate Management Transaction as of the date of determination (assuming the

Rate Management Transaction were to be terminated as of that date), and

“unrealized profits” means the fair market value of the gain to such Person of

replacing such Rate Management Transaction as of the date of determination

(assuming such Rate Management Transaction were to be terminated as of that

date).

 

“Note” means any promissory note issued

at the request of a Lender pursuant to Section 2.12 in the form of Exhibit E.

 

“Notice of Assignment” is defined in

Section 11.3.2.

 

“Obligations” means all unpaid

principal of and accrued and unpaid interest on the Loans, all Reimbursement

Obligations, all accrued and unpaid fees and all expenses, reimbursements,

indemnities and other obligations of the Borrower to the Lenders or to any

Lender, the Swingline Lender, the Administrative Agent, the LC Issuer or any

indemnified party arising under the Loan Documents.

 

“Off-Balance Sheet Liability” of a

Person means (i) any repurchase obligation or repurchase liability of such

Person with respect to accounts or notes receivable sold by such Person, (ii)

any liability under any Sale and Leaseback Transaction which is not a

Capitalized Lease, (iii) any liability under any so-called “synthetic lease” transaction

entered into by such Person, or (iv) any obligation arising with respect to any

other transaction which is the functional

 

11

 

equivalent of or

takes the place of borrowing but which does not constitute a liability on the

balance sheet of such Person, but excluding from this clause (iv) Operating

Leases.

 

“Operating Lease” of a Person means any

lease of Property (other than a Capitalized Lease) by such Person as lessee

which has an original term (including any required renewals and any renewals

effective at the option of the lessor) of one year or more.

 

“Operating Lease Obligations” means, as

at any date of determination, the amount obtained by aggregating the present

values, determined in the case of each particular Operating Lease by applying a

discount rate (which discount rate shall equal the discount rate which would be

applied under Agreement Accounting Principles if such Operating Lease were a

Capitalized Lease) from the date on which each fixed lease payment is due under

such Operating Lease to such date of determination, of all fixed lease payments

due under all Operating Leases of the Borrower and its Subsidiaries.

 

“Other Taxes” is defined in Section

3.5(ii).

 

“Outstanding Credit Exposure” means, as

to any Lender at any time, the sum of (i) the aggregate principal amount of its

Revolving Loans outstanding at such time, plus (ii) the aggregate

principal amount of its Term Loans outstanding at such time, plus (iii)

an amount equal to its Applicable Percentage of the LC Obligations at such

time, plus (iv) an amount equal to its Swingline Exposure.

 

“Outstanding Revolving Credit Exposure”

means, as to any Lender at any time, the sum of (i) the aggregate principal

amount of its Revolving Loans outstanding at such time, plus (ii) an

amount equal to its Applicable Percentage of the LC Obligations at such time,

plus (iii) an amount equal to its Swingline Exposure.

 

“Participants” is defined in Section

11.2.1.

 

“Payment Date” means the last day of

December, 2002 and the last day of each third month thereafter through the

Maturity Date.

 

“PBGC” means the Pension Benefit

Guaranty Corporation, or any successor thereto.

 

“Permitted Indebtedness” is defined in

Section 6.11.

 

“Permitted Liens” is defined in Section

6.15.

 

“Person” means any natural person,

corporation, firm, joint venture, partnership, limited liability company,

association, enterprise, trust or other entity or organization, or any

government or political subdivision or any agency, department or

instrumentality thereof.

 

“Plan” means an employee pension

benefit plan which is covered by Title IV of ERISA or subject to the minimum

funding standards under Section 412 of the Code as to which the Borrower or any

member of the Controlled Group may have any liability.

 

12

 

“Pricing Schedule” means the Schedule

attached hereto identified as such.

 

“Prime

Rate” means the “prime rate” established by HNB from time to

time based on its consideration of economic, money market, business and

competitive factors, and it is not necessarily HNB’s most favored rate.  In the event HNB shall abolish or abandon

the practice of establishing its Prime Rate or should the same be

unascertainable, HNB shall designate a comparable reference rate which shall be

deemed to be the Prime Rate under this Agreement and the other Loan Documents.

 

“Property” of a Person means any and

all property, whether real, personal, tangible, intangible, or mixed, of such

Person, or other assets owned or leased.

 

“Purchasers” is defined in Section

11.3.1.

 

“Rate Management Transaction” means any

transaction (including an agreement with respect thereto) now existing or

hereafter entered into between the Borrower and any Lender or Affiliate thereof

which is a rate swap, basis swap, forward rate transaction, commodity swap,

commodity option, equity or equity index swap, equity or equity index option,

bond option, interest rate option, foreign exchange transaction, cap

transaction, floor transaction, collar transaction, forward transaction,

currency swap transaction, cross-currency rate swap transaction, currency

option or any other similar transaction (including any option with respect to

any of these transactions) or any combination thereof, whether linked to one or

more interest rates, foreign currencies, commodity prices, equity prices or

other financial measures.

 

“Rate Management Obligations” of a

Person means any and all obligations of such Person, whether absolute or

contingent and howsoever and whenever created, arising, evidenced or acquired

(including all renewals, extensions and modifications thereof and substitutions

therefor), under (i) any and all Rate Management Transactions, and (ii) any and

all cancellations, buy backs, reversals, terminations or assignments of any

Rate Management Transactions.

 

“Regulation D” means Regulation D of

the Board as from time to time in effect and any successor thereto or other

regulation or official interpretation of the Board relating to reserve requirements

applicable to member banks of the Federal Reserve System.

 

“Regulation T” means Regulation T of

the Board as from time to time in effect and all official rulings and

interpretations thereunder or thereof.

 

“Regulation U” means Regulation U of

the Board as from time to time in effect and any successor or other regulation

or official interpretation of the Board relating to the extension of credit by

banks for the purpose of purchasing or carrying margin stocks applicable to

member banks of the Federal Reserve System.

 

“Regulation X” means Regulation X of

the Board as from time to time in effect and all official rulings and

interpretations thereunder or thereof.

 

13

 

“Reimbursement Obligations” means, at

any time, the aggregate of all obligations of the Borrower then outstanding

under Section 2.19 to reimburse the LC Issuer for amounts paid by the LC Issuer

in respect of any one or more drawings under Facility LCs.

 

“Reportable Event” means a reportable

event as defined in Section 4043 of ERISA and the regulations issued under such

section, with respect to a Plan, excluding, however, such events as to which

the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA

that it be notified within 30 days of the occurrence of such event, provided,

however, that a failure to meet the minimum funding standard of

Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event

regardless of the issuance of any such waiver of the notice requirement in

accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

 

“Reports” has the meaning set forth in

Section 12.6.

 

“Required Lenders” means, at any time,

Lenders in the aggregate having at least 51% of (i) the Term Loans and (ii)

Aggregate Revolving Commitment or, if the Aggregate Revolving Commitment has

been terminated, the Aggregate Outstanding Revolving Credit Exposure.

 

“Required Property Insurance Coverage”

means at any time insurance insuring all Property of the Borrower and its

Subsidiaries against loss or damage by fire, lightning, vandalism and malicious

mischief and all other perils covered by standard “extended coverage” or

“all-risk” insurance and such other risks and losses as is consistent with

sound business practices and is customarily maintained from time to time by

similar businesses similarly situated and owning, leasing or operating similar

properties, including, without limitation, war and terrorism coverage with

respect to all jet aircraft; all in such amounts, and having such deductibles

from the loss payable for any casualty, as is customary from time to time for

similar businesses similarly situated and owning, leasing or operating similar

properties.  If any insurance policies

with respect to Required Property Insurance Coverage is written on a

co-insurance basis, such policy must contain an agreed amount endorsement as

evidence that the coverage is in an amount sufficient to insure the full amount

of such Property.

 

“Required Public Liability Insurance Coverage”

means comprehensive general accident and public liability insurance (including,

without limitation, coverage for product liability, and elevators and

escalators, if any, on property owned or leased by the Borrower and its

Subsidiaries) against injury, loss and/or damage to persons and property and

such other risks and losses as is consistent with sound business practices and

is customarily maintained from time to time by similar businesses similarly

situated and owning, leasing or operating similar properties; all in such

amounts as is customary from time to time for similar businesses similarly

situated and owning, leasing or operating similar properties.

 

“Reserve Requirement” means, with

respect to an Interest Period, the maximum aggregate reserve requirement

(including all basic, supplemental, marginal and other reserves) which is

imposed under Regulation D on Eurocurrency liabilities.

 

“Revolving Commitment” means, for each

Lender, the obligation of such Lender to make Revolving Loans to, and to make

or participate in Swingline Loans and Facility LCs issued upon

 

14

 

the application

of, the Borrower in an aggregate amount not exceeding the amount set forth

opposite such Lender’s signature below or as set forth in any Notice of

Assignment relating to any assignment that has become effective pursuant to

Section 11.3.2, as such amount may be modified from time to time pursuant to

the terms hereof.

 

“Revolving Lender” means a Lender with

a Revolving Commitment or, if the Revolving Commitments have terminated or

expired, a Lender with Outstanding Revolving Credit Exposure.

 

“Revolving Loan” and “Revolving

Loans” means a Loan or the Loans, respectively, made pursuant to

clause (b) of Section 2.1.

 

“S&P” means Standard and Poor’s

Ratings Services, a division of The McGraw Hill Companies, Inc.

 

“Sale and Leaseback Transaction” means

any sale or other transfer of Property by any Person with the intent to lease

such Property as lessee.

 

“Schedule” refers to a specific

schedule to this Agreement, unless another document is specifically referenced.

 

“Section” means a numbered section of

this Agreement, unless another document is specifically referenced.

 

“Single Employer Plan” means a Plan

maintained by the Borrower or any member of the Controlled Group for employees

of the Borrower or any member of the Controlled Group.

 

“Subsidiary” of a Person means (i) any

corporation more than 50% of the outstanding securities having ordinary voting

power of which shall at the time be owned or controlled, directly or

indirectly, by such Person or by one or more of its Subsidiaries or by such

Person and one or more of its Subsidiaries, or (ii) any partnership, limited

liability company, association, joint venture or similar business organization

more than 50% of the ownership interests having ordinary voting power of which

shall at the time be so owned or controlled. 

Unless otherwise expressly provided, all references herein to a “Subsidiary”

means a Subsidiary of the Borrower.

 

“Subsidiary Guaranty” means that

certain Subsidiary Guaranty, dated of even date herewith, executed by the

Guarantor in favor of the Administrative Agent, for the ratable benefit of the

Lenders and the Swingline Lender, as the same may be amended, modified,

supplemented, extended, restated and replaced from time to time.

 

“Substantial Portion” means, with

respect to the Property of the Borrower and its Subsidiaries, Property which

(i) represents more than 10% of the consolidated assets of the Borrower and its

Subsidiaries as would be shown in the consolidated financial statements of the

Borrower and its Subsidiaries as at the beginning of the twelve-month period

ending with the month in which such determination is made, or (ii) is

responsible for more than 10% of the

 

15

 

consolidated net

sales or of the consolidated net income of the Borrower and its Subsidiaries as

reflected in the financial statements referred to in clause (i) above; provided,

however, that “10%”, as it appears in subparts (i) and (ii) above, shall be

changed to and shall mean, for all purposes of this definition, 20% provided

that the net proceeds (after payment of reasonable costs and expenses

associated with any such sale, including reasonable attorneys’ fees) upon sale

or other disposition by the Borrower or any Subsidiary of the consolidated

assets referenced in (i) and (ii) above are within 90 days of such sale or

other disposition, (a) reinvested in assets of the Borrower and its Subsidiaries

which are of similar type and substantially equivalent value as such

consolidated assets so sold or otherwise disposed of, and/or (b) paid to

Administrative Agent for application in accordance herewith to the amounts

owing under the Term Loan.

 

“Swingline Exposure” means, at any

time, the aggregate principal amount of all Swingline Loans outstanding at such

time.  The Applicable Percentage of any

Lender of the total Swingline Exposure at any time shall be the same as such Lender’s

Applicable Percentage of the total Aggregate Revolving Commitment at such time.

 

“Swingline Lender” means HNB or any of

its Affiliates, in its capacity as lender of Swingline Loans hereunder.

 

“Swingline Loan” means a Loan made

pursuant to Section 2.9.

 

“Taxes” means any and all present or

future taxes, duties, levies, imposts, deductions, charges or withholdings, and

any and all liabilities with respect to the foregoing, but excluding Excluded Taxes.

 

“Term Commitment” means, with respect

to each Lender, the commitment, if any, of such Lender to make a Term Loan

hereunder on the Effective Date, expressed as an amount representing the

maximum principal amount of the Term Loan to be made by such Lender

hereunder.  The amount of each Lender’s

Term Commitment is set forth on the page of this Agreement bearing such

Lender’s signature, or in the assignment substantially in the form of Exhibit C

pursuant to which such Lender shall have assumed its Term Commitment, as

applicable. The aggregate amount of the Lenders’ Term Commitments is

$20,000,000.00.

 

“Term Lender” means a Lender with a

Term Commitment or an outstanding Term Loan.

 

“Term Loan” and “Term Loans” mean each

Loan and the Loans made pursuant to clause (a) of Section 2.1.

 

“Transferee” is defined in Section

11.4.

 

“Type” means, with respect to any

Advance, its nature as a Floating Rate Advance or a Eurodollar Advance.

 

“Unfunded Liabilities” means the amount

(if any) by which the present value of all vested and unvested accrued benefits

under all Single Employer Plans exceeds the fair market value of

 

16

 

all such Plan

assets allocable to such benefits, all determined as of the then most recent

valuation date for such Plans using PBGC actuarial assumptions for single employer

plan terminations.

 

“Unmatured Default” means an event

which but for the lapse of time or the giving of notice, or both, would

constitute a Default.

 

“U.S.” means the United States of

America.

 

“Wholly-Owned Subsidiary” of a Person

means (i) any Subsidiary all of the outstanding voting securities of which

shall at the time be owned or controlled by such Person or, (ii) any

partnership, limited liability company, association, joint venture or similar

business organization 100% of the ownership interests having ordinary voting

power of which shall at the time be so owned or controlled.

 

Section 1.2. Classification

of Loans and Advances. For purposes of this Agreement, Loans may be

classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g.,

a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving

Loan”).  Advances also may be classified

and referred to by Class (e.g., a “Revolving Advance”) or by Type (e.g., a

“Eurodollar Advance”) or by Class and Type (e.g., a “Eurodollar Revolving

Advance”).

 

Section 1.3.            Terms Generally. The

definitions of terms herein shall apply equally to the singular and plural

forms of the terms defined. Whenever the context may require, any pronoun shall

include the corresponding masculine, feminine and neuter forms. The words

“include”, “includes” and “including” shall be deemed to be followed by the

phrase “without limitation”. The word “will” shall be construed to have the

same meaning and effect as the word “shall”. Unless the context requires otherwise

(a) any definition of or reference to any agreement, instrument or other

document herein shall be construed as referring to such agreement, instrument

or other document as from time to time amended, supplemented or otherwise

modified (subject to any restrictions on such amendments, supplements or

modifications set forth herein), (b) any reference herein to any Person shall

be construed to include such Person’s successors and assigns, (c) the words

“herein”, “hereof” and “hereunder”, and words of similar import, shall be

construed to refer to this Agreement in its entirety and not to any particular

provision hereof, and (d) all references herein to Articles, Sections, Exhibits

and Schedules shall be construed to refer to Articles and Sections of, and

Exhibits and Schedules to, this Agreement.

 

Section 1.4.            Accounting Terms.  Except as otherwise expressly provided

herein, all terms of an accounting or financial nature shall be construed in

accordance with Agreement Accounting Principles, as in effect from time to

time, provided

that, if the Borrower notifies the Administrative Agent that the Borrower

requests an amendment to any provision hereof to eliminate the effect of any

change occurring after the date hereof in Agreement Accounting Principles or in

the application thereof on the operation of such provision (or if the

Administrative Agent notifies the Borrower that the Required Lenders request an

amendment to any provision hereof for such purpose), regardless of whether any

such notice is given before or after such change in Agreement Accounting

Principles or in the application thereof, then such provision shall be

interpreted on the basis of Agreement Accounting Principles as in effect and

applied immediately before such change shall have become effective until such

notice shall have 

 

17

 

been withdrawn or such

provision amended in accordance herewith. 

Whenever under this Agreement any financial information, data and the

like is calculated on a consolidated basis for the Borrower and its

Subsidiaries, such financial information, data and the like of such Subsidiary

shall be included only to the extent of the Borrower’s percentage of ownership

of such Subsidiary.  Any reference in

this Agreement to the terms “extraordinary losses” and “extraordinary gains”

shall mean such losses and gains, respectively, categorized by the Company’s

external auditors as extraordinary in the financial statements of the Company

prepared in accordance with Agreement Accounting Principles in effect at the

date of such financial statements. 

Notwithstanding anything contained or implied herein to the contrary, no

change in Agreement Accounting Principles shall require the restatement of any

financial statements dated prior to such change and provided to any Lender, the

Administrative Agent, the Swingline Lender or the LC Issuer.  Further, no retroactive change shall be made

(as a result of any change in Agreement Accounting Principles which occurs

after the date of any such financial statements) in any of the calculations

made hereunder based upon the information contained in said financial

statements including, without limitation, the calculation of the Applicable

Margin.

 

ARTICLE

II

 

The

Credits

 

Section 2.1             Commitments. Subject to the

terms and conditions set forth herein, (a) each Lender severally agrees to make

a Term Loan to the Borrower on the Effective Date in a principal amount not

exceeding its Term Commitment, and (b) from and including the Effective Date

and prior to the Facility Termination Date, each Lender severally agrees to (i)

make Revolving Loans to the Borrower, and (ii) participate in Facility LCs

issued upon the request of the Borrower, provided that, after giving effect to the

making of each such Revolving Loan or the issuance of each such Facility LC,

such Lender’s Outstanding Revolving Credit Exposure shall not exceed its

Revolving Commitment.  Subject to the

terms of this Agreement, the Borrower may borrow, repay and reborrow Revolving

Loans at any time prior to the Facility Termination Date. Amounts repaid in

respect of Term Loans may not be reborrowed. The Revolving Commitments to

extend Revolving Loans hereunder shall expire on the Facility Termination

Date.  The LC Issuer will issue Facility

LCs hereunder on the terms and conditions set forth in Section 2.19.  The Swingline Lender will make Swingline

Loans hereunder on the terms and conditions set forth in Section 2.9.

 

Section 2.2.            Loans and Advances.

 

(i)            Each Loan (other than a Swingline

Loan) shall be made as part of an Advance consisting of Loans of the same Class

and Type made by the Lenders ratably in accordance with their respective

Commitments of the applicable Class. 

Advances of more than one Class and Type may be outstanding at the same

time.  The failure of any Lender to make

any Loan required to be made by it shall not relieve any other Lender of its

obligations hereunder, provided that the Commitments of the

Lenders are several and no Lender shall be responsible for any other Lender’s

failure to make Loans as required hereunder.

 

18

 

(ii)           Each Advance of Revolving Loans and

each Advance of Term Loans shall be comprised entirely of Floating Rate Loans

or Eurodollar Loans as the Borrower may request in accordance herewith. Each

Swingline Loan shall accrue interest at the rate offered with respect thereto

(not to exceed the Prime Rate) by the Swingline Lender. 

Each Lender at its option may make any Eurodollar Loan by

causing any domestic or foreign branch or Affiliate of such Lender to make such

Loan, provided

that any exercise of such option shall not affect the obligation of the

Borrower to repay such Loan in accordance with the terms of this Agreement.

 

Section 2.3.            Required Payments; Termination.  The Revolving Commitment of each Lender

shall terminate, and the Aggregate Outstanding Revolving Credit Exposure and

all other unpaid Obligations (other than Obligations with respect to the Term

Loans) shall be paid in full by the Borrower, on the Facility Termination Date.

 

Section 2.4.            Commitment Fee; Facility Fee;

Increases and Reductions in Aggregate Commitment.  The Borrower agrees to pay to the Administrative Agent for the

account of each Lender according to its Applicable Percentage (x) a commitment

fee at a per annum rate equal to the Applicable Fee Rate on the average daily

Available Aggregate Revolving Commitment (which shall be determined,

notwithstanding anything contained herein to the contrary or the definition of

the term ‘Available Aggregate Revolving Commitment’ as though no Swingline

Loans are outstanding, whether or not that is in fact the case) from the date

hereof to and including the Facility Termination Date, payable (in arrears) on

each Payment Date hereafter and on the Facility Termination Date. The Borrower

may permanently reduce the Aggregate Revolving Commitment in whole, or in part

ratably among the Lenders, in integral multiples of $5,000,000, upon at least

five Business Days written notice to the Administrative Agent, which notice

shall specify the amount of any such reduction, provided, however, that the

amount of the Aggregate Revolving Commitment may not be reduced below the

Aggregate Outstanding Revolving Credit Exposure.  All accrued commitment fees shall be payable on the effective

date of any termination of the obligations of the Lenders to make Credit

Extensions hereunder.  Upon the request

by the Borrower, with the consent of the Administrative Agent (which shall not

be unreasonably withheld or conditioned), Borrower may increase the Aggregate

Revolving Commitment by up to $10,000,000 provided that one or more Lenders or

other financial institutions selected by the Administrative Agent in

consultation with the Borrower are willing to increase its or their Revolving Commitments

by an aggregate amount equal to such increase.

 

Section 2.5.            Minimum Amount of Each Advance;

Eurodollar Advances.

 

(i)            Each

Eurodollar Advance shall be in the minimum amount of $1,000,000 (and in

multiples of $100,000 if in excess thereof).

 

(ii)           Each

Floating Rate Advance shall be in the minimum amount of $1,000,000 (and in

multiples of $100,000  in excess thereof), provided, however, that any

Floating Rate Advance may be in the lesser amount of the Available Aggregate

Revolving Commitment or the amount that is required to refinance the

reimbursement of an LC Disbursement as contemplated by Section 2.19.6.

 

19

 

(iii)          Each

Swingline Loan shall be in the minimum amount of $250,000  (and in multiples of $50,000  in

excess thereof).

 

(iv)          There

shall not at any time be more than a total of five (5) Eurodollar Revolving

Advances outstanding.

 

(v)           There

shall not at any time be more than a total of three (3) Eurodollar Term

Advances outstanding.

 

Section 2.6.            Method of Selecting Types and

Interest Periods for New Advances. 

The Borrower shall from time to time select the Class and Type of

Advance and, in the case of each Eurodollar Advance, the Interest Period

applicable thereto.  The Borrower shall

give the Administrative Agent irrevocable notice (a “Borrowing Notice”) not

later than noon (Columbus, Ohio time) at least one (1) Business Day before the

date on which Borrower desires that such Advance be made (the “Borrowing Date”)

of each Floating Rate Advance and three (3) Business Days before the Borrowing

Date for each Eurodollar Advance, specifying:

 

(i)            the

Borrowing Date, which shall be a Business Day, of such Advance,

 

(ii)           the

aggregate amount of such Advance,

 

(iii)          the

Class and Type of Advance selected, and

 

(iv)          in

the case of each Eurodollar Advance, the Interest Period applicable thereto.

 

If no election as to Type of Advance is specified in

the Borrowing Notice, the requested Advance shall be a Floating Rate

Advance.  If no Interest Period is

specified with respect to the requested Eurodollar Advance, then the Borrower

shall be deemed to have selected an Interest Period of one (1) month’s

duration.

 

Not later than noon (Columbus, Ohio time) one (1)

Business Day after the notice provided by Administrative Agent pursuant to

Section 2.16, each Lender shall make available its Floating Rate Loan or

Floating Rate Loans, and, not later than noon (Columbus, Ohio time) two (2)

Business Days after the notice provided by Administrative Agent pursuant to

Section 2.16, each Lender shall make available its Eurodollar Rate Loan or

Eurodollar Rate Loans, in each case by wire transfer of immediately available

funds to the Administrative Agent at its address specified pursuant to Section

12.14, provided

that Swingline Loans shall be made as provided in Section 2.9.  The Administrative Agent will make the funds

so received from the Lenders available to the Borrower by 3:00 p.m. (Columbus,

Ohio time) on the Borrowing Date at the Administrative Agent’s aforesaid

address.

 

Section 2.7.            Conversion and Continuation of

Outstanding Advances.  (i) Floating

Rate Advances shall continue as Floating Rate Advances unless and until such

Floating Rate Advances are converted into Eurodollar Advances pursuant to this

Section 2.7 or are repaid in accordance with the terms of this Agreement.  Each Eurodollar Advance shall continue as a

Eurodollar Advance until the end of the then applicable Interest Period

therefor, at which time

 

20

 

such Eurodollar

Advance shall be automatically converted into a Floating Rate Advance unless

(x) such Eurodollar Advance is or was repaid in accordance with the terms of

this Agreement or (y) the Borrower shall have given the Administrative Agent a

Conversion/Continuation Notice (as defined below) requesting that, at the end

of such Interest Period, such Eurodollar Advance continue as a Eurodollar

Advance for the same or another Interest Period.  Subject to the terms of Section 2.5, the Borrower may elect from

time to time to convert all or any part of a Floating Rate Advance into a

Eurodollar Advance.  The Borrower shall

give the Administrative Agent irrevocable notice (a “Conversion/Continuation

Notice”) of each conversion of a Floating Rate Advance into a Eurodollar

Advance or continuation of a Eurodollar Advance not later than noon (Columbus,

Ohio time) at least three Business Days prior to the date of the requested

conversion or continuation, specifying:

 

(a)           the requested date, which shall be a

Business Day, of such conversion or continuation,

 

(b)           the aggregate amount and Class and

Type of the Advance which is to be converted or continued, and the interest

rate and expiration date of the Interest Period currently in effect with

respect thereto, if any, and

 

(c)           the amount of such Advance which is

to be converted into or continued as a Eurodollar Advance and the duration of

the Interest Period to be applicable thereto.

 

(ii)           This Section 2.7 shall not apply to

Swingline Loans, which may not be converted or continued.

 

Section 2.8.            Optional

Principal Payments.  The Borrower

may from time to time pay, without penalty or premium, all outstanding Floating

Rate Advances, or, in a minimum aggregate amount of $1,000,000 or any integral

multiple of $100,000 in excess thereof, any portion of the outstanding

Floating Rate Advances upon two Business Days’ prior notice to the

Administrative Agent (and, in the case of prepayment of a Swingline Loan, upon

one Business Day’s prior notice to the Swingline Lender).  The Borrower may from time to time pay,

subject to the payment of any funding indemnification amounts required by

Section 3.4 but without penalty or premium, all outstanding Eurodollar

Advances, or, in a minimum aggregate amount of $1,000,000 or any integral

multiple of $100,000 in excess thereof, any portion of the outstanding

Eurodollar Advances upon three Business Days prior notice to the Administrative

Agent.  Any payment of Term Advances

prior to the maturity thereof shall be applied to the principal installments

thereof in reverse order of maturity.

 

Section 2.9.            Swingline

Loans.

 

(i)            Subject to the terms and conditions

set forth herein, the Swingline Lender agrees to make Swingline Loans to the

Borrower from the Effective Date and prior to the Facility Termination Date in

an aggregate principal amount at any time outstanding that will not result in

(x) the Swingline Exposure exceeding $5,000,000, or (y) the Swingline Exposure

exceeding the difference between the Aggregate Revolving Commitment and the

Aggregate Outstanding Revolving Credit Exposure, provided that the Swingline

Lender shall not be required to make a

 

21

 

Swingline Loan to

refinance an outstanding Swingline Loan. Within the foregoing limits and

subject to the terms and conditions set forth herein, the Borrower may borrow,

prepay and reborrow Swingline Loans.

 

(ii)           To request a Swingline Loan, the

Borrower shall give the Administrative Agent and the Swingline Lender

irrevocable notice of such request not later than noon (Columbus, Ohio time) on

the day of a proposed Swingline Loan. Each such notice shall be irrevocable and

shall specify the requested date of disbursement (which shall be a Business

Day) and amount of the requested Swingline Loan. The Swingline Lender shall

make each Swingline Loan available to the Borrower at the Administrative

Agent’s address specified pursuant to Section 12.14 (or, in the case of a

Swingline Loan made to finance the reimbursement of an LC Disbursement, by

remittance to the LC Issuer) on the requested date of such Swingline Loan.

 

(iii)          The Swingline Lender may by written

notice given to the Administrative Agent not later than noon (Columbus, Ohio

time) on any Business Day, require the Revolving Lenders to acquire

participations on such Business Day in all or a portion of the Swingline Loans

outstanding. Such notice shall specify the aggregate amount of Swingline Loans

in which Revolving Lenders will participate. Promptly upon receipt of such

notice, the Administrative Agent will give notice thereof to each Revolving

Lender, specifying in such notice such Revolving Lender’s Applicable Percentage

of such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and

unconditionally agrees, upon receipt of notice as provided above, to pay to the

Administrative Agent, for the account of the Swingline Lender, such Lender’s

Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender

acknowledges and agrees that its obligation to acquire participations in

Swingline Loans pursuant to this paragraph is absolute and unconditional and

shall not be affected by any circumstance whatsoever, including the occurrence

and continuance of a Default or Unmatured Default or the reduction or

termination of the Commitments, and that each such payment shall be made

without any offset, abatement, withholding or reduction whatsoever. Each

Revolving Lender shall comply with its obligation under this paragraph by wire

transfer of immediately available funds, in the same manner as provided in

Section 2.6 with respect to Loans made by such Lender (and Section 2.6 shall

apply, mutatis

mutandis, to the payment obligations of the Revolving Lenders), and

the Administrative Agent shall promptly pay to the Swingline Lender the amounts

so received by it from the Revolving Lenders. The Administrative Agent shall

notify the Borrower of any participations in any Swingline Loan acquired

pursuant to this paragraph, and thereafter payments in respect of such

Swingline Loan shall be made to the Administrative Agent and not to the

Swingline Lender. Any amounts received by the Swingline Lender from the

Borrower (or other party on behalf of the Borrower) in respect of a Swingline

Loan after receipt by the Swingline Lender of the proceeds of a sale of participations

therein shall be promptly remitted to the Administrative Agent; any such

amounts received by the Administrative Agent shall be promptly remitted by the

Administrative Agent to the Revolving Lenders that shall have made their

payments pursuant to this paragraph and to the Swingline Lender, as their

interests may appear. The purchase of participations in a Swingline Loan

pursuant to this paragraph shall not relieve the Borrower of any default in the

payment thereof.

 

Section 2.10.          Changes

in Interest Rate, etc.  Each

Floating Rate Advance shall bear interest on the outstanding principal amount

thereof, for each day from and including the date

 

22

 

such Advance is

made or is converted from a Eurodollar Advance into a Floating Rate Advance

pursuant to Section 2.7, to but excluding the date it is paid or is converted

into a Eurodollar Advance pursuant to Section 2.7 hereof, at a rate per annum

equal to the Floating Rate for such day. 

Changes in the rate of interest on that portion of any Advance

maintained as a Floating Rate Advance will take effect simultaneously with each

change in the Prime Rate or Federal Funds Effective Rate, as applicable.  Each Eurodollar Advance shall bear interest

on the outstanding principal amount thereof from and including the first day of

the Interest Period applicable thereto to (but not including) the last day of

such Interest Period at the interest rate determined by the Administrative

Agent as applicable to such Eurodollar Advance based upon the Borrower’s

selections under Sections 2.6 and 2.7 and otherwise in accordance with the

terms hereof.  No Interest Period may

end after the Facility Termination Date.

 

Section 2.11.          Rates

Applicable After Default. 

Notwithstanding anything to the contrary contained in Section 2.6 or

2.7, during the continuance of a Default or Unmatured Default, no Advance may

be made as or converted into a Eurodollar Advance and each existing Eurodollar

Loan shall, upon the expiration of the Interest Period in effect with respect

to each such Eurodollar Loan, be automatically converted to a Floating Rate

Loan.  In addition, during the

continuance of a Default (i) each Eurodollar Advance shall bear interest for

the remainder of the applicable Interest Period at the rate otherwise

applicable to such Interest Period plus 2% per annum, (ii) each Floating Rate

Advance shall bear interest at a rate per annum equal to the Floating Rate in

effect from time to time plus 2%, and (iii) the LC Fee shall be increased by 2%

per annum.

 

Section 2.12.          Repayment

of Loans; Evidence of Debt.

 

(i)            The Borrower hereby unconditionally

promises to pay (a) to the Administrative Agent for the account of each Lender

the then unpaid principal amount of each Revolving Loan of such Lender on the

Facility Termination Date, (b) to the Administrative Agent for the account of

each Lender the then unpaid principal amount of each Term Loan of such Lender

as provided in Section 2.13, and (c) to the Swingline Lender the then unpaid

principal amount of each Swingline Loan on the earlier of (x) the Facility

Termination Date and (y) ten days after the date on which each such Swingline

Loan is advanced.

 

(ii)           All payments of the Obligations

hereunder shall be made, without setoff, deduction, or counterclaim, in

immediately available funds to the Administrative Agent at the Administrative

Agent’s address specified pursuant to Section 12.14, or at any other Lending

Installation of the Administrative Agent specified in writing by the

Administrative Agent to the Borrower, by noon (Columbus, Ohio time) on the date

when due and shall (except in the case of Reimbursement Obligations for which

the LC Issuer has not been fully indemnified by the Lenders, or as otherwise

specifically required hereunder, including the payment of Obligations relating

to Swingline Loans which are required to be paid to the Swingline Lender) be

applied ratably by the Administrative Agent among the Lenders.  Each payment delivered to the Administrative

Agent for the account of any Lender shall be delivered promptly by the

Administrative Agent to such Lender in the same type of funds that the

Administrative Agent received at its address specified pursuant to Section

12.14 or at any Lending Installation specified in a notice received by the

Administrative Agent from such Lender. 

The Administrative Agent is

 

23

 

hereby authorized

to charge the account of the Borrower maintained with HNB for each payment of

principal and/or interest, Reimbursement Obligations and fees, as any of the

same becomes due hereunder.  Each

reference to the Administrative Agent in this Section 2.12 shall also be deemed

to refer, and shall apply equally, to the LC Issuer in the case of payments

required to be made by the Borrower to the LC Issuer pursuant to Section

2.19.6.

 

(iii)          Each Lender shall maintain in

accordance with its usual practice an account or accounts evidencing the

indebtedness of the Borrower to such Lender resulting from each Loan made by

such Lender from time to time, including the amounts of principal and interest

payable and paid to such Lender from time to time hereunder.

 

(iv)          The Administrative Agent shall also

maintain accounts in which it will record (a) the amount of each Loan made

hereunder, the Class and Type thereof, and, as applicable, the Interest Period

with respect thereto, (b) the amount of any principal or interest due and

payable or to become due and payable from the Borrower to each Lender

hereunder, (c) the original stated amount of each Facility LC and the amount of

LC Obligations outstanding at any time, and (d) the amount of any sum received

by the Administrative Agent hereunder from the Borrower and each Lender’s share

thereof.  The Administrative Agent or any Lender may, if the Administrative

Agent or any Lender so elects in connection with any transfer of its Loans or

enforcement of this Agreement or any Note, endorse on a schedule forming a part

hereof or a Note appropriate notation to evidence the foregoing information

with respect to the principal and interest then outstanding.

 

(v)           The entries maintained in the

accounts maintained pursuant to paragraphs (iii) and (iv) above shall be prima facie

evidence of the existence and amounts of the Obligations therein recorded; provided,

however, that the failure of the Administrative Agent or any Lender

to maintain such accounts or any error therein shall not in any manner affect

the obligation of the Borrower to repay the Obligations in accordance with the

terms and provisions hereof.

 

(vi)          Any Lender may request that its Loans

of any Class be evidenced by a promissory note (a “Note”). In such event, the

Administrative Agent shall prepare and the Borrower shall execute and deliver

to such Lender a Note payable to the order of such Lender.  Thereafter, the Loans evidenced by such Note

and interest thereon shall at all times (including after any assignment

pursuant to Section 11.3) be represented by one or more Notes payable to the

order of the payee named thereon or any assignee pursuant to Section 11.3,

except to the extent that any such Lender or assignee subsequently returns any

such Note for cancellation and requests that such Loans once again be evidenced

as described in paragraphs (iii) and (iv) above.

 

Section 2.13.          Amortization

of Term Loans.

 

(i)            Subject to adjustment pursuant to

paragraph (iii) of this Section, the Borrower shall repay Term Advances in

twenty consecutive quarterly installments, each in the amount of $1,000,000,

commencing on the last day of December, 2002, and continuing on each Payment

Date thereafter through the Maturity Date.

 

24

 

(ii)           To the extent not previously paid,

all Term Advances shall be due and payable on the Maturity Date.

 

(iii)          If the initial aggregate amount of the

Lenders’ Term Commitments exceeds the aggregate principal amount of Term Loans

that are made on the Effective Date, then the scheduled repayments of Term

Advances to be made pursuant to this Section shall be reduced ratably by an

aggregate amount equal to such excess. Any prepayment of a Term Advance shall

be applied to reduce the scheduled repayments (in inverse order of maturity) of

the Term Advances to be made pursuant to this Section.

 

(iv)          Prior to any repayment of any Term

Advances hereunder, the Borrower shall select the Term Advance or Term Advances

to be repaid and shall notify the Administrative Agent by telephone (confirmed

by telecopy) of such selection not later than 10:00 a.m. (Columbus, Ohio time),

two (2) Business Days before the scheduled date of such repayment, provided

that each repayment of Term Advances shall be applied to repay any outstanding

Floating Rate Advances before any Eurodollar Advances. Each repayment of a Term

Advance shall be applied ratably to the Term Loans included in the repaid Term

Advance. Repayments of Term Advances shall be accompanied by accrued interest

on the amount repaid.

 

Section 2.14.          Telephonic

Notices.  The Borrower hereby

authorizes the Lenders and the Administrative Agent to extend, convert or

continue Advances, effect selections of Classes and Types of Advances and to

transfer funds based on telephonic notices made by any person or persons the

Administrative Agent or any Lender in good faith believes to be acting on

behalf of the Borrower, it being understood that the foregoing authorization is

specifically intended to allow Borrowing Notices and Conversion/Continuation

Notices to be given telephonically.  The

Borrower agrees to deliver promptly to the Administrative Agent a written

confirmation signed by an Authorized Officer if such confirmation is requested

by the Administrative Agent or any Lender, of each telephonic notice. If the

written confirmation differs in any material respect from the action taken by

the Administrative Agent and the Lenders, the records of the Administrative

Agent and the Lenders shall govern absent manifest error.

 

Section 2.15.          Interest

Payment Dates; Interest and Fee Basis. 

Interest accrued on each Floating Rate Advance (other than Swingline

Loans) shall be payable on each Payment Date and at maturity.  Interest accrued on each Swingline Loan

shall be payable on the day that such Swingline Loan is required to be

repaid.  Interest accrued on each

Eurodollar Advance shall be payable on the last day of its applicable Interest

Period, on any date on which the Eurodollar Advance is prepaid, whether by

acceleration or otherwise, and at maturity. 

Interest accrued on each Eurodollar Advance having an Interest Period

longer than three months shall also be payable on the last day of each

three-month interval during such Interest Period.  Commitment fees, LC Fees and interest with respect to each

Eurodollar Loan and shall be calculated for actual days elapsed on the basis of

a 360-day year.  Interest with respect

to each Floating Rate Loan shall be calculated for actual days elapsed on the

basis of a 365-day year.  Interest shall

be payable for the day an Advance is made but not for the day of any payment on

the amount paid if payment is received prior to noon (Columbus, Ohio

time).  If any payment of principal of

or interest on an Advance shall become due on a day which is not a Business

Day, such payment

 

25

 

shall be made on

the next succeeding Business Day and, in the case of a principal payment, such

extension of time shall be included in computing interest in connection with

such payment.

 

Section 2.16.          Notification

of Advances, Interest Rates, Prepayments and Commitment Reductions or Increases.  Promptly after receipt thereof, the

Administrative Agent will notify each Lender of the contents of each Aggregate

Revolving Commitment reduction or increase notice, Borrowing Notice,

Conversion/Continuation Notice, and repayment notice received by it hereunder.  Promptly after notice from the LC Issuer,

the Administrative Agent will notify each Lender of the contents of each

request for issuance of a Facility LC hereunder.  The Administrative Agent will notify each Lender of the interest

rate applicable to each Eurodollar Advance promptly upon determination of such

interest rate and will give each Lender prompt notice of each change in the

Prime Rate or the Federal Funds Effective Rate, as applicable.

 

Section 2.17.          Lending

Installations.  Each Lender and the

Swingline Lender may book its Loans and its participation in any LC Obligations

and the LC Issuer may book the Facility LCs at any Lending Installation

selected by such Lender, the Swingline Lender or the LC Issuer, as the case may

be, and may change its Lending Installation from time to time.  All terms of this Agreement shall apply to

any such Lending Installation and the Loans and any Notes issued hereunder

shall be deemed held by each Lender, the Swingline Lender, and the LC issuer,

as the case may be, for the benefit of any such Lending Installation.  Each Lender, the Swingline Lender and the LC

Issuer may, by written notice to the Administrative Agent and the Borrower in

accordance with Section 12.14, designate replacement or additional Lending

Installations through which Loans will be made by it or Facility LCs will be

issued by it and for whose account Loan payments or payments with respect to

Facility LCs are to be made. 

Notwithstanding anything contained herein to the contrary, none of the

Lenders, the Swingline Lender or the LC Issuer shall designate a non-U.S.

Lending Installation unless it is determined in the reasonable discretion by

such Lender, Swingline Lender or LC Issuer that the extension or continuation

of any Eurodollar Loan cannot be made at a U.S. Lending Installation.

 

Section 2.18.          Non-Receipt

of Funds by the Administrative Agent. 

Unless the Borrower or a Lender, as the case may be, notifies the

Administrative Agent prior to the date on which it is scheduled to make payment

to the Administrative Agent of (i) in the case of a Lender, the proceeds of a

Loan, or (ii) in the case of the Borrower, a payment of principal, interest or

fees to the Administrative Agent for the account of the Lenders, that it does

not intend to make such payment, the Administrative Agent may assume that such

payment has been made.  The

Administrative Agent may, but shall not be obligated to, make the amount of

such payment available to the intended ultimate recipient in reliance upon such

assumption.  If such Lender or the

Borrower, as the case may be, has not in fact made such payment to the

Administrative Agent, the ultimate recipient of such payment shall, on demand

by the Administrative Agent, repay to the Administrative Agent the amount so

made available together with interest thereon in respect of each day during the

period commencing on the date such amount was so made available by the

Administrative Agent until the date the Administrative Agent recovers such

amount at a rate per annum equal to (x) in the case of payment by a Lender, the

Federal Funds Effective Rate for such day for the first three days and,

thereafter, the interest rate applicable to the relevant Loan, or (y) in the

case of payment by the Borrower, the interest rate applicable to the relevant

Loan.

 

26

 

Section 2.19. 

Facility LCs.

 

Section 2.19.1.  Issuance  The LC Issuer hereby agrees, on the terms and conditions set

forth in this Agreement, to issue standby letters of credit (each, a “Facility

LC”) and to renew, extend, increase, decrease or otherwise modify each Facility

LC (“Modify,” and each such action a “Modification”), from time to time from

and including the date of this Agreement and prior to the Facility Termination

Date upon the request of the Borrower; provided that immediately after each such

Facility LC is issued or Modified, (i) the aggregate amount of the outstanding

LC Obligations shall not exceed $5,000,000, and (ii) the Aggregate Outstanding

Revolving Credit Exposure shall not exceed the Aggregate Revolving

Commitment.  No Facility LC shall have

an expiry date later than the earlier of (x) the fifth Business Day prior to

the Facility Termination Date and (y) one year after its issuance.

 

Section 2.19.2. 

Participations  Upon the

issuance or Modification by the LC Issuer of a Facility LC in accordance with

this Section 2.19, the LC Issuer shall be deemed, without further action by any

party hereto, to have unconditionally and irrevocably sold to each Lender, and

each Lender shall be deemed, without further action by any party hereto, to

have unconditionally and irrevocably purchased from the LC Issuer, a

participation in such Facility LC (and each Modification thereof) and the

related LC Obligations in proportion to its Applicable Percentage.

 

Section 2.19.3. 

Notice.  Subject to

Section 2.19.1, the Borrower shall give the LC Issuer notice prior to 10:00

a.m. (Columbus, Ohio time) at least three (3) Business Days prior to the

proposed date of issuance or Modification of each Facility LC, specifying the

beneficiary, the proposed date of issuance (or Modification) and the expiry

date of such Facility LC, and describing the proposed terms of such Facility LC

and the nature of the transactions proposed to be supported thereby.  Upon receipt of such notice, the LC Issuer

shall promptly notify the Administrative Agent, and the Administrative Agent

shall promptly notify each Lender, of the contents thereof and of the amount of

such Lender’s participation in such proposed Facility LC.  The issuance or Modification by the LC

Issuer of any Facility LC shall, in addition to the conditions precedent set

forth in Article IV (the satisfaction of which the LC Issuer shall have no duty

to ascertain), be subject to the conditions precedent that such Facility LC

shall be satisfactory to the LC Issuer and that the Borrower shall have

executed and delivered such application agreement and/or such other instruments

and agreements relating to such Facility LC as the LC Issuer shall have

reasonably requested (each, a “Facility LC Application”).  In the event of any conflict between the

terms of this Agreement and the terms of any Facility LC Application, the terms

of this Agreement shall control.  Further,

notwithstanding any grant of collateral security under any Facility LC Application

for the obligations of Borrower thereunder, the LC Issuer agrees and

acknowledges that the Reimbursement Obligations and all other amounts owing by

Borrower under any Facility LC Application shall at all times be unsecured.

 

Section 2.19.4. 

LC Fees.  The Borrower

shall pay to the Administrative Agent (i) for the account of the Lenders

ratably in accordance with their respective Applicable Percentages, a letter of

credit fee at a per annum rate equal to the Applicable Fee Rate on the average

daily undrawn stated amount of each Facility LC, such fee to be payable in

arrears on each Payment Date, and (ii) for the Administrative Agent for its own

account, a one-time letter of credit fee in

 

27

 

an amount equal to

15 basis points of the stated amount of each Facility LC, such fee to be

payable on the date of such issuance or increase (each such fee described in

this sentence an “LC Fee”).  The

Borrower shall also pay to the LC Issuer for its own account, such reasonable

and customary documentary and processing charges in connection with the

issuance or Modification of and draws under Facility LCs in accordance with the

LC Issuer’s standard schedule for such charges as in effect from time to time.

 

Section 2.19.5. 

Administration; Reimbursement by Lenders.  Upon receipt from the beneficiary of any

Facility LC of any demand for payment under such Facility LC, the LC Issuer

shall notify the Administrative Agent and the Administrative Agent shall

promptly notify the Borrower and each other Lender as to the amount to be paid

by the LC Issuer as a result of such demand and the proposed payment date (the

“LC Payment Date”).  The responsibility

of the LC Issuer to the Borrower and each Lender shall be only to determine

that the documents (including each demand for payment) delivered under each

Facility LC in connection with such presentment shall be in conformity in all

material respects with such Facility LC. 

The LC Issuer shall endeavor to exercise the same care in the issuance

and administration of the Facility LCs as it does with respect to letters of

credit in which no participations are granted, it being understood that in the

absence of any gross negligence or willful misconduct by the LC Issuer, each

Lender shall be unconditionally and irrevocably liable without regard to the

occurrence of any Default or any condition precedent whatsoever, to reimburse

the LC Issuer on demand for (i) such Lender’s Applicable Percentage of the

amount of each payment made by the LC Issuer under each Facility LC to the

extent such amount is not reimbursed by the Borrower pursuant to Section 2.19.6

below, plus (ii) interest on the foregoing amount to be reimbursed by such

Lender, for each day from the date of the LC Issuer’s demand for such

reimbursement (or, if such demand is made after 11:00 a.m. (Columbus, Ohio

time) on such date, from the next succeeding Business Day) to the date on which

such Lender pays the amount to be reimbursed by it, at a rate of interest per

annum equal to the Federal Funds Effective Rate for the first three days and,

thereafter, at a rate of interest equal to the rate applicable to Floating Rate

Advances.

 

Section 2.19.6. 

Reimbursement by Borrower. 

The Borrower shall be irrevocably and unconditionally obligated to

reimburse the LC Issuer on or before the applicable LC Payment Date for any

amounts paid by the LC Issuer upon any drawing under any Facility LC, without

presentment, demand, protest or other formalities of any kind; provided

that neither the Borrower nor any Lender shall hereby be precluded from

asserting any claim for direct (but not consequential) damages suffered by the

Borrower or such Lender to the extent, but only to the extent, caused by (i)

the willful misconduct or gross negligence of the LC Issuer in determining

whether a request presented under any Facility LC issued by it complied with

the terms of such Facility LC or (ii) the LC Issuer’s failure to pay under any

Facility LC issued by it after the presentation to it of a request strictly

complying with the terms and conditions of such Facility LC.  All such amounts paid by the LC Issuer and

remaining unpaid by the Borrower shall bear interest, payable on demand, for

each day until paid at a rate per annum equal to (x) the rate applicable to

Floating Rate Advances for such day if such day falls on or before the

applicable LC Payment Date and (y) the sum of 2% plus the rate applicable to

Floating Rate Advances for such day if such day falls after such LC Payment

Date.  The LC Issuer will pay to each

Lender ratably in accordance with its Applicable Percentage all amounts

received by it from the Borrower for application in payment, in whole or in

part, of the Reimbursement Obligation in

 

28

 

respect of any

Facility LC issued by the LC Issuer, but only to the extent such Lender has

made payment to the LC Issuer in respect of such Facility LC pursuant to

Section 2.19.5.  Subject to the terms

and conditions of this Agreement (including the submission of a Borrowing

Notice in compliance with Section 2.6 and the satisfaction of the applicable

conditions precedent set forth in Article IV), unless directed otherwise by the

Borrower, the Lenders shall make a Floating Rate Revolving Advance hereunder for

the purpose of satisfying any Reimbursement Obligation and, to the extent so

satisfied, the Borrower’s obligation to make such payment shall be discharged

and replaced by the resulting Floating Rate Revolving Advance.

 

Section 2.19.7. 

Obligations Absolute.  The

Borrower’s obligations under this Section 2.19 shall be absolute and

unconditional under any and all circumstances and irrespective of any setoff,

counterclaim or defense to payment which the Borrower may have or have had

against the LC Issuer, any Lender or any beneficiary of a Facility LC.  The Borrower further agrees with the LC

Issuer and the Lenders that the LC Issuer and the Lenders shall not be

responsible for, and the Borrower’s Reimbursement Obligation in respect of any

Facility LC shall not be affected by, among other things, the validity or

genuineness of documents or of any endorsements thereon, even if such documents

should in fact prove to be in any or all respects invalid, fraudulent or

forged, or any dispute between or among the Borrower, any of its Affiliates,

the beneficiary of any Facility LC or any financing institution or other party

to whom any Facility LC may be transferred or any claims or defenses whatsoever

of the Borrower or of any of its Affiliates against the beneficiary of any

Facility LC or any such transferee.  The

LC Issuer shall not be liable for any error, omission, interruption or delay in

transmission, dispatch or delivery of any message or advice, however

transmitted, in connection with any Facility LC, except for its gross

negligence or willful misconduct.  The

Borrower agrees that any action taken or omitted by the LC Issuer or any Lender

under or in connection with each Facility LC and the related drafts and

documents, if done without gross negligence or willful misconduct, shall be

binding upon the Borrower and shall not put the LC Issuer or any Lender under

any liability to the Borrower.  Nothing

in this Section 2.19.7 is intended to limit the right of the Borrower to make a

claim against the LC Issuer for damages as contemplated by the proviso to the

first sentence of Section 2.19.6.

 

Section 2.19.8. 

Actions of LC Issuer.  The

LC Issuer shall be entitled to rely, and shall be fully protected in relying,

upon any Facility LC, draft, writing, resolution, notice, consent, certificate,

affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,

statement, order 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, independent accountants and other experts

selected by the LC Issuer.  The LC

Issuer shall be fully justified in failing or refusing to take any action under

this Agreement unless it shall first have received such advice or concurrence

of the Required Lenders as it reasonably deems appropriate or 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. Notwithstanding any other provision of this Section

2.19, the LC Issuer shall in all cases be fully protected in acting, or in

refraining from acting, under this Agreement in accordance with a request of

the Required Lenders, and such request and any action taken or failure to act

pursuant thereto shall be binding upon the Lenders and any future holders of a

participation in any Facility LC.

 

29

 

Section 2.19.9. 

Indemnification.  The

Borrower hereby agrees to indemnify and hold harmless each Lender, the LC

Issuer and the Administrative Agent, and their respective directors, officers,

agents and employees from and against any and all claims and damages, losses,

liabilities, costs or expenses which such Lender, the LC Issuer or the

Administrative Agent may incur (or which may be claimed against such Lender,

the LC Issuer or the Administrative Agent by any Person whatsoever) by reason

of or in connection with the issuance, execution and delivery or transfer of or

payment or failure to pay under any Facility LC or any actual or proposed use

of any Facility LC, including any claims, damages, losses, liabilities, costs

or expenses which the LC Issuer may incur by reason of or in connection with

(i) the failure of any other Lender to fulfill or comply with its

obligations to the LC Issuer hereunder (but nothing herein contained shall

affect any rights the Borrower may have against any defaulting Lender) or

(ii) by reason of or on account of the LC Issuer issuing any Facility LC

which specifies that the term “Beneficiary” included therein includes any

successor by operation of law of the named Beneficiary, but which Facility LC

does not require that any drawing by any such successor Beneficiary be

accompanied by a copy of a legal document, satisfactory to the LC Issuer,

evidencing the appointment of such successor Beneficiary; provided that the Borrower

shall not be required to indemnify any Lender, the LC Issuer or the

Administrative Agent for any claims, damages, losses, liabilities, costs or

expenses to the extent, but only to the extent, caused by (x) the willful

misconduct or gross negligence of the LC Issuer in determining whether a

request presented under any Facility LC complied with the terms of such

Facility LC or (y) the LC Issuer’s failure to pay under any Facility LC after

the presentation to it of a request strictly complying with the terms and

conditions of such Facility LC. Nothing in this Section 2.19.9 is intended to

limit the obligations of the Borrower under any other provision of this

Agreement.

 

Section 2.19.10. 

Lenders’ Indemnification. Each Lender shall, ratably in

accordance with its Applicable Percentage, indemnify the LC Issuer, its

affiliates and their respective directors, officers, agents and employees (to

the extent not reimbursed by the Borrower) against any cost, expense (including

reasonable counsel fees and disbursements), claim, demand, action, loss or

liability (except such as result from such indemnitees’ gross negligence or

willful misconduct or the LC Issuer’s failure to pay under any Facility LC

after the presentation to it of a request strictly complying with the terms and

conditions of the Facility LC) that such indemnitees may suffer or incur in

connection with this Section 2.19 or any action taken or omitted by such

indemnitees hereunder.

 

Section 2.19.11.     Rights as a Lender.  In its capacity as a Lender, the LC Issuer

shall have the same rights and obligations as any other Lender.

 

Section 2.20.          Replacement

of Lender.  If the Borrower is

required pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to

any Lender or if any Lender’s obligation to make or continue, or to convert

Floating Rate Advances into, Eurodollar Advances shall be suspended pursuant to

Section 3.3 (any Lender so affected an “Affected Lender”), the Borrower may

elect, if such amounts continue to be charged or such suspension is still

effective, to replace such Affected Lender as a Lender party to this Agreement,

provided

that no Default or Unmatured Default shall have occurred and be continuing at

the time of such replacement, and provided further that, concurrently with

such replacement, (i) another bank or other entity which

 

30

 

is reasonably

satisfactory to the Borrower and the Administrative Agent shall agree, as of

such date, to purchase for cash the Advances and other Obligations due to the

Affected Lender pursuant to an assignment substantially in the form of Exhibit

C and to become a Lender for all purposes under this Agreement and to assume

all obligations of the Affected Lender as of such date and to comply with the

requirements of Section 11.3 applicable to assignments, and (ii) the Borrower

shall pay to such Affected Lender in same day funds on the day of such

replacement all interest, fees and other amounts then accrued but unpaid to

such Affected Lender by the Borrower hereunder to and including the date of

assumption, including payments due to such Affected Lender under Sections 3.1,

3.2 and 3.5.

 

ARTICLE

III

 

Yield

Protection; Taxes

 

Section 3.1.            Yield

Protection.  If, on or after the

date of this Agreement, the adoption of any law or any governmental or

quasi-governmental rule, regulation, policy, guideline or directive (whether or

not having the force of law), or any change in the interpretation or

administration thereof by any governmental or quasi-governmental authority,

central bank or comparable agency charged with the interpretation or

administration thereof, or compliance by any Lender, or the LC Issuer, or

applicable Lending Installation, with any request or directive (whether or not

having the force of law) of any such authority, central bank or comparable

agency:

 

(i)            subjects any Lender, the LC Issuer,

or any applicable Lending Installation, to any Taxes, or changes the basis of

taxation of payments (other than with respect to Excluded Taxes) to any Lender,

or the LC Issuer in respect of its Eurodollar Loans, Facility LCs or

participations therein, or

 

(ii)           imposes or increases or deems

applicable any reserve, assessment, insurance charge, special deposit or

similar requirement against assets of, deposits with or for the account of, or

credit extended by, any Lender, or the LC Issuer, or any applicable Lending

Installation (other than reserves and assessments taken into account in

determining the interest rate applicable to Eurodollar Advances), or

 

(iii)          imposes any other condition the result

of which is to increase the cost to any Lender, the LC Issuer, or any

applicable Lending Installation, of making, funding or maintaining its

Eurodollar Loans, or of issuing or participating in Facility LCs, or reduces

any amount receivable by any Lender, the LC Issuer, or any applicable Lending

Installation, in connection with its Eurodollar Loans, Facility LCs or

participations therein, or requires any Lender, the LC Issuer, or any

applicable Lending Installation, to make any payment calculated by reference to

the amount of Eurodollar Loans, Facility LCs or participation therein held or

interest of LC Fees received by it, by an amount deemed material by such Lender

or the LC Issuer, as the case may be, and the result of any of the foregoing is

to increase the cost to such Lender, LC Issuer, or applicable Lending Installation,

as the case may be, of making or maintaining its Eurodollar

 

31

 

Loans or of

issuing or participating in Facility LCs, or to reduce the return received by

such Lender, LC Issuer, or applicable Lending Installation, as the case may be,

in connection with such Eurodollar Loans, the Commitment, Facility LCs or

participations therein, then, within 15 days of demand by such Lender, or the

LC Issuer, as the case may be, the Borrower shall pay such Lender, or the LC

Issuer, as the case may be, such additional amount or amounts as will

compensate such Lender, or the LC Issuer, as the case may be, for such

increased cost or reduction in amount received.

 

Section 3.2.            Changes

in Capital Adequacy Regulations.  If

a Lender, or the LC Issuer determines the amount of capital required or

expected to be maintained by such Lender, the LC Issuer, or any Lending

Installation, or any corporation controlling such Lender, or the LC Issuer is

increased as a result of a Change (defined below), then, within 15 days of

demand by such Lender, or the LC Issuer, the Borrower shall pay such Lender, or

the LC Issuer the amount necessary (without any premium or penalty thereon or

otherwise with respect thereto) to compensate for any shortfall in the rate of

return on the portion of such increased capital which such Lender, or the LC

Issuer determines is attributable to this Agreement, its Outstanding Revolving

Credit Exposure, its Term Loans, its Revolving Commitment to make Revolving Loans

and/or issue or participate in Facility LCs, as the case may be (after taking

into account such Lender’s, or LC Issuer’s, policies as to capital

adequacy).  “Change” means (i) any

change after the date of this Agreement in the Risk-Based Capital Guidelines

(defined below), or (ii) any adoption of or change in any other law,

governmental or quasi-governmental rule, regulation, policy, guideline,

interpretation, or directive (whether or not having the force of law) after the

date of this Agreement which affects the amount of capital required or expected

to be maintained by any Lender, or the LC Issuer, or any Lending Installation

or any corporation controlling any Lender, or the LC Issuer.  “Risk-Based Capital Guidelines” means (i)

the risk-based capital guidelines in effect in the United States on the date of

this Agreement, including transition rules, and (ii) the corresponding capital

regulations promulgated by regulatory authorities outside the United States

implementing the July 1988 report of the Basle Committee on Banking Regulation

and Supervisory Practices Entitled “International Convergence of Capital

Measurements and Capital Standards,” including transition rules, and any

amendments to such regulations adopted prior to the date of this Agreement.

 

Section 3.3.            Availability

of Types of Advances.  If any

Lender, or the LC Issuer determines that maintenance of its Eurodollar Loans at

a suitable Lending Installation would violate any applicable law, rule,

regulation, or directive, whether or not having the force of law, or if the

Required Lenders determine that (i) deposits of a type and maturity appropriate

to match fund Eurodollar Advances are not available or (ii) the interest rate

applicable to Eurodollar Advances does not accurately reflect the cost of

making or maintaining Eurodollar Advances, then the Administrative Agent shall

suspend the availability of Eurodollar Advances and require any affected

Eurodollar Advances to be repaid or converted to Floating Rate Advances,

subject to the payment of any funding indemnification amounts required by

Section 3.4 (without any premium or penalty thereon or otherwise with respect

thereto).

 

Section 3.4.            Funding

Indemnification.  If any payment of

a Eurodollar Advance occurs on a date which is not the last day of the

applicable Interest Period, whether because of acceleration, prepayment or

otherwise, or a Eurodollar Advance is not made on the date specified

 

32

 

by the Borrower

for any reason other than default by the Lenders, the Borrower will indemnify

each Lender for any reasonable and properly documented loss or cost incurred by

it resulting therefrom, including any loss or cost in liquidating or employing

deposits acquired to fund or maintain such Eurodollar Advance (without any

premium or penalty thereon or otherwise with respect thereto).

 

Section 3.5.            Taxes.

 

(i)            All payments by the Borrower to or

for the account of any Lender, the Swingline Lender, the LC Issuer or the

Administrative Agent hereunder or under any Note or Facility LC Application

shall be made free and clear of and without deduction for any and all

Taxes.  If the Borrower shall be

required by law to deduct any Taxes from or in respect of any sum payable

hereunder to any Lender, the Swingline Lender, the LC Issuer or the

Administrative Agent, (a) 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 3.5) such Lender, the Swingline

Lender, the LC Issuer or the Administrative Agent (as the case may be) receives

an amount equal to the sum it would have received had no such deductions been

made, (b) the Borrower shall make such deductions, (c) the Borrower shall pay

the full amount deducted to the relevant authority in accordance with

applicable law and (d) the Borrower shall furnish to the Administrative Agent

the original copy of a receipt evidencing payment thereof within 30 days after

such payment is made.

 

(ii)           In addition, the Borrower hereby

agrees to pay any present or future stamp or documentary taxes and any other

excise or property taxes, charges or similar levies which arise from any

payment made hereunder or under any Note or Facility LC Application or from the

execution or delivery of, or otherwise with respect to, this Agreement or any

Note or Facility LC Application (“Other Taxes”).

 

(iii)          The Borrower hereby agrees to

indemnify the Administrative Agent, the Swingline Lender, the LC Issuer, and

each Lender for the full amount of Taxes or Other Taxes (including any Taxes or

Other Taxes imposed on amounts payable under this Section 3.5) paid by the

Administrative Agent, the Swingline Lender, the LC Issuer, or such Lender and

any liability (including penalties, interest and expenses) arising therefrom or

with respect thereto.  Payments due

under this indemnification shall be made within 30 days of the date the

Administrative Agent, the LC Issuer, or such Lender makes demand therefor pursuant

to Section 3.6.

 

(iv)          Any Lender that is entitled to an

exemption from or reduction of withholding tax with respect to payments under

this Agreement or any Note pursuant to the law of any relevant jurisdiction or

any treaty shall deliver to the Borrower (with a copy to the Administrative Agent),

at the time or times prescribed by applicable law, such properly completed and

executed documentation prescribed by applicable law as will permit such

payments to be made without withholding or at a reduced rate.

 

(v)           If the U.S. Internal Revenue Service

or any other governmental authority of the U.S. or any other country or any

political subdivision thereof asserts a claim that the Administrative Agent did

not properly withhold tax from amounts paid to or for the account of

 

33

 

any Lender

(because the appropriate form was not delivered or properly completed, because

such Lender failed to notify the Administrative Agent of a change in

circumstances which rendered its exemption from withholding ineffective, or for

any other reason), such Lender shall indemnify the Administrative Agent fully

for all amounts paid, directly or indirectly, by the Administrative Agent as

tax, withholding therefor, or otherwise, including penalties and interest, and

including taxes imposed by any jurisdiction on amounts payable to the

Administrative Agent under this subsection, together with all costs and

expenses related thereto (including attorneys fees and time charges of

attorneys for the Administrative Agent, which attorneys may be employees of the

Administrative Agent).  The obligations

of the Lenders under this Section 3.5(v) shall survive the payment of the

Obligations and termination of this Agreement.

 

Section 3.6.            Lender

Statements; Survival of Indemnity. 

To the extent reasonably possible, each Lender, and the LC Issuer shall

designate an alternate Lending Installation with respect to its Eurodollar

Loans to reduce any liability of the Borrower to such Lender or LC Issuer, as

applicable, under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of

Eurodollar Advances under Section 3.3, so long as such designation is not, in

the reasonable judgment of such Lender, or the LC Issuer, disadvantageous to

such Lender or the LC Issuer.  Each

Lender and the LC Issuer shall deliver a written statement to the Borrower

(with a copy to the Administrative Agent) as to the amount due, if any, under

Section 3.1, 3.2, 3.4 or 3.5.  Such

written statement shall set forth in reasonable detail the calculations upon

which such Lender or the LC Issuer determined such amount and shall be final,

conclusive and binding on the Borrower in the absence of manifest error.  Determination of amounts payable under such

Sections in connection with a Eurodollar Loan shall be calculated as though each

Lender or the LC Issuer funded each Eurodollar Loan or made any disbursement

under each Facility LC, as applicable, through the purchase of a deposit of the

type and maturity corresponding to the deposit used as a reference in

determining the Eurodollar Rate applicable to such Loan or Facility LC, whether

or not that is in fact the case, and any amounts owing by Borrower to any

Lender or the LC Issuer under such Sections shall not be deemed unreasonable or

not properly documented as a result of whether or not any Lender funded any

Eurodollar Loan or whether or not the LC Issuer made any disbursement under any

Facility LC in such manner.  Unless

otherwise provided herein, the amount specified in the written statement of any

Lender or the LC Issuer shall be payable on demand after receipt by the

Borrower of such written statement.  The

obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive

for 180 days following the later of (i) the payment of the Obligations and

termination of this Agreement, and (ii) the date that the event giving rise to

the obligation occurs (provided that if the event giving rise to the obligation

is retroactive, then such 180 day period shall be extended to include the

period of retroactive effect).

 

34

 

ARTICLE IV

 

Conditions

Precedent

 

Section 4.1.            Effective

Date; Initial Credit Extension.

 

(i)            The obligations of the Lenders to

make Loans and of the Swingline Lender to make Swingline Loans and of the LC

Issuer to issue Facility LCs hereunder shall not become effective until the

date on which each of the following conditions is satisfied:

 

(a)           The Borrower shall have furnished to

the Administrative Agent, with sufficient copies for the Lenders:

 

(1)           All documents, instruments,

agreements and other items as set forth in the Closing Agenda.

 

(2)           Such other documents and items as any

Lender or its counsel may have reasonably requested.

 

(b)           The Borrower shall have paid to the

Administrative Agent, for its own account, all fees and other amounts owing

pursuant to the letter agreement dated September 30, 2002, or as otherwise

agreed from time to time.

 

(c)           Simultaneously with the first

Advance, Borrower shall have (i) paid in full all indebtedness and liabilities

outstanding pursuant to the Loan Agreement among Borrower, the banks party

thereto and Bank One, as agent, dated August 1, 1998, as the same may have been

amended from time to time (the “Previous Loan Agreement”), except to the extent

any of the same constitutes Permitted Indebtedness hereunder, and (ii)

terminated any commitment to extend further credit and/or additional loans

under the Previous Loan Agreement.

 

(d)           The Administrative Agent shall have received the executed

legal opinion of Vorys, Sater, Seymour & Pease, legal counsel to the

Borrower and Guarantor, in favor of the Lenders, Swingline Lender, LC Issuer,

and Administrative Agent, in substantially the form attached hereto as Exhibit

“A”.

 

(ii)           The Administrative Agent shall notify

the Borrower and the Lenders of the Effective Date, and such notice shall be

conclusive and binding. Notwithstanding the foregoing, the obligations of the

Lenders to make Loans and of the Swingline Lender to make Swingline Loans and

of the LC Issuer to issue the Facility LCs hereunder shall not become effective

unless each of the foregoing conditions is satisfied (or waived pursuant to

Section 12.13) on the Closing Date.

 

Section 4.2.            Each

Credit Extension.  The obligation of

each Lender to make a Loan on the occasion of any Advance and of the Swingline

Lender to make a Swingline Loan on the occasion of any Swingline Advance and of

the LC Issuer to issue, amend, renew or extend any Facility LC, is subject to

the satisfaction of the following conditions:

 

(i)                                     There

exists no Default or Unmatured Default.

 

(ii)           The

representations and warranties contained in Article V are true and correct as

of such Credit Extension Date except to the extent any such representation or

warranty is stated

 

35

 

to relate solely to an

earlier date, in which case such representation or warranty shall have been

true and correct on and as of such earlier date.

 

(iii)          All

legal matters incident to the making of such Credit Extension shall be

satisfactory to the Lenders and their counsel.

 

Each Borrowing Notice or request for issuance of a

Facility LC with respect to each such Credit Extension shall constitute a

representation and warranty by the Borrower that the conditions contained in

Sections 4.2(i)-(ii) have been satisfied.

 

ARTICLE V

 

Representations And Warranties

 

The Borrower represents and warrants to the Lenders

that:

 

Section 5.1.            Existence and Standing.  Each of the Borrower and its Subsidiaries is

a corporation, or (in the case of Subsidiaries only) partnership or limited

liability company, duly and properly incorporated or organized, as the case may

be, validly existing and (to the extent such concept applies to such entity) in

good standing under the laws of its jurisdiction of incorporation or organization

and has all requisite authority to conduct its business in each jurisdiction in

which its business is conducted.

 

Section 5.2.            Authorization and Validity.  The Borrower and each Guarantor has the

power and authority and legal right to execute and deliver the Loan Documents

to which it is a party and to perform its obligations thereunder.  The execution and delivery by the Borrower

and each Guarantor of the Loan Documents to which it is a party and the performance

of its obligations thereunder have been duly authorized by proper corporate

proceedings, and the Loan Documents constitute legal, valid and binding

obligations of the Borrower and each Guarantor, as applicable, enforceable

against the Borrower and each Guarantor in accordance with their terms, except

as enforceability may be limited by bankruptcy, insolvency or similar laws

affecting the enforcement of creditors’ rights generally and general principles

of equity.

 

Section 5.3.            No Conflict; Government Consent.  Neither the execution and delivery by the

Borrower or any Guarantor of the Loan Documents to which it is a party, nor the

consummation of the transactions therein contemplated, nor compliance with the

provisions thereof will violate (i) any law, rule, regulation, order, writ,

judgment, injunction, decree or award binding on the Borrower, any Guarantor,

or any of their respective Subsidiaries or (ii) the Borrower’s, any

Guarantor’s, or any of their respective Subsidiaries’, articles or certificate

of incorporation, partnership agreement, certificate of partnership, articles

or certificate of organization, by-laws, or operating or other management

agreement, as the case may be, or (iii) the provisions of any indenture,

instrument or agreement to which the Borrower, any Guarantor, or any of their

respective Subsidiaries is a party or is subject, or by which any of them, or

their Property, is bound, or conflict with or constitute a default thereunder,

or result in, or require, the creation or imposition of any Lien in, of or on

the Property of the Borrower, any Guarantor or any of their respective

Subsidiaries of any of them pursuant to the terms of any such indenture,

 

36

 

instrument or

agreement.  No order, consent,

adjudication, approval, license, authorization, or validation of, or filing,

recording or registration with, or exemption by, or other action in respect of

any governmental or public body or authority, or any subdivision thereof, which

has not been obtained by the Borrower, any Guarantor, or any of their

Subsidiaries, is required to be obtained in connection with the execution and

delivery of the Loan Documents, the borrowings under this Agreement, the

payment and performance by the Borrower of the Obligations or the legality,

validity, binding effect or enforceability of any of the Loan Documents.

 

Section 5.4.            Financial Statements.  The December  31, 2001 and June 30, 2002

consolidated financial statements of the Borrower and its Subsidiaries

heretofore delivered to the Lenders were prepared in accordance with Agreement

Accounting Principles in effect on the date such statements were prepared and

fairly present the consolidated financial condition and operations of the

Borrower and its Subsidiaries at such date and the consolidated results of

their operations for the period then ended. The financial projections provided

by Borrower and/or its Subsidiaries to the Lenders in connection with the

transactions contemplated hereby shall be certified by an Authorized Officer as

being an accurate summary of the estimated expected results of operations and

cash flow of the Borrower and its Subsidiaries to the best knowledge of such

Authorized Officer as of the date of said financial projections based upon

present circumstances; it being acknowledged and agreed by the parties hereto

that the assumptions contained therein may not materialize, and unanticipated

events and circumstances may occur subsequent to the date of said financial

projections which may result in actual results which vary (perhaps, materially)

from the financial projections.

 

Section 5.5.            Material Adverse Change.  Since June 30, 2002 there has been no change

in the business, Property, condition (financial or otherwise) or results of

operations of the Borrower and its Subsidiaries which could reasonably be

expected to have a Material Adverse Effect.

 

Section 5.6.            Taxes.  The Borrower and its Subsidiaries have filed

all United States federal tax returns and all other tax returns which are

required to be filed and have paid all taxes due pursuant to said returns or

pursuant to any assessment received by the Borrower or any of its Subsidiaries,

except such taxes, if any, as are being contested in good faith and as to which

adequate reserves have been provided in accordance with Agreement Accounting

Principles and as to which no Lien exists. 

No tax liens have been filed and no claims are being asserted with

respect to any such taxes.  The charges,

accruals and reserves on the books of the Borrower and its Subsidiaries in

respect of any taxes or other governmental charges are adequate.  If the Borrower or any of its Subsidiaries

is a limited liability company, each such limited liability company qualifies

for partnership tax treatment under United States federal tax law.

 

Section 5.7.            Litigation and Contingent

Obligations.  There is no

litigation, arbitration, governmental investigation, proceeding or inquiry

pending or, to the knowledge of any of their officers, threatened against or

affecting the Borrower or any of its Subsidiaries which could reasonably be

expected to have a Material Adverse Effect or which seeks to prevent, enjoin or

delay the making of any Credit Extensions. 

Other than any liability incident to any litigation, arbitration or proceeding

which could not reasonably be expected to have a Material Adverse

 

37

 

Effect, the

Borrower has no material Contingent Obligations not provided for or disclosed

in the financial statements referred to in Section 5.4.

 

Section 5.8.            Subsidiaries.  Schedule I contains an accurate list of all

Subsidiaries of the Borrower as of the date of this Agreement, setting forth

their respective jurisdictions of organization and the percentage of their

respective capital stock or other ownership interests owned by the Borrower or

other Subsidiaries.  All of the issued

and outstanding shares of capital stock or other ownership interests of such

Subsidiaries have been (to the extent such concepts are relevant with respect

to such ownership interests) duly authorized and issued and are fully paid and

non-assessable.

 

Section 5.9.            ERISA.  The Unfunded Liabilities of all Single

Employer Plans do not in the aggregate exceed $100,000.  Neither the Borrower nor any other member of

the Controlled Group has incurred, or is reasonably expected to incur, any

withdrawal liability to Multiemployer Plans in excess of $100,000 in the

aggregate.  Each Plan complies in all

material respects with all applicable requirements of law and regulations, no

Reportable Event has occurred with respect to any Plan, neither the Borrower

nor any other member of the Controlled Group has withdrawn from any Plan or

initiated steps to do so, and no steps have been taken to reorganize or

terminate any Plan.

 

Section 5.10.          Accuracy of Information.  No information, exhibit or report furnished

by the Borrower or any of its Subsidiaries to the Administrative Agent or to

any Lender in connection with the negotiation of, or compliance with, the Loan

Documents (i) contained any material misstatement of fact, or (ii) omitted to

state any fact necessary to make the statements contained therein not

materially misleading.

 

Section 5.11.          Federal Reserve Regulations.  Neither the Borrower nor any of its

Subsidiaries is engaged principally, or as one of its important activities, in

the business of extending credit for the purpose of buying or carrying Margin

Stock.

 

Section 5.12.          Material Agreements.  Neither the Borrower nor any of its

Subsidiaries is a party to any agreement or instrument or subject to any charter

or other corporate restriction which could reasonably be expected to have a

Material Adverse Effect.  Neither the

Borrower nor any of its Subsidiaries is in default in the performance,

observance or fulfillment of any of the obligations, covenants or conditions

contained in any agreement (including, without limitation, any agreement or

instrument evidencing or governing Indebtedness) to which it is a party, which

default could reasonably be expected to have a Material Adverse Effect.

 

Section 5.13.          Compliance With Laws.  The Borrower and its Subsidiaries have

complied with all applicable statutes, rules, regulations, orders and

restrictions of any domestic or foreign government or any instrumentality or

agency thereof having jurisdiction over the conduct of their respective

businesses or the ownership of their respective Properties except for any

failure to comply with any of the foregoing which could not reasonably be

expected to have a Material Adverse Effect.

 

38

 

Section 5.14.          Properties.

 

(i)            Each

of the Borrower and its Subsidiaries has good title to, or valid leasehold

interests in, all of the Property material to its business (including its real

properties), free and clear of all Liens, except for minor defects in title

that do not interfere with its ability to conduct its business as currently

conducted or to utilize such properties for their intended purposes and

Permitted Liens.

 

(ii)           Each

of the Borrower and its Subsidiaries has complied with all material obligations

under all leases to which it is a party and that are material to the Borrower

and its Subsidiaries taken as a whole and all such leases are in full force and

effect.  Each of the Borrower and its

Subsidiaries enjoys peaceful and undisturbed possession under all such material

leases under which a Borrower or any such Subsidiary is a lessee.

 

(iii)          Each

of the Borrower and its Subsidiaries owns, or is licensed or otherwise

permitted to use, all trademarks, trade names, copyrights, patents and other

intellectual property material to its business, and the use thereof by the

Borrower and its Subsidiaries does not infringe upon the rights of any other

Person, except for any such infringements that, individually or in the

aggregate, could not reasonably be expected to result in a Material Adverse

Effect.

 

(iv)          Schedule 5.14 sets forth the address

of each real property that is owned or leased by the Borrower or any of its

Subsidiaries as of the Effective Date.

 

(v)           As of the Effective Date, neither the

Borrower nor any of its Subsidiaries has received notice of, or has knowledge

of, any pending or contemplated condemnation proceeding affecting any of its

real properties or any sale or disposition thereof, in lieu of condemnation.

Neither any of the Borrower’s or its Subsidiaries’ real properties, nor any

interest therein, is subject to any right of first refusal, option or other

contractual right to purchase such real property or interest therein.

 

Section 5.15.          Plan Assets; Prohibited

Transactions.  The Borrower is not

an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. §

2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)

which is subject to Title I of ERISA or any plan (within the meaning of Section

4975 of the Code), and neither the execution of this Agreement nor the making

of Credit Extensions hereunder gives rise to a prohibited transaction within

the meaning of Section 406 of ERISA or Section 4975 of the Code.

 

Section 5.16.          Environmental Matters.  In the ordinary course of its business, the

officers of the Borrower consider the effect of Environmental Laws on the

business of the Borrower and its Subsidiaries, in the course of which they

identify and evaluate potential risks and liabilities accruing to the Borrower

due to Environmental Laws.  On the basis

of this consideration, the Borrower has concluded that Environmental Laws

cannot reasonably be expected to have a Material Adverse Effect.  Except as provided on Schedule 5.16, neither

the Borrower nor any of its Subsidiaries has received any notice to the effect

that its operations are not in material compliance with any of the requirements

of applicable Environmental Laws or are the subject of any federal or state

investigation evaluating whether any remedial action is needed to respond to a

release of any toxic or hazardous waste or substance into the environment,

which

 

39

 

non-compliance or

remedial action could reasonably be expected to have a Material Adverse Effect.

 

Section 5.17.          Investment Company Act.  Neither the Borrower nor any of its

Subsidiaries is an “investment company” or a company “controlled” by an

“investment company”, within the meaning of the Investment Company Act of 1940,

as amended.

 

Section 5.18.          Public Utility Holding Company Act.  Neither the Borrower nor any of its  Subsidiaries is a “holding company” or a

“subsidiary company” of a “holding company”, or an “affiliate” of a “holding

company” or of a “subsidiary company” of a “holding company”, within the

meaning of the Public Utility Holding Company Act of 1935, as amended.

 

Section 5.19.          Insurance.  The certificate (substantially in the form

attached as Schedule 5.19) signed by the President or Chief Financial Officer

of the Borrower, that attests to the existence and adequacy of, and summarizes,

the property and casualty insurance program carried by the Borrower with

respect to itself and its Subsidiaries and that has been furnished by the

Borrower to the Administrative Agent and the Lenders, is complete and

accurate.  This summary includes the

insurer’s or insurers’ name(s), policy number(s), expiration date(s), amount(s)

of coverage, type(s) of coverage, exclusion(s), and deductibles.  This summary also includes similar information,

and describes any reserves, relating to any self-insurance program that is in

effect.

 

Section 5.20.          Solvency.

 

(i)            Immediately

after the consummation of the transactions to occur hereunder and immediately

following the making of each Loan, if any, made on the date hereof and after

giving effect to the application of the proceeds of such Loans, (a) the fair

value of the assets of the Borrower and its Subsidiaries on a consolidated

basis, at a fair valuation, will exceed the debts and liabilities, subordinated,

contingent or otherwise, of the Borrower and its Subsidiaries on a consolidated

basis; (b) the present fair saleable value of the Property of the Borrower and

its Subsidiaries on a consolidated basis will be greater than the amount that

will be required to pay the probable liability of the Borrower and its

Subsidiaries on a consolidated basis on their debts and other liabilities,

subordinated, contingent or otherwise, as such debts and other liabilities

become absolute and matured; (c) the Borrower and its Subsidiaries on a

consolidated basis will be able to pay their debts and liabilities,

subordinated, contingent or otherwise, as such debts and liabilities become

absolute and matured; and (d) the Borrower and its Subsidiaries on a

consolidated basis will not have unreasonably small capital with which to

conduct the businesses in which they are engaged as such businesses are now

conducted and are proposed to be conducted after the date hereof.

 

(ii)           The

Borrower does not intend to, or to permit any of its Subsidiaries to, and does

not believe that it or any of its Subsidiaries will, incur debts beyond its

ability to pay such debts as they mature, taking into account the timing of and

amounts of cash to be received by it or any such Subsidiary and the timing of

the amounts of cash to be payable on or in respect of its Indebtedness or the

Indebtedness of any such Subsidiary.

 

40

 

Section 5.21.          Labor Matters.  As of the Effective Date, there are no strikes,

lockouts or slowdowns against the Borrower or any of its Subsidiaries pending

or, to the knowledge of the Borrower, threatened. The hours worked by and

payments made to employees of the Borrower and its Subsidiaries have not been

in violation of the Fair Labor Standards Act or any other applicable Federal,

state, local or foreign law dealing with such matters, except where any such

violations, individually or in the aggregate, would not be reasonably likely to

result in a Material Adverse Effect. All material payments due from the

Borrower or any of its Subsidiaries, or for which any claim may be made against

the Borrower or any such Subsidiary, on account of wages and employee health

and welfare insurance and other benefits, have been paid or accrued as a

liability on the books of the Borrower or such Subsidiary. The consummation of

the transactions contemplated hereby will not give rise to any right of

termination or right of renegotiation on the part of any union under any

collective bargaining agreement to which the Borrower or any of its

Subsidiaries is bound.

 

ARTICLE

VI

 

Covenants

 

During the term of this Agreement, unless the Required

Lenders shall otherwise consent in writing:

 

Section 6.1.            Financial Reporting.  The Borrower will maintain, for itself and

each of its Subsidiaries, a system of accounting established and administered

in accordance with Agreement Accounting Principles, and furnish to the

Administrative Agent:

 

(i)            Within

ninety (90) days after the close of each fiscal year of Borrower, the annual

report of Borrower on form 10K for each such fiscal year-end, as filed with the

Securities and Exchange Commission.

 

(ii)           Within

forty-five (45) days after the close of the each fiscal quarter of each of

Borrower’s fiscal years, the quarterly report of Borrower on form 10Q for each

such fiscal quarter-end, as filed with the Securities and Exchange Commission.

 

(iii)          Together with the deliveries required

under Section 6.1(ii), for each fiscal quarter-end, a compliance certificate in

substantially the form of Exhibit B signed by an Authorized Officer showing the

calculations necessary to determine compliance with this Agreement and stating

that no Default or Unmatured Default exists, or if any Default or Unmatured

Default exists, stating the nature and status thereof.

 

(iv)          As soon as possible and in any event

within ten (10) days after the Borrower knows that any Reportable Event has

occurred with respect to any Plan, a statement, signed by an Authorized Officer

of the Borrower, describing said Reportable Event and the action which the

Borrower proposes to take with respect thereto.

 

(v)           As soon as possible and in any event

within ten (10) days after receipt by the Borrower, a copy of (a) any notice or

claim to the effect that the Borrower or any of its

 

41

 

Subsidiaries is or may be

liable to any Person as a result of the release by the Borrower, any of its

Subsidiaries, or any other Person of any toxic or hazardous waste or substance

into the environment, and (b) any notice alleging any violation of any federal,

state or local environmental, health or safety law or regulation by the

Borrower or any of its Subsidiaries, which, in either case, could reasonably be

expected to have a Material Adverse Effect.

 

(vi)          As

soon as possible and in any event within ten (10) days after notice thereof,

notice of all actions, suits, audits, inquiries, proceedings, notices of

violations, investigations and/or other material actions before or by any

governmental or public authority or body, or any subdivision thereof,

including, without limitation, the Internal Revenue Service and/or the

Securities Exchange Commission of the U.S., against the Borrower or any

Subsidiary, which could, in the opinion of an Authorized Officer of the

Borrower, if adversely determined, reasonably be expected to result in a

Material Adverse Effect.

 

(vii)         Such other information (including

non-financial information) as the Administrative Agent or any Lender may from

time to time reasonably request.

 

Section 6.2.            Use of Proceeds.  The Borrower will use the proceeds of the

Loans for general corporate and working capital purposes.  The Borrower will not, nor will it permit

any of its Subsidiaries to, use any of the proceeds of the Advances or any Facility

LC to purchase or carry any Margin Stock or for any purpose that entails a

violation of, or that is inconsistent with, the provisions of the Regulations

of the Board, including Regulation T, U or X.

 

Section 6.3.            Notice of Default.  The Borrower will, and will cause each of

its Subsidiaries to, give prompt notice in writing to the Lenders of the

occurrence of any Default or Unmatured Default and of any other development,

financial or otherwise, which could reasonably be expected to have a Material Adverse

Effect.

 

Section 6.4.            Conduct of Business.  The Borrower will, and will cause each of

its Subsidiaries to, carry on and conduct its business in substantially the

same manner and in substantially the same fields of enterprise as it is

presently conducted and do all things necessary to remain duly incorporated or

organized, validly existing and (to the extent such concept applies to such

entity) in good standing as a domestic corporation, partnership or limited

liability company in its jurisdiction of incorporation or organization, as the

case may be, and maintain all requisite authority to conduct its business in

the jurisdiction of its organization and in each other jurisdiction in which

its business is conducted, unless the failure to be so authorized to conduct

business in each such other jurisdiction would not reasonably be expected to

have a Material Adverse Effect.

 

Section 6.5.            Taxes.  The Borrower will, and will cause each of

its Subsidiaries to, timely file complete and correct United States federal and

applicable foreign, state and local tax returns required by law and pay when

due all taxes, assessments and governmental charges and levies upon it or its

income, profits or Property, except those which are being contested in good

faith by appropriate proceedings and with respect to which adequate reserves

have been set aside in accordance with Agreement Accounting Principles.  At any time that the Borrower or any of

 

42

 

its Subsidiaries

is organized as a limited liability company, each such limited liability

company will qualify for partnership tax treatment under United States federal

tax law.

 

Section 6.6.            Insurance.  The Borrower will, and will cause each of

its Subsidiaries to, maintain with financially sound and reputable insurance

companies the Required Property Insurance Coverage and Required Public

Liability Insurance Coverage, and the Borrower will furnish to the

Administrative Agent upon request full information as to the insurance carried.

 

Section 6.7.            Compliance with Laws.  The Borrower will, and will cause each of

its Subsidiaries to, comply in all material respects with all laws, rules,

regulations, orders, writs, judgments, injunctions, decrees or awards to which

it may be subject including all Environmental Laws.

 

Section 6.8.            Maintenance of Properties.  The Borrower will, and will cause each of

its Subsidiaries to, do all things necessary to maintain, preserve, protect and

keep its Property in good repair, working order and condition, and make all

necessary and proper repairs, renewals and replacements so that its business

carried on in connection therewith may be properly conducted at all times,

except to the extent the failure to do so would not reasonably be expected to

cause a Material Adverse Effect.

 

Section 6.9.            Books and Records; Inspection.  The Borrower will, and will cause each of

its Subsidiaries to, (i) keep proper books of record and account in which full,

true and correct entries in all respects are made for all dealings and

transactions in relation to its business and activities, and (ii) permit the

Administrative Agent and the Lenders, by their respective representatives and

agents, with prior notice to Borrower to inspect any of the Property, books and

financial records of the Borrower and each of its Subsidiaries, to examine and

make copies of the books of accounts and other financial records of the

Borrower and each such Subsidiary, and to discuss the affairs, finances and

accounts of the Borrower and each such Subsidiary with, and to be advised as to

the same by, their respective officers at such reasonable times during

Borrower’s or such Subsidiary’s normal business hours and at reasonable

intervals as the Administrative Agent or any Lender may designate.

 

Section 6.10.          Operating Leases.  Borrower will not, nor will it permit any of

its Subsidiaries, to enter into any Operating Lease for aircraft having a term

greater than five (5) years.

 

Section 6.11.          Indebtedness.  The Borrower will not, nor will it permit

any of its Subsidiaries, as applicable, to, create, incur or suffer to exist

any Indebtedness, except any or all of the following (collectively “Permitted

Indebtedness”):

 

(i)                                     The

Loans and the Reimbursement Obligations.

 

(ii)                                  Indebtedness

existing on the date hereof and described in Schedule 2.

 

(iii)          Indebtedness

arising under Rate Management Transactions related to the Loans.

 

43

 

(iv)          Consolidated

Indebtedness of the Borrower and/or its Subsidiaries not exceeding, at any

time, $10,000,000 in the aggregate, and subject to such covenants, defaults,

and other terms and conditions reasonably satisfactory to the Administrative

Agent; provided that, prior to incurring such Indebtedness, Borrower shall

demonstrate to the satisfaction of the Administrative Agent that it will be in

compliance with all covenants and other terms and conditions contained in this

Agreement and that no Default or Unmatured Default exists or would be caused

thereby.

 

(v)           Consolidated

Indebtedness of the Borrower and its Subsidiaries not exceeding, at any time,

$2,000,000 in the aggregate.

 

(vi)          Indebtedness

between Borrower and its Subsidiaries and/or Affiliates not exceeding

$100,000,000 in an aggregate on terms from time to time disclosed to the

Administrative Agent in writing.

 

Section 6.12.          Merger.  The Borrower will not, nor will it permit

any of its Subsidiaries to, merge or consolidate with or into any other Person,

except that a Subsidiary may merge into the Borrower or a Wholly-Owned Subsidiary.

 

Section 6.13.          Sale of Assets.  The Borrower will not, nor will it permit

any of its Subsidiaries to, in one or any series of transactions, lease, sell

or otherwise dispose of Property (except Property which is purchased or

otherwise acquired by Borrower or any of its Subsidiaries ninety (90) or fewer

days prior to such lease, sale or other disposition) which, in the aggregate,

constitutes a Substantial Portion of the Property of Borrower or any

Subsidiary, to any other Person, except sales of inventory in the ordinary

course of business upon customary terms.

 

Section 6.14.          Investments and Acquisitions.  The Borrower will not, nor will it permit

any of its Subsidiaries to, make or suffer to exist any Investments (including

loans and advances to, and other Investments in, Subsidiaries, except as

explicitly permitted pursuant to Section 6.11), or commitments therefor, or to

create any Subsidiary or to become or remain a partner in any partnership or

joint venture, or to make any Acquisition of any Person, except:

 

(i)                                     Cash

Equivalent Investments.

 

(ii)           Existing

Investments in Subsidiaries and other Investments in existence on the date

hereof and described in Schedule I, including, without limitation, pursuant to

the management and licensing agreements between AMI, ASI and/or Jetride,

substantially on such terms and providing for management and royalty fees to

AMI as described in writing to Administrative Agent.

 

(iii)          Acquisitions

involving aggregate consideration paid or payable by the Borrower and/or any of

its Subsidiaries which is not in excess of $10,000,000.

 

Section 6.15.          Liens.  The Borrower will not, nor will it permit

any of its Subsidiaries to, create, incur, or suffer to exist (i) any Lien in,

of or on the Property of the Borrower or any of its Subsidiaries, or (ii) an

agreement with any Person (other than Administrative Agent for the ratable

benefit of the Lenders) which prohibits or restricts the granting of any such

Lien in favor

 

44

 

of the Administrative

Agent for the ratable benefit of the Lenders, except any or all of the

following (collectively, “Permitted Liens”):

 

(i)            Liens for taxes, assessments or

governmental charges or levies on its Property if the same shall not at the

time be delinquent or thereafter can be paid without penalty, or are being

contested in good faith and by appropriate proceedings and for which adequate

reserves in accordance with Agreement Accounting Principles shall have been set

aside on its books.

 

(ii)           Liens imposed by law, such as

carriers’, warehousemen’s and mechanics’ liens, landlord’s liens, and other

similar liens arising in the ordinary course of business which secure payment

of obligations not more than 60 days past due or which are being contested in

good faith by appropriate proceedings and for which adequate reserves shall

have been set aside on its books.

 

(iii)          Liens arising out of pledges or

deposits under worker’s compensation laws, unemployment insurance, old age

pensions, or other social security or retirement benefits, or similar

legislation.

 

(iv)          Utility easements, building

restrictions and such other encumbrances or charges against real property as

are of a nature generally existing with respect to properties of a similar

character and which do not in any material way affect the marketability of the

same or interfere with the use thereof in the business of the Borrower or its

Subsidiaries.

 

(v)           Liens existing on the date hereof and

described in Schedule II.

 

(vi)          Liens

existing in connection with existing and future Operating Leases and

Capitalized Leases.

 

(vii)         Liens in favor of the Administrative

Agent, for the benefit of the Lenders.

 

(viii)        Liens

to secure payment of a portion of the purchase price of any tangible fixed

asset acquired by the Borrower or any of its Subsidiaries may be created or

suffered to exist upon such fixed asset if the outstanding principal amount of

the Indebtedness secured by such Lien does not at any time exceed the purchase

price paid by the Borrower or such Subsidiary for such fixed asset and the

aggregate principal amount of all Indebtedness secured by such Liens does not

exceed $500,000 in the aggregate; provided that no such Lien shall encumber any

other asset at any time owned by the Borrower or such Subsidiary, and, provided

further, that not more than one such Lien shall encumber such fixed asset at

any one time.

 

Section 6.16.          Capital Expenditures.  The Borrower will not, and will not permit

any of its Subsidiaries to, make, or be committed to make, Capital Expenditures,

on a non-cumulative basis in the aggregate exceeding the amounts set forth

below:

 

$35,000,000 for Borrower’s fiscal year 2002;

 

$47,000,000 for each of Borrower’s fiscal years 2003

and 2004;

 

45

 

provided, however that no more than $30,000,000 of the maximum Capital

Expenditures permitted for each of fiscal years 2003 and 2004 shall be

attributable to aircraft purchases; and, provided further that, the difference

(up to $5,000,000) between (i) the maximum aggregate Capital Expenditures

permitted in any year, and (ii) the actual aggregate Capital Expenditures made

for such year, shall be permitted as a carry-over in any subsequent year and

shall increase the maximum Capital Expenditures permitted for any such

subsequent year.

 

Section 6.17.          Affiliates.  The Borrower will not, and will not permit

any of its Subsidiaries to, enter into any transaction (including the purchase

or sale of any Property or service) with, or make any payment or transfer to,

any Affiliate except in the ordinary course of business and pursuant to the

reasonable requirements of the Borrower’s or such Subsidiary’s business and

upon fair and reasonable terms no less favorable to the Borrower or such

Subsidiary than the Borrower or such Subsidiary would obtain in a comparable

arms-length transaction.

 

Section 6.18.          Letters of Credit.  The Borrower will not, nor will it permit

any of its Subsidiaries to, apply for or become liable upon or in respect of

any Letter of Credit other than Facility LCs.

 

Section 6.19.          Sale of Accounts.  The Borrower will not, nor will it permit

any of its Subsidiaries to, sell or otherwise dispose of any notes receivable

or Accounts Receivable, with or without recourse.

 

Section 6.20.          Sale and Leaseback Transactions and

other Off-Balance Sheet Liabilities. 

The Borrower will not, nor will it permit any of its Subsidiaries to,

enter into or suffer to exist one or more (i) Sale and Leaseback Transactions

of assets having book value in excess of (1) $10,000,000 in the aggregate

during any calendar year, or (2) $25,000,000 in the aggregate during the term

of this Agreement, or (ii) any other transaction pursuant to which it incurs or

has incurred Off-Balance Sheet Liabilities, except to the extent permitted

under (i) above.

 

Section 6.21.          Contingent Obligations.  The Borrower will not, nor will it permit

any of its Subsidiaries to, make or suffer to exist any Contingent Obligation

(including any Contingent Obligation with respect to the obligations of any of

Borrower’s Subsidiaries), except (i) by endorsement of instruments for deposit

or collection in the ordinary course of business, (ii) the Reimbursement

Obligations, and (iii) to the extent such Contingent Obligation(s) otherwise

constitute Permitted Indebtedness hereunder.

 

Section 6.22.          Financial Contracts.  The Borrower will not, nor will it permit

any of its Subsidiaries to, enter into or remain liable upon any Financial

Contract.

 

Section 6.23.          No Amendments to Certain Documents

and Agreements.  The Borrower will

not, nor will it permit any material amendment to its Articles of

Incorporation, its Code of Regulations, or any other governing documents,

except as required to maintain compliance with federal, state and local laws

and regulations from time to time applicable to Borrower; provided, however,

that Borrower shall provide thirty (30) days prior written notice to the

Administrative Agent of any such amendment.

 

46

 

Section 6.24           Intentionally Omitted.

 

Section 6.25           Financial Covenants.

 

Section 6.25.1.  Debt Service Coverage Ratio.  The Borrower will not permit the Debt

Service Coverage Ratio, determined as of the end of each of its fiscal quarters

for the then most-recently ended four fiscal quarters, to be less than 1.70 to

1.0.

 

Section 6.25.2.  Leverage Ratio.  The Borrower will not permit the Leverage

Ratio, determined as of the end of each of its fiscal quarters for the then

most-recently ended four fiscal quarters, to be greater than 2.0 to 1.0.

 

Section 6.25.3.  Minimum Tangible Net Worth. The

Borrower will at all times maintain Consolidated Tangible Net Worth of not less

than (i) as of Borrower’s fiscal  year-end 2001, $65,000,000, and (ii) as of

the last day of each of Borrower’s fiscal years thereafter, that amount which

is equal to the sum of the minimum Consolidated Tangible Net Worth required to

be maintained by Borrower in accordance with this Section as of the last day of

Borrower’s prior fiscal year, and 50% of Consolidated Net Income for such prior

fiscal year; provided that if such Consolidated Net Income is negative in any

fiscal year, the amount added in the subsequent fiscal year shall be zero.

 

ARTICLE

VII

 

Defaults

 

The occurrence of any one or more of the following

events shall constitute a Default:

 

Section 7.1.            Any

representation or warranty made or deemed made by or on behalf of the Borrower

or any of its Subsidiaries to the Lenders or the Administrative Agent under or

in connection with this Agreement, any Credit Extension, or any certificate or

information delivered in connection with this Agreement or any other Loan

Document shall be false in any material respect on the date as of which made.

 

Section 7.2.            Nonpayment

within five (5) days after the same becomes due of principal of any Loan or

interest due upon any Loan, any Reimbursement Obligation or of any commitment

fee, LC Fee or other obligations under any of the Loan Documents.

 

Section 7.3.            The

breach by the Borrower of any of the terms or provisions of Article VI;

provided, however, that so long as (i) no breach by Borrower of any such terms

or provisions of Article VI has occurred previously in the prior twelve (12)

consecutive months, and (ii) such breach is not of the terms or provisions of

Sections 6.2, 6.6, 6.8, 6.9, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.18, 6.19,

6.20, 6.21, 6.22, 6.23, and/or 6.25, then the same shall not constitute a

Default hereunder if cured to the reasonable satisfaction of Administrative

Agent within fifteen (15) days after the earlier of (i) written notice to

Borrower thereof from the Administrative Agent or any Lender, or (ii) such time

as any officer of Borrower has become aware of said breach.

 

47

 

Section 7.4.            The

breach by the Borrower (other than a breach which constitutes a Default under

another Section of this Article VII) of any of the terms or provisions of this

Agreement which is not remedied within fifteen (15) days after the earlier of

(i) written notice to Borrower thereof from the Administrative Agent or any

Lender, or (ii) such time as any officer of Borrower has become aware of said

breach.

 

Section 7.5.            Failure

of the Borrower or any of its Subsidiaries or any Affiliate of Borrower to pay

when due (i) any Indebtedness or Rate Management Obligation(s) owing to the

Lenders and unrelated to this Agreement, (ii) any Indebtedness owing by any of

them in favor of any other Party which, individually or together with such

other Indebtedness as to which any such failure exists, has an aggregate outstanding

principal amount in excess of $1,000,000 (“Material Indebtedness”), or

(iii) any Permitted Indebtedness owing to Bank One, N.A. or Key Corporate

Capital Inc.; or the default by the Borrower or any of its Subsidiaries or

Affiliates in the performance (beyond the applicable grace or cure period with

respect thereto, if any) of any term, provision or condition contained in any

agreement under which any such Indebtedness, Rate Management Obligation(s) or

Material Indebtedness was created or is governed, including, without

limitation, in any Rate Management Transaction, or any other event shall occur

or condition exist, the effect of which default or event is to cause, or to

permit the holder or holders of such Indebtedness, Rate Management

Obligation(s) or Material Indebtedness to cause, such Indebtedness, Rate

Management Obligation(s) or Material Indebtedness to become due prior to its

stated maturity; or any Indebtedness, Rate Management Obligation(s) or Material

Indebtedness of the Borrower or any of its Subsidiaries or Affiliates shall be

declared to be due and payable or required to be prepaid or repurchased (other

than by a regularly scheduled payment) prior to the stated maturity thereof; or

the Borrower or any of its Subsidiaries or Affiliates shall not pay, or admit

in writing its inability to pay, its debts generally as they become due.

 

Section 7.6.            The

Borrower or any of its Subsidiaries shall (i) have an order for relief entered

with respect to it under the Federal bankruptcy laws as now or hereafter in

effect, (ii) make an assignment for the benefit of creditors, (iii) apply for,

seek, consent to, or acquiesce in, the appointment of a receiver, custodian,

trustee, examiner, liquidator or similar official for it or any Substantial

Portion of its Property, (iv) institute any proceeding seeking an order for

relief under the Federal bankruptcy laws as now or hereafter in effect or

seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,

winding up, liquidation, reorganization, arrangement, adjustment or composition

of it or its debts under any law relating to bankruptcy, insolvency or

reorganization or relief of debtors or fail to file an answer or other pleading

denying the material allegations of any such proceeding filed against it, (v)

take any corporate or partnership action to authorize or effect any of the

foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good

faith any appointment or proceeding described in Section 7.7.

 

Section 7.7.            Without

the application, approval or consent of the Borrower or any of its

Subsidiaries, a receiver, trustee, examiner, liquidator or similar official

shall be appointed for the Borrower or any of its Subsidiaries or any

Substantial Portion of its Property, or a proceeding described in Section

7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and

 

48

 

such appointment

continues undischarged or such proceeding continues undismissed or unstayed for

a period of 60 consecutive days.

 

Section 7.8.            Any

court, government or governmental agency shall condemn, seize or otherwise

appropriate, or take custody or control of, all or any portion of the Property

of the Borrower or any of its Subsidiaries which, when taken together with all

other Property of the Borrower or any of its Subsidiaries which has been so

condemned, seized, appropriated, or taken into custody or under control, during

the twelve-month period ending with the month in which any such action occurs,

constitutes a Substantial Portion, except pursuant to the legal order of the

U.S. government in time of war.

 

Section 7.9.            One

or more (i) judgments or orders for the payment of money in an aggregate amount

in excess of $2,000,000 (or the equivalent thereof in currencies other than

U.S. Dollars), or (ii) nonmonetary judgments or orders which, individually or

in the aggregate, could reasonably be expected to have a Material Adverse

Effect, are entered against Borrower or any of its Subsidiaries, which judgment(s),

in any such case, is/are not (i) stayed on appeal, (ii) otherwise being

appropriately contested in good faith, or (iii) paid, bonded or otherwise

discharged (including, without limitation, as a result of any insurance

settlement or payment) within forty-five (45) days after entry thereof.

 

Section 7.10.          The

Unfunded Liabilities of all Single Employer Plans shall in the aggregate exceed

$100,000 or any Reportable Event shall occur in connection with any Plan.

 

Section 7.11.          The

Borrower or any other member of the Controlled Group shall have been notified

by the sponsor of a Multiemployer Plan that it has incurred withdrawal

liability to such Multiemployer Plan in an amount which, when aggregated with

all other amounts required to be paid to Multiemployer Plans by the Borrower or

any other member of the Controlled Group as withdrawal liability (determined as

of the date of such notification), exceeds $100,000 or requires payments

exceeding $100,000 per annum.

 

Section 7.12.          The

Borrower or any other member of the Controlled Group shall have been notified

by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in

reorganization or is being terminated, within the meaning of Title IV of ERISA,

if as a result of such reorganization or termination the aggregate annual

contributions of the Borrower and the other members of the Controlled Group

(taken as a whole) to all Multiemployer Plans which are then in reorganization

or being terminated have been or will be increased over the amounts contributed

to such Multiemployer Plans for the respective plan years of each such

Multiemployer Plan immediately preceding the plan year in which the

reorganization or termination occurs by an amount exceeding $100,000.

 

Section 7.13.          The

Borrower or any of its Subsidiaries shall violate any Environmental Law, which

violation could reasonably be expected to have a Material Adverse Effect.

 

Section 7.14.          Any

Change in Control shall occur.

 

49

 

Section 7.15.          The

occurrence of any “default”, as defined in any Loan Document (other than this

Agreement) or the breach of any of the terms or provisions of any Loan Document

(other than this Agreement), which default or breach continues beyond any

period of grace or cure therein provided, and which could reasonably be

expected to have a Material Adverse Effect.

 

Section 7.16.          Any

Guaranty shall fail to remain in full force or effect or any action shall be

taken to discontinue or to assert the invalidity or unenforceability of any

Guaranty, or any Guarantor shall fail to comply with any of the terms or

provisions of any Guaranty to which it is a party, or any Guarantor shall deny

that it has any further liability under any Guaranty to which it is a party, or

shall give notice to such effect.

 

ARTICLE

VIII

 

Acceleration,

Waivers And Remedies

 

Section 8.1.            Acceleration.

 

(i)            If

any Default described in Section 7.6 or 7.7 occurs with respect to the

Borrower, the obligations of the Lenders to make Loans hereunder, and the

obligation and power of the LC Issuer to issue Facility LCs, shall

automatically terminate and the Obligations shall immediately become due and

payable and Borrower shall be and become unconditionally obligated to pay the

same without any election or action on the part of the Administrative Agent,

the LC Issuer or any Lender.  If any

other Default occurs, the Required Lenders (or the Administrative Agent with

the consent of the Required Lenders) may terminate or suspend the obligations

of the Lenders to make Loans hereunder and the obligation of the LC Issuer to

issue Facility LCs, or declare the Obligations to be due and payable, or both,

whereupon the Obligations shall become immediately due and payable, without

presentment, demand, protest or notice of any kind, all of which the Borrower

hereby expressly waives.

 

(ii)           If,

within 30 days after acceleration of the maturity of the Obligations or

termination of the obligations of the Lenders to make Loans, and the obligation

and power of the LC Issuer to issue Facility LCs, as a result of any Default

(other than any Default as described in Section 7.6 or 7.7 with respect to the

Borrower) and before any judgment or decree for the payment of the Obligations

due shall have been obtained or entered, the Required Lenders (in their sole

discretion) shall so direct, the Administrative Agent shall, by notice to the

Borrower, rescind and cancel such acceleration and/or termination.

 

Section 8.2.            Preservation of Rights.  No delay or omission of the Lenders, the LC

Issuer, the Swingline Lender or the Administrative Agent to exercise any right

under the Loan Documents shall impair such right or be construed to be a waiver

of any Default or an acquiescence therein, and the making of a Credit Extension

notwithstanding the existence of a Default or the inability of the Borrower to

satisfy the conditions precedent to such Credit Extension shall not constitute

any waiver or acquiescence.  Any single

or partial exercise of any such right shall not preclude any other or further

exercise thereof or the exercise of any other

 

50

 

right, and no

waiver, amendment or other variation of the terms, conditions or provisions of

the Loan Documents whatsoever shall be valid unless in writing signed by the Lenders

required pursuant to Section 12.13, and then only to the extent in such writing

specifically set forth.  All remedies

contained in the Loan Documents or by law afforded shall be cumulative and all

shall be available to the Administrative Agent, the LC Issuer, the Swingline

Lender and the Lenders until the Obligations have been paid in full.

 

ARTICLE IX

 

The

Administrative Agent

 

Section 9.1.            Appointment; Nature of

Relationship.  HNB is hereby

appointed by each of the Lenders as its contractual representative (herein

referred to as the “Administrative Agent”) hereunder and under each other Loan

Document, and each of the Lenders irrevocably authorizes the Administrative

Agent to act as the contractual representative of such Lender with the rights

and duties expressly set forth herein and in the other Loan Documents.  The Administrative Agent agrees to act as

such contractual representative upon the express conditions contained in this

Article IX.  Notwithstanding the use of

the defined term “Administrative Agent,” it is expressly understood and agreed

that the Administrative Agent shall not have any fiduciary responsibilities to

any Lender by reason of this Agreement or any other Loan Document and that the

Administrative Agent is merely acting as the contractual representative of the

Lenders with only those duties as are expressly set forth in this Agreement and

the other Loan Documents.  In its

capacity as the Lenders’ contractual representative, the Administrative Agent

(i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is

a “representative” of the Lenders within the meaning of the Uniform Commercial

Code and (iii) is acting as an independent contractor, the rights and duties of

which are limited to those expressly set forth in this Agreement and the other

Loan Documents.  Each of the Lenders

hereby agrees to assert no claim against the Administrative Agent on any agency

theory or any other theory of liability for breach of fiduciary duty, all of

which claims each Lender hereby waives.

 

Section 9.2.            Powers.  The Administrative Agent shall have and may

exercise such powers under the Loan Documents as are specifically delegated to

the Administrative Agent by the terms of each thereof, together with such

powers as are reasonably incidental thereto. 

The Administrative Agent shall have no implied duties to the Lenders, or

any obligation to the Lenders to take any action thereunder except any action

specifically provided by the Loan Documents to be taken by the Administrative

Agent.

 

Section 9.3.            General Immunity.  Neither the Administrative Agent nor any of

its directors, officers, agents or employees shall be liable to the Borrower or

any Lender for any action taken or omitted to be taken by it or them hereunder

or under any other Loan Document or in connection herewith or therewith except

to the extent such action or inaction is determined in a final non-appealable

judgment by a court of competent jurisdiction to have arisen from the gross

negligence or willful misconduct of such Person.

 

Section 9.4.            No Responsibility for Loans,

Recitals, etc.  Neither the

Administrative Agent nor any of its directors, officers, agents or employees

shall be responsible for or have any

 

51

 

duty to ascertain,

inquire into, or verify (a) any statement, warranty or representation made in

connection with any Loan Document or any borrowing hereunder; (b) the

performance or observance of any of the covenants or agreements of any obligor

under any Loan Document, including any agreement by an obligor to furnish

information directly to each Lender; (c) the satisfaction of any condition

specified in Article IV, except receipt of items required to be delivered

solely to the Administrative Agent; (d) the existence or possible existence of

any Default or Unmatured Default; (e) the validity, enforceability,

effectiveness, sufficiency or genuineness of any Loan Document or any other

instrument or writing furnished in connection therewith; (f) the value,

sufficiency, creation, perfection or priority of any Lien in any collateral

security; or (g) the financial condition of the Borrower or any guarantor, if

any, of any of the Obligations or of any of the Borrower’s or any such

guarantor’s respective Subsidiaries. 

The Administrative Agent shall have no duty to disclose to the Lenders

information that is not required to be furnished by the Borrower to the

Administrative Agent at such time, but is voluntarily furnished by the Borrower

to the Administrative Agent (either in its capacity as Administrative Agent or

in its individual capacity).

 

Section 9.5.            Action on Instructions of Lenders.  The Administrative Agent shall in all cases

be fully protected in acting, or in refraining from acting, hereunder and under

any other Loan Document in accordance with written instructions signed by the

Required Lenders, and such instructions and any action taken or failure to act

pursuant thereto shall be binding on all of the Lenders.  The Lenders hereby acknowledge that the

Administrative Agent shall be under no duty to take any discretionary action

permitted to be taken by it pursuant to the provisions of this Agreement or any

other Loan Document unless it shall be requested in writing to do so by the

Required Lenders.  The Administrative

Agent shall be fully justified in failing or refusing to take any action

hereunder and under any other Loan Document unless it shall first be

indemnified to its satisfaction by the Lenders pro rata against any and all

liability, cost and expense that it may incur by reason of taking or continuing

to take any such action.

 

Section 9.6.            Employment of Agents and Counsel.  The Administrative Agent may execute any of

its duties as Administrative Agent hereunder and under any other Loan Document

by or through employees, agents, and attorneys-in-fact and shall not be

answerable to the Lenders, except as to money or securities received by it or

its authorized agents, for the default or misconduct of any such agents or

attorneys-in-fact selected by it with reasonable care.  The Administrative Agent shall be entitled to

advice of counsel concerning the contractual arrangement between the

Administrative Agent and the Lenders and all matters pertaining to the

Administrative Agent’s duties hereunder and under any other Loan Document.

 

Section 9.7.            Reliance on Documents; Counsel.  The Administrative Agent shall be entitled

to rely upon any Note, notice, consent, certificate, affidavit, letter,

telegram, statement, paper or document believed by it to be genuine and correct

and to have been signed or sent by the proper Person or Persons, and, in

respect to legal matters, upon the opinion of counsel selected by the

Administrative Agent, which counsel may be employees of the Administrative

Agent.

 

Section 9.8.            Administrative Agent’s Reimbursement

and Indemnification.  The Lenders

agree to reimburse and indemnify the Administrative Agent ratably in proportion

to their respective Commitments (or, if the Commitments have been terminated,

in proportion to their

 

52

 

Commitments

immediately prior to such termination) (i) for any amounts not reimbursed by

the Borrower for which the Administrative Agent is entitled to reimbursement by

the Borrower under the Loan Documents, (ii) for any other reasonable and

properly documented expenses incurred by the Administrative Agent on behalf of

the Lenders, in connection with the preparation, execution, delivery,

administration and enforcement of the Loan Documents (including for any

reasonable and properly documented expenses incurred by the Administrative

Agent in connection with any dispute between the Administrative Agent and any

Lender or between two or more of the Lenders) and (iii) for any liabilities,

obligations, losses, damages, penalties, actions, judgments, suits, costs,

expenses or disbursements of any kind and nature whatsoever which may be

imposed on, incurred by or asserted against the Administrative Agent in any way

relating to or arising out of the Loan Documents or any other document delivered

in connection therewith or the transactions contemplated thereby (including for

any such amounts incurred by or asserted against the Administrative Agent in

connection with any dispute between the Administrative Agent and any Lender or

between two or more of the Lenders), or the enforcement of any of the terms of

the Loan Documents or of any such other documents, provided that (i) no Lender

shall be liable for any of the foregoing to the extent any of the foregoing is

found in a final non-appealable judgment by a court of competent jurisdiction

to have resulted from the gross negligence or willful misconduct of the

Administrative Agent and (ii) any indemnification required pursuant to Section

3.5(v) shall, notwithstanding the provisions of this Section 9.8, be paid by

the relevant Lender in accordance with the provisions thereof.  The obligations of the Lenders under this

Section 9.8 shall survive payment of the Obligations and termination of this

Agreement.

 

Section 9.9.            Notice of Default.  The Administrative Agent shall not be deemed

to have knowledge or notice of the occurrence of any Default or Unmatured

Default hereunder unless the Administrative Agent has received written notice

from a Lender or the Borrower referring to this Agreement describing such

Default or Unmatured Default and stating that such notice is a “notice of

default”.  In the event that the

Administrative Agent receives such a notice, the Administrative Agent shall

give prompt notice thereof to the Lenders.

 

Section 9.10.          Rights as a Lender.  In the event the Administrative Agent is a

Lender, the Administrative Agent shall have the same rights and powers

hereunder and under any other Loan Document with respect to its Commitment and

its Loans as any Lender and may exercise the same as though it were not the

Administrative Agent, and the term “Lender” or “Lenders” shall, at any time

when the Administrative Agent is a Lender, unless the context otherwise

indicates, include the Administrative Agent in its individual capacity.  The Administrative Agent and its Affiliates

may accept deposits from, lend money to, and generally engage in any kind of

trust, debt, equity or other transaction, in addition to those contemplated by

this Agreement or any other Loan Document, with the Borrower or any of its

Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby

from engaging with any other Person.

 

Section 9.11.          Lender Credit Decision.  Each Lender acknowledges that it has,

independently and without reliance upon the Administrative Agent, the Arranger

or any other Lender and based on the financial statements prepared by the

Borrower and such other documents and information as it has deemed appropriate,

made its own credit analysis and decision to enter into this Agreement and the other

Loan Documents.  Each Lender also

 

53

 

acknowledges that

it will, independently and without reliance upon the Administrative Agent, the

Arranger or any other Lender and based on such documents and information as it

shall deem appropriate at the time, continue to make its own credit decisions

in taking or not taking action under this Agreement and the other Loan

Documents.

 

Section 9.12.          Successor Administrative Agent.  The Administrative Agent may resign at any

time by giving written notice thereof to the Lenders and the Borrower, such

resignation to be effective upon the appointment of a successor Administrative

Agent or, if no successor Administrative Agent has been appointed, forty-five

days after the retiring Administrative Agent gives notice of its intention to

resign.  The Administrative Agent may be

removed at any time with or without cause by written notice received by the

Administrative Agent from the Required Lenders, such removal to be effective on

the date specified by the Required Lenders. 

Upon any such resignation or removal, the Required Lenders shall have

the right to appoint, on behalf of the Borrower and the Lenders, a successor

Administrative Agent, which appointment shall be subject to the consent of

Borrower as long as no Default has occurred and is continuing at the time of

such appointment.  If no successor

Administrative Agent shall have been so appointed by the Required Lenders

within thirty days after the resigning Administrative Agent’s giving notice of

its intention to resign, then the resigning Administrative Agent may appoint,

on behalf of the Borrower and the Lenders, a successor Administrative

Agent.  Notwithstanding the previous

sentence, the Administrative Agent may at any time without the consent of the

Borrower or any Lender, appoint any of its Affiliates which is a commercial

bank as a successor Administrative Agent hereunder.  If the Administrative Agent has resigned or been removed and no

successor Administrative Agent has been appointed, the Lenders may perform all

the duties of the Administrative Agent hereunder and the Borrower shall make

all payments in respect of the Obligations to the applicable Lender and for all

other purposes shall deal directly with the Lenders.  No successor Administrative Agent shall be deemed to be appointed

hereunder until such successor Administrative Agent has accepted the

appointment.  Any such successor Administrative

Agent shall be a commercial bank having capital and retained earnings of at

least $500,000,000.  Upon the acceptance

of any appointment as Administrative Agent hereunder by a successor

Administrative Agent, such successor Administrative Agent shall thereupon

succeed to and become vested with all the rights, powers, privileges and duties

of the resigning or removed Administrative Agent.  Upon the effectiveness of the resignation or removal of the

Administrative Agent, the resigning or removed Administrative Agent shall be

discharged from its duties and obligations hereunder and under the Loan

Documents.  After the effectiveness of

the resignation or removal of an Administrative Agent, the provisions of this

Article IX shall continue in effect for the benefit of such Administrative

Agent in respect of any actions taken or omitted to be taken by it while it was

acting as the Administrative Agent hereunder and under the other Loan

Documents.  In the event that there is a

successor to the Administrative Agent by merger, or the Administrative Agent

assigns its duties and obligations to an Affiliate pursuant to this Section

9.12, then the term “Prime Rate” as used in this Agreement shall mean the prime

rate, base rate or other analogous rate of the new Administrative Agent.

 

Section 9.13.          Delegation to Affiliates.  The Borrower and the Lenders agree that the

Administrative Agent may delegate any of its duties under this Agreement to any

of its Affiliates.  Any such Affiliate

(and such Affiliate’s directors, officers, agents and employees) which performs

duties in connection with this Agreement shall be entitled to the same benefits

of the

 

54

 

indemnification, waiver and other protective provisions to which the

Administrative Agent is entitled under Articles IX and XII.

 

ARTICLE X

 

Setoff; Ratable Payments

 

Section 10.1.          Setoff.  In addition to, and without limitation of,

any rights of the Lenders under applicable law, if the Borrower becomes

insolvent, however evidenced, or any Default occurs, any and all deposits

(including all account balances, whether provisional or final and whether or

not collected or available) and any other Indebtedness at any time held or

owing by any Lender or any Affiliate of any Lender to or for the credit or

account of the Borrower may be offset and applied toward the payment of the

Obligations owing to such Lender, whether or not the Obligations, or any part

hereof, shall then be due.

 

Section 10.2.          Ratable

Payments.  If any Lender, whether by

setoff or otherwise, has payment made to it upon its Outstanding Credit

Exposure (other than payments received pursuant to Section 3.1, 3.2, 3.4 or

3.5) in a greater proportion than that received by any other Lender, such

Lender agrees, promptly upon demand, to purchase a portion of the Aggregate

Outstanding Credit Exposure held by the other Lenders so that after such

purchase each Lender will hold its Applicable Percentage of the Aggregate

Outstanding Credit Exposure.  If any

Lender, whether in connection with setoff or amounts which might be subject to

setoff or otherwise, receives collateral or other protection for its

Obligations or such amounts which may be subject to setoff, such Lender agrees,

promptly upon demand, to take such action necessary such that all Lenders share

in the benefits of such collateral ratably in proportion to their respective

Applicable Percentages of the Aggregate Outstanding Credit Exposure.  In case any such payment is disturbed by

legal process, or otherwise, appropriate further adjustments shall be made.

 

ARTICLE

XI

 

Benefit

Of Agreement; Assignments; Participations

 

Section 11.1.          Successors

and Assigns.  The terms and

provisions of the Loan Documents shall be binding upon and inure to the benefit

of the Borrower and the Lenders and their respective successors and assigns,

except that (i) the Borrower shall not have the right to assign its rights or

obligations under the Loan Documents and (ii) any assignment by any Lender must

be made in compliance with Section 11.3. 

The parties to this Agreement acknowledge that clause (ii) of this

Section 11.1 relates only to absolute assignments and does not prohibit

assignments creating security interests, including any pledge or assignment by

any Lender of all or any portion of its rights under this Agreement and any

Note to a Federal Reserve Bank; provided, however, that no such pledge or

assignment creating a security interest shall release the transferor Lender

from its obligations hereunder unless and until the parties thereto have

complied with the provisions of Section 11.3. 

The Administrative Agent may treat the Person which made any Loan or

which holds any Note as the owner thereof for all purposes hereof unless and

until such Person complies with Section 11.3; provided, however, that the

Administrative Agent may in its discretion (but shall not be required to)

follow instructions from

 

55

 

the Person which made any Loan or which holds any Note to direct

payments relating to such Loan or Note to another Person.  Any assignee of the rights to any Loan or

any Note agrees by acceptance of such assignment to be bound by all the terms

and provisions of the Loan Documents. 

Any request, authority or consent of any Person, who at the time of

making such request or giving such authority or consent is the owner of the

rights to any Loan (whether or not a Note has been issued in evidence thereof),

shall be conclusive and binding on any subsequent holder or assignee of the

rights to such Loan.

 

Section 11.2.          Participations.

 

11.2.1.  Permitted Participants; Effect.  Any Lender may, in the ordinary course of

its business and in accordance with applicable law, at any time sell to one or

more banks or other entities (“Participants”) participating interests in any

Outstanding Credit Exposure of such Lender, any Note held by such Lender, any

Commitment of such Lender or any other interest of such Lender under the Loan

Documents.  In the event of any such

sale by a Lender of participating interests to a Participant, such Lender’s obligations

under the Loan Documents shall remain unchanged, such Lender shall remain

solely responsible to the other parties hereto for the performance of such

obligations, such Lender shall remain the owner of its Outstanding Credit

Exposure and the holder of any Note issued to it in evidence thereof for all

purposes under the Loan Documents, all amounts payable by the Borrower under

this Agreement shall be determined as if such Lender had not sold such

participating interests, and the Borrower and the Administrative Agent shall

continue to deal solely and directly with such Lender in connection with such

Lender’s rights and obligations under the Loan Documents.

 

11.2.2.  Voting Rights.  Each Lender shall retain the sole right to

approve, without the consent of any Participant, any amendment, modification or

waiver of any provision of the Loan Documents other than any amendment,

modification or waiver with respect to any Credit Extension or Commitment in

which such Participant has an interest which forgives principal, interest,

fees, or any Reimbursement Obligation, or reduces the interest rate or fees

payable with respect to any such Credit Extension or Commitment, extends the

Facility Termination Date, or postpones any date fixed for any

regularly-scheduled payment of principal of or interest on any Loan in which

such Participant has an interest, or any regularly-scheduled payment of fees on

any such Credit Extension or Commitment.

 

11.2.3.  Benefit of Setoff.  The Borrower agrees that each Participant

shall be deemed to have the right of setoff provided in Section 10.1 in respect

of its participating interest in amounts owing under the Loan Documents to the

same extent as if the amount of its participating interest were owing directly

to it as a Lender under the Loan Documents, provided that each Lender shall retain the

right of setoff provided in Section 10.1 with respect to the amount of

participating interests sold to each Participant.  The Lenders agree to share with each Participant, and each

Participant, by exercising the right of setoff provided in Section 10.1, agrees

to share with each Lender, any amount received pursuant to the exercise of its

right of setoff, such amounts to be shared in accordance with Section 10.2 as

if each Participant were a Lender.

 

56

 

Section 11.3.          Assignments

 

Section 11.3.1.  Permitted Assignments.  Any Lender may, in the ordinary course of

its business and in accordance with applicable law, at any time assign to one

or more banks or other entities (“Purchasers”) all or any part of its rights

and obligations under the Loan Documents. 

Such assignment shall be substantially in the form of Exhibit C or in

such other form as may be agreed to by the parties hereto.  The consent of the Borrower and the

Administrative Agent shall be required prior to an assignment becoming

effective with respect to a Purchaser which is not a Lender or an Affiliate

thereof; provided,

however, that if a Default has occurred and is continuing, the

consent of the Borrower shall not be required. 

Such consent shall not be unreasonably withheld or delayed.  Each such assignment with respect to a

Purchaser which is not a Lender or an Affiliate thereof shall (unless each of

the Borrower and the Administrative Agent otherwise consents) be in an amount

not less than the lesser of (i) $5,000,000 or (ii) the remaining amount of the

assigning Lender’s Revolving Commitment (calculated as at the date of such

assignment) or Outstanding Credit Exposure (as applicable).

 

Section 11.3.2.  Effect; Effective Date.  Upon (i) delivery to the Administrative

Agent of a notice of assignment, substantially in the form attached as Exhibit

I to Exhibit C (a “Notice of Assignment”), together with any consents required

by Section 11.3.1, and (ii) payment of a $3,500  fee to the Administrative

Agent for processing such assignment, such assignment shall become effective on

the effective date specified in such Notice of Assignment.  The Notice of Assignment shall contain a

representation by the Purchaser to the effect that none of the consideration

used to make the purchase of the Lender’s Revolving Commitment and/or

Outstanding Credit Exposure under the applicable assignment agreement are “plan

assets” as defined under ERISA and that the rights and interests of the

Purchaser in and under the Loan Documents will not be “plan assets” under

ERISA.  On and after the effective date

of such assignment, such Purchaser shall for all purposes be a Lender party to

this Agreement and any other Loan Document executed by or on behalf of the Lenders

and shall have all the rights and obligations of a Lender under the Loan

Documents, to the same extent as if it were an original party hereto, and no

further consent or action by the Borrower, the Lenders or the Administrative

Agent shall be required to release the transferor Lender with respect to the

Lender’s Revolving Commitment and/or Outstanding Credit Exposure assigned to

such Purchaser.  Upon the consummation

of any assignment to a Purchaser pursuant to this Section 11.3.2, the

transferor Lender, the Administrative Agent and the Borrower shall, if the

transferor Lender or the Purchaser desires that its Loans be evidenced by

Notes, make appropriate arrangements so that new Notes or, as appropriate,

replacement Notes are issued to such transferor Lender and new Notes or, as

appropriate, replacement Notes, are issued to such Purchaser, in each case in

principal amounts reflecting their respective Revolving Commitment, Outstanding

Revolving Credit Exposure, and/or aggregate outstanding Term Loan, as

applicable, as adjusted pursuant to such assignment.

 

Section 11.4.  Dissemination

of Information.  The Borrower

authorizes each Lender to disclose to any Participant or Purchaser or any other

Person acquiring an interest in the Loan

 

57

 

Documents by operation of law (each a “Transferee”) and any prospective

Transferee, provided that prior written notice of any such disclosure from any

Lender or the Administrative Agent to Borrower is made, any and all information

in such Lender’s possession concerning the creditworthiness of the Borrower and

its Subsidiaries, including any information contained in any Reports; provided

that each Transferee and prospective Transferee agrees to be bound by Section

12.10 of this Agreement.

 

ARTICLE XII

 

General Provisions

 

Section 12.1.          Survival of Representations.  All representations and warranties of the

Borrower contained in this Agreement shall survive the making of the Credit

Extensions herein contemplated.

 

Section 12.2.          Governmental Regulation.  Anything contained in this Agreement to the

contrary notwithstanding, neither the Swingline Lender, the LC Issuer, nor any

Lender shall be obligated to extend credit to the Borrower in violation of any

limitation or prohibition provided by any applicable statute or regulation.

 

Section 12.3.          Headings.  Section headings in the Loan Documents are

for convenience of reference only, and shall not govern the interpretation of

any of the provisions of the Loan Documents.

 

Section 12.4.          Entire Agreement.  The Loan Documents embody the entire

agreement and understanding among the Borrower, the Administrative Agent, the

LC Issuer, the Swingline Lender and the Lenders and supersede all prior

agreements and understandings among the Borrower, the Administrative Agent, the

LC Issuer, the Swingline Lender and the Lenders relating to the subject matter

thereof other than the letter agreement described in Section 4.1(b).

 

Section 12.5.          Several Obligations; Benefits of

this Agreement.  The respective

obligations of the Lenders hereunder are several and not joint and no Lender

shall be the partner or agent of any other (except to the extent to which the

Administrative Agent is authorized to act as such).  The failure of any Lender to perform any of its obligations

hereunder shall not relieve any other Lender from any of its obligations

hereunder.  This Agreement shall not be

construed so as to confer any right or benefit upon any Person other than the

parties to this Agreement and their respective successors and assigns, provided,

however, that the parties hereto expressly agree that the Arranger

shall enjoy the benefits of the provisions of Sections 9.11, 12.6 and 12.9 to

the extent specifically set forth therein and shall have the right to enforce

such provisions on its own behalf and in its own name to the same extent as if

it were a party to this Agreement.

 

Section 12.6.          Expenses; Indemnification.

 

(i)            The

Borrower shall reimburse the Administrative Agent and the Arranger for any

reasonable and properly documented costs, internal charges and out-of-pocket

expenses (including reasonable attorneys’ fees and time charges of attorneys

for the Administrative Agent or the Arranger, which attorneys may be employees

of the Administrative Agent

 

58

 

or the Arranger) paid or incurred by the Administrative Agent or the

Arranger in connection with the preparation, negotiation, execution, delivery,

syndication, review, amendment, modification, and administration of the Loan

Documents.  The Borrower also agrees to

reimburse the Administrative Agent, the Arranger, the LC Issuer, the Swingline

Lender and the Lenders for any reasonable and properly documented costs,

internal charges and out-of-pocket expenses (including reasonable attorneys’

fees and time charges of attorneys for the Administrative Agent, the Arranger,

the LC Issuer, the Swingline Lender and the Lenders, which attorneys may be

employees of the Administrative Agent, the Arranger, the LC Issuer, the Swingline

Lender or the Lenders) paid or incurred by the Administrative Agent, the

Arranger, the LC Issuer, the Swingline Lender or any Lender in connection with

the collection and enforcement of the Loan Documents.  The Borrower acknowledges that from time to time HNB may prepare

and may distribute to the Lenders (but shall have no obligation or duty to

prepare or to distribute to the Lenders) certain audit reports (the “Reports”)

pertaining to the Borrower’s assets for internal use by Administrative Agent

from information furnished to it by or on behalf of the Borrower, after

Administrative Agent has exercised its rights of inspection pursuant to this

Agreement.

 

(ii)           The

Borrower hereby further agrees to indemnify the Administrative Agent, the

Arranger, the LC Issuer, the Swingline Lender and each Lender, its directors,

officers, employees and agents against all losses, claims, damages, penalties,

judgments, liabilities and expenses (including all expenses of litigation or

preparation therefor whether or not the Administrative Agent, the Arranger, the

LC Issuer, the Swingline Lender or any Lender is a party thereto) which any of

them may pay or incur arising out of or relating to this Agreement, the other

Loan Documents, the transactions contemplated hereby or the direct or indirect

application or proposed application of the proceeds of any Credit Extension

hereunder except to the extent that they are determined in a Final Judgment

(defined below) to have resulted from the gross negligence or willful

misconduct of the party seeking indemnification. “Final Judgment” means a

judgment by a court of competent jurisdiction (i) which is non-appealable or

(ii) with respect to which the defendant-Administrative Agent, Arranger, LC

Issuer, Swingline Lender or Lender, as applicable, does not commence

proceedings to appeal within the applicable period(s) provided for by law.  The obligations of the Borrower under this

Section 12.6 shall survive the termination of this Agreement.

 

Section 12.7.          Numbers of Documents.  All statements, notices, closing documents,

and requests hereunder shall be furnished to the Administrative Agent with

sufficient counterparts so that the Administrative Agent may furnish one to

each of the Lenders.

 

Section 12.8.          Severability of Provisions.  Any provision in any Loan Document that is

held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as

to that jurisdiction, be inoperative, unenforceable, or invalid without

affecting the remaining provisions in that jurisdiction or the operation,

enforceability, or validity of that provision in any other jurisdiction, and to

this end the provisions of all Loan Documents are declared to be severable.

 

Section 12.9.          Nonliability of Lenders.  The relationship between the Borrower on the

one hand and the Lenders, the LC Issuer, the Swingline Lender and the

Administrative Agent on the other hand shall be solely that of borrower and

lender.  Neither the Administrative

Agent, the

 

59

 

Arranger, the LC Issuer, the Swingline Lender nor any Lender shall have

any fiduciary responsibilities to the Borrower.  Neither the Administrative Agent, the Arranger, the LC

Issuer,  the Swingline Lender nor any

Lender undertakes any responsibility to the Borrower to review or inform the

Borrower of any matter in connection with any phase of the Borrower’s business

or operations.  The Borrower agrees that

neither the Administrative Agent, the Arranger, the LC Issuer, the Swingline Lender

nor any Lender shall have liability to the Borrower (whether sounding in tort,

contract or otherwise) for losses suffered by the Borrower in connection with,

arising out of, or in any way related to, the transactions contemplated and the

relationship established by the Loan Documents, or any act, omission or event

occurring in connection therewith, unless it is determined in a Final Judgment

that such losses resulted from the gross negligence or willful misconduct of

the party from which recovery is sought.

 

Section 12.10.        Confidentiality.  Each Lender agrees, on behalf of itself and

its Affiliates to whom a disclosure is made, to hold any confidential

information which it may receive from the Borrower pursuant to this Agreement

in confidence, except for disclosure (i) to its Affiliates and to other Lenders

and their respective Affiliates, (ii) to legal counsel, accountants, and other

professional advisors to such Lender or to a Transferee, (iii) to regulatory

officials, (iv) to any Person as requested pursuant to or as required by law,

regulation, or legal process, (v) to any Person in connection with any legal

proceeding to which such Lender is a party, (vi) to such Lender’s direct or

indirect contractual counterparties in swap agreements or to legal counsel,

accountants and other professional advisors to such counterparties, and (vii)

permitted by Section 11.4.

 

Section 12.11.        Nonreliance.  Each Lender hereby represents that it is not

relying on or looking to any Margin Stock for the repayment of the Credit

Extensions provided for herein.

 

Section 12.12.        Disclosure.  The Borrower and each Lender hereby

acknowledge and agree that HNB and/or its Affiliates from time to time may hold

investments in, make other loans to or have other relationships with the

Borrower and its Affiliates.

 

Section 12.13.        Amendments.  Subject to the provisions of this Section

12.13, the Required Lenders (or the Administrative Agent with the consent in

writing of the Required Lenders) and the Borrower may enter into agreements

supplemental hereto for the purpose of adding or modifying any provisions to

the Loan Documents or changing in any manner the rights of the Lenders or the

Borrower hereunder or waiving any Default hereunder; provided, however, that no

such supplemental agreement shall, without the consent of all of the Lenders:

 

(i)            Extend the final maturity of any

Loan, or extend the expiration date of any Facility LC to a date after the

Facility Termination Date or postpone any regularly scheduled payment of

principal of any Loan or forgive all or any portion of the principal amount

thereof or any Reimbursement Obligation related thereto, or reduce the rate or

extend the time of payment of interest or fees thereon.

 

(ii)           Reduce the percentage specified in

the definition of Required Lenders.

 

60

 

(iii)          Extend the Facility Termination Date

or reduce the amount or extend the payment date for, the mandatory payments

required under Section 2.3, or increase (except as permitted pursuant to

Section 2.4) the amount of the Aggregate Revolving Commitment, the Revolving

Commitment or Term Commitment of any Lender hereunder, or permit the Borrower

to assign its rights under this Agreement.

 

(iv)          Amend this Section 12.13.

 

No amendment of any provision of this Agreement

relating to the Administrative Agent shall be effective without the written

consent of the Administrative Agent, and no amendment of any provision relating

to the LC Issuer or Swingline Lender shall be effective without the written

consent of the LC Issuer or Swingline Lender, as the case may be.  The Administrative Agent may waive payment

of the fee required under Section 11.3.2 without obtaining the consent of any

other party to this Agreement.

 

Section 12.14.        Notices.  Except as otherwise permitted by Section

2.14 with respect to Borrowing Notices, all notices, requests and other

communications to any party hereunder shall be in writing (including electronic

transmission, facsimile transmission or similar writing) and shall be given to

such party: (x) in the case of the Borrower or the Administrative Agent, at its

address or facsimile number set forth on the signature pages hereof, (y) in the

case of any Lender and the Swingline Lender and the LC Issuer, at its address

or facsimile number set forth below its signature hereto or (z) in the case of

any party, at such other address or facsimile number as such party may

hereafter specify for the purpose by notice to the Administrative Agent and the

Borrower in accordance with the provisions of this Section 12.14.  Each such notice, request or other

communication shall be effective (i) if given by facsimile transmission, when

transmitted to the facsimile number specified in this Section and confirmation

of receipt is received, (ii) if given by mail, 72 hours after such communication

is deposited in the mails with first class postage prepaid, addressed as

aforesaid, or (iii) if given by any other means, when delivered (or, in the

case of electronic transmission, received) at the address specified in this

Section; provided

that notices to the Administrative Agent under Article II shall not be

effective until received.

 

Section 12.15.        Change of Address.  The Borrower, the Administrative Agent, the

LC Issuer, the Swingline Lender and any Lender may each change the address for

service of notice upon it by a notice in writing to the other parties hereto.

 

Section 12.16.        Counterparts.  This Agreement may be executed in any number

of counterparts, all of which taken together shall constitute one agreement,

and any of the parties hereto may execute this Agreement by signing any such

counterpart.  This Agreement shall be

effective when it has been executed by the Borrower, the Administrative Agent,

the LC Issuer, the Swingline Lender and the Lenders and each party has notified

the Administrative Agent by facsimile transmission or telephone that it has

taken such action.

 

61

 

Section 12.17.        Choice Of Law.  The Loan Documents (other than those

containing a contrary express choice of law provision) shall be construed in

accordance with the internal laws (but without regard to the conflict of law

principles) of the State of Ohio, but giving effect to federal laws applicable

to national banks.

 

Section 12.18.        Consent To Jurisdiction.  The Borrower hereby irrevocably submits to

the non-exclusive jurisdiction of any United States federal or Ohio state court

sitting in Columbus, Ohio in any action or proceeding arising out of or

relating to any Loan Documents and the Borrower hereby irrevocably agrees that

all claims in respect of such action or proceeding may be heard and determined

in any such court and irrevocably waives any objection it may now or hereafter

have as to the venue of any such suit, action or proceeding brought in such a

court or that such court is an inconvenient forum.  Nothing herein shall limit the right of the Administrative Agent,

the LC Issuer, the Swingline Lender or any Lender to bring proceedings against

the Borrower in the courts of any other jurisdiction.  Any judicial proceeding by the Borrower against the

Administrative Agent, the LC Issuer, the Swingline Lender or any Lender or any

affiliate of the Administrative Agent, the LC Issuer, the Swingline Lender or

any Lender involving, directly or indirectly, any matter in any way arising out

of, related to, or connected with any Loan Document shall be brought only in a

court in Columbus, Ohio.

 

Section 12.19.        WAIVER OF JURY TRIAL.  THE BORROWER, THE ADMINISTRATIVE AGENT, THE

LC ISSUER, THE SWINGLINE LENDER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN

ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER

SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,

OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

 

Section 12.20.        Interest Rate Limitation.  Notwithstanding anything herein to the

contrary, if at any time the interest rate applicable to any Loan, together

with all fees, charges and other amounts that are treated as interest on such

Loan under applicable law (collectively, the “Charges”), shall exceed the

maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged,

taken, received or reserved by the Lender holding such Loan in accordance with

applicable law, the rate of interest payable in respect of such Loan hereunder,

together with all Charges payable in respect thereof, shall be limited to the

Maximum Rate and, to the extent lawful, the interest and Charges that would

have been payable in respect of such Loan but were not payable as a result of

the operation of this Section shall be cumulated and the interest and Charges

payable to such Lender in respect of other Loans or periods shall be increased

(but not above the Maximum Rate therefor) until such cumulated amount, together

with interest thereon at the Federal Funds Effective Rate to the date of

repayment, shall have been received by such Lender.

 

Section 12.21.        Warrant of Attorney.  The Borrower hereby irrevocably authorizes

any attorney-at-law, including any attorney-at-law employed or retained by the

Administrative Agent, the Swingline Lender, the LC Issuer or any Lender, to

appear for it in any action on this Agreement or any Note at any time after the

same becomes due as herein or therein provided in any court of record situated

in the county where this warrant was signed (being Franklin County,

 

62

 

Ohio), or in the county where the Borrower then resides or can be

found, to waive the issuing and service of process, and confess a judgment in

favor of the holder of this Agreement and any Note against the Borrower, for

the amount that may then be due, with interest at the rate(s) provided for

herein, together with the costs of suit, and to waive and release all errors in

said proceedings and the right to appeal from the judgment rendered.  The Borrower consents to the jurisdiction

and venue of such court.  The Borrower

waives any conflict of interest that any attorney-at-law employed or retained

by the Administrative Agent, the LC Issuer, the Swingline Lender or any Lender

may have in confessing judgment hereunder and consents to the payment of a

legal fee to any attorney-at-law confessing judgment hereunder.

 

IN WITNESS WHEREOF, the Borrower, the Lenders, the

Administrative Agent and the Swingline Lender the have executed this Agreement

as of the date first above written.

 

WARNING

—  BY SIGNING THIS PAPER YOU GIVE UP

YOUR RIGHT TO NOTICE AND COURT TRIAL. 

IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU

WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT

FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR

RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,

OR ANY OTHER CAUSE.

 

 

	

   

  	

  AIRNET SYSTEMS,

  INC

  
	

   

  	

     an

  Ohio corporation

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ William R.

  Sumser

  
	

   

  	

   

  
	

   

  	

  Title:

  	

  CFO

  
	

   

  	

   

  	

   

  
	

   

  	

  Address:

  	

    3939 International Gateway

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

    Columbus

  OH  43219

  
	

   

  	

   

  	

   

  
	

   

  	

  Attention:

  	

    William R.

  Sumser

  
	

   

  	

   

  	

   

  
	

   

  	

  Telephone:

  	

    (614)

  237-2057  

  
	

   

  	

   

  	

   

  
	

   

  	

  FAX:

  	

    (614)

  237-7876

  
					

 

63

 

Commitments

 

	

  Revolving Loans:

  	

  $15,909,091.00

  	

  THE HUNTINGTON NATIONAL BANK,

  
	

  Term Loans:

  	

  $9,090,909.00

  	

  as Administrative Agent, Lender

  
	

   

  	

   

  	

  Swingline Lender and LC Issuer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/

  	

  Nancy J. Cracolice

  
	

   

  	

   

  	

   

  	

  Nancy J. Cracolice

  
	

   

  	

   

  	

  Title:

  	

  Vice President

  
	

   

  	

   

  	

   

  	

  41 South High Street

  
	

   

  	

   

  	

   

  	

  Columbus, Ohio 43215

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Attention: 

  Nancy J. Cracolice, Vice President

  
	

   

  	

   

  	

   

  	

  telephone:

  	

  (614) 480-4401

  
	

   

  	

   

  	

   

  	

  FAX:

  	

  (614) 480-5791

  
							

 

64

 

	

  Revolving Loans:

  	

  $9,545,454.50

  	

  FIFTH THIRD BANK, as Lender

  
	

  Term Loans:

  	

  $5,454,545.50

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ Kim Dennis

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Title:

  	

  AVP Large Corporate

  
	

   

  	

   

  	

  Address:

  	

  21 East State Street

  
	

   

  	

   

  	

   

  	

  Columbus, OH 

  43215

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Attention:

  	

  Kim Dennis

  
	

   

  	

   

  	

   

  	

  Telephone:

  	

  (614) 341-2588

  
	

   

  	

   

  	

   

  	

  FAX:

  	

  (614) 341-2606

  
							

 

65

 

	

  Revolving Loans:

  	

  $9,545,454.50

  	

  BANK ONE, N.A., as Lender

  
	

  Term Loans:

  	

  $5,454,545.50

  	

   

  
	

   

  	

   

  	

  By: 

  	

  /s/ Warren Bebinger

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Title:

  	

  Vice President

  
	

   

  	

   

  	

  Address:

  	

  100 East Broad St.

  
	

   

  	

   

  	

   

  	

  Columbus, OH 

  43215

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Attention:

  	

  Warren Bebinger

  	

   

  
	

   

  	

   

  	

   

  	

  Telephone:

  	

  (614) 248-5319

  
	

   

  	

   

  	

   

  	

  FAX:

  	

  (614) 248-5518

  
								

 

66

 

PRICING SCHEDULE

 

	

  APPLICABLE

  MARGIN*

  	

   

  	

  LEVEL I STATUS

  	

   

  	

  LEVEL II

  STATUS

  	

   

  	

  LEVEL III STATUS

  
	

  Eurodollar

  Rate for Term Loans and Revolving Loans and LC Fee

  	

   

  	

  100 bps

  	

   

  	

  125 bps

  	

   

  	

  150 bps

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Floating

  Rate for Term Loans and Revolving Loans

  	

   

  	

  0 bps

  	

   

  	

  0 bps

  	

   

  	

  0 bps

  

 

	

  APPLICABLE

  FEE

  RATE*

  	

   

  	

  LEVEL I STATUS

  	

   

  	

  LEVEL II STATUS

  	

   

  	

  LEVEL III STATUS

  
	

  Commitment

  Fee

  	

   

  	

  25 bps

  	

   

  	

  25 bps

  	

   

  	

  30 bps

  

 

*In basis points

 

For the purposes of this Schedule, the following terms have the

following meanings, subject to the final paragraph of this Schedule:

 

“Financials” means the annual or quarterly financial

statements of the Borrower delivered pursuant to Section 6.1(i) or (ii).

 

“Level I Status” exists at any date if, as of the last

day of the fiscal quarter of the Borrower referred to in the most recent

Financials, the Leverage Ratio is less than 1.00 to 1.00.

 

“Level II Status” exists at any date if, as of the

last day of the fiscal quarter of the Borrower referred to in the most recent

Financials, (i) the Borrower has not qualified for Level I Status and (ii) the

Leverage Ratio is less than to 1.50 to 1.00.

 

“Level III Status” exists at any date if, as of the

last day of the fiscal quarter of the Borrower referred to in the most recent

Financials, (i) the Borrower has not qualified for Level I Status or Level II

Status and (ii) the Leverage Ratio is equal to or greater than 1.50 to 1.00.

 

“Status” means either Level I Status, Level II Status

or Level III Status.

 

The Applicable Margin and Applicable Fee Rate shall be

determined in accordance with the foregoing table based on the Borrower’s

Status as reflected in the then most recent Financials.  Adjustments, if any, to the Applicable

Margin or Applicable Fee Rate shall be effective five Business Days after the

Administrative Agent has received the applicable Financials.  If the Borrower fails to deliver the

Financials to the Administrative Agent at the time required pursuant to Section

6.1, then the Applicable Margin and Applicable Fee Rate shall be the highest

Applicable Margin and Applicable Fee Rate set forth in the foregoing table

until five days after such Financials are so delivered.

 

67

 

EXHIBIT A

FORM OF OPINION

 

 

September 30, 2002

 

The Administrative Agent, the LC Issuer,

  The Swingline Lender and the

Lenders

  Party to the Credit Agreement

referred to below

 

Re:               Credit Agreement

among AirNet Systems, Inc., the Lenders party thereto and The Huntington

National Bank, as Administrative Agent, LC Issuer, Swingline Lender and Lead

Arranger

 

Ladies and Gentlemen:

 

We have acted as counsel to AirNet Systems, Inc. (the

“Borrower”), an Ohio corporation, and to AirNet Management, Inc. (“AirNet

Management”), an Ohio corporation, Jetride, Inc. (“Jetride”), an

Ohio corporation, and Float Control, Inc. (“Float”), a Michigan

corporation (AirNet Management, Jetride and Float are referred to herein as the

“Guarantors” and, together with the Borrower, the “Obligors”), in

connection with the Credit Agreement of even date herewith (the “Credit

Agreement”) among the Borrower, the Lenders party thereto and The

Huntington National Bank, as Administrative Agent (the “Administrative Agent”),

and as LC Issuer, Swingline Lender and Lead Arranger.  This opinion is furnished to you pursuant to

Section 4.1(i)(d)  of the Credit Agreement.  Capitalized terms used in this opinion that

are defined in the Credit Agreement have the meanings set forth in the Credit

Agreement, unless otherwise defined herein. 

The Borrower, AirNet Management and Jetride are referred to herein as

the “Ohio Obligors”.

 

In connection with this opinion, we have examined

originals or certified, conformed or reproduction copies of, and have relied

upon the accuracy of, without independent verification or investigation, the

following:

 

(a)                                  the

Credit Agreement;

 

(b)                                 the

Notes;

 

(c)                                  the

Subsidiary Guaranty;

 

(d)                                 the

Facility LC Application;

 

(e)                                  the

Articles of Incorporation of each of the Ohio Obligors (as to each Obligor, the

“Articles of Incorporation” of such Ohio Obligor), each certified by the

Secretary of State of the State of Ohio and certified to us

 

 

by an officer of such Ohio Obligor as being complete

and in full force and effect as of the date of this opinion;

 

(f)                                    the

Code of Regulations of each of the Ohio Obligors (as to each Ohio Obligor, the

“Code of Regulations” of such Ohio Obligor), each certified to us by an

officer  of

such Ohio Obligor as being complete and in full force and effect as of the date

of this opinion;

 

(g)                                 certificates

of Good Standing as to each of the Ohio Obligors (as to each Ohio Obligor, the

“Good Standing Certificate” issued with respect to such Ohio Obligor”)

each certified by the Secretary of State of the State of Ohio;

 

(h)                                 the

agreements and instruments set forth on Annex 1 hereto to which certain of the

Obligors are party, which agreements and instruments, based solely on the Officer’s

Certificates (hereinafter defined), constitute all of the material agreements

of the Obligors (as to each Obligor, such agreements and instruments, the “Material

Agreements” to which such Obligor is a party); and

 

(i)                                     a

certificate of an officer of each of the Obligors as to certain factual matters

(as to each Obligor, the “Officers’ Certificate” of such Obligor).

 

We have also examined the

originals or certified, conformed or reproduction copies of, and have relied

upon the accuracy of, without independent verification or investigation, such

other records, agreements, instruments and documents as we have deemed

necessary or relevant as the basis for our opinion.  The documents referenced in clauses (a) through (d) above are

referred to herein as the “Loan Documents”.

 

In our examination, we

have assumed the genuineness of all signatures of parties to the Loan Documents

other than the Obligors, the authenticity of all documents submitted to us as

originals and the conformity with authentic original documents of all documents

submitted to us as copies.

 

In rendering the opinions

expressed below, we have assumed, with respect to all of the documents referred

to in this opinion letter (except, to the extent set forth in the opinions

expressed below, as to the Obligors), that such documents have been duly

authorized by, have been duly executed and delivered by, and constitute the

legal, valid, binding and enforceable obligations of, all of the parties to

such documents; all signatories to such documents have been duly authorized;

and all of the parties to such documents are duly organized and validly

existing and have the power and authority (corporate, limited liability

company, partnership or other) to execute, deliver and perform such documents.

 

Whenever our opinion with

respect to the existence or absence of facts is indicated to be based on our

knowledge, we are referring to the actual knowledge of the Vorys, Sater,

Seymour and Pease LLP attorneys who have represented the Obligors in connection

with the transactions

 

2

 

contemplated by the Loan

Documents, and who have represented the Obligors in connection with ongoing

legal matters generally; however, we call to your attention the fact Russell

Gertmenian, a partner of this firm, is a member of the board of directors of

the Borrower, and any matters known to him in his capacity as director but not

otherwise known to any other attorneys of this firm are not included within the

scope of “knowledge” otherwise described herein.  Except for the examinations and inquiries recited herein, we have

not undertaken any independent investigation to determine the existence or

absence of any facts, and no inference as to our knowledge concerning such

facts should be drawn.  Without limiting

the generality of the foregoing, we have made no examination of the character,

organization, activities or authority of any party other than the Obligors to

any of the Loan Documents which might have any effect upon our opinions expressed

herein, and we have neither examined, nor do we opine upon, any provision or

matter to the extent that the examination or opinion would require a financial,

mathematical or accounting calculation or determination.

 

As used herein, the

phrases “corporate power and authority” and “duly authorized by all necessary

corporate action” refer and are limited to the Ohio General Corporation Law

and, with respect to each Ohio Obligor, the Articles of Incorporation and the

Code of Regulations of such Ohio Obligor.

 

Based upon and subject to

the foregoing and having considered such questions of law as we have deemed

necessary, and the further qualifications and limitations set forth below, as

of the date hereof (or as of the date of any assumption made herein or any

certificate, schedule, exhibit or inquiry stated to have been examined, made,

or otherwise relied upon by us), we are of the opinion that:

 

1.             Each

Ohio Obligor is a corporation duly incorporated, validly existing and, based

solely on the Good Standing Certificate issued with respect to such Ohio

Obligor, in good standing under the laws of the State of Ohio.

 

2.             Each

Ohio Obligor has the corporate power and authority to execute, deliver and

perform each of the Loan Documents to which it is a party.

 

3.             The

execution, delivery and performance by each Ohio Obligor of the Loan Documents

to which it is a party have been duly authorized by all necessary corporate

action of such Ohio Obligor.

 

4.             The

execution and delivery by each Obligor of, the performance and incurrence by

each Obligor of its obligations and liabilities under, and the consummation by

each Obligor of the other transactions contemplated by, the Loan Documents to

which each such Obligor is a party do not and will not:

 

a.             as

to each Ohio Obligor, violate the Articles of Incorporation or Code of

Regulations of such Ohio

                Obligor;

 

b.             violate

any Material Agreement to which such Obligor is a party;

 

3

 

c.             to

our knowledge, violate any order, judgment, writ, injunction, decree, rule, or

regulation of any court or other governmental authority or instrumentality of

the State of Ohio applicable to such Obligor;

 

d.             violate

any law, rule or regulation of the State of Ohio applicable to such Obligor;

 

e.             as

to each Obligor, require any consent of such Obligor’s shareholders (other than

any such consent as has already been given and remains in full force and

effect); or

 

f.              result

in, or require, the creation or imposition of any lien in, of or on the

Property of the Obligors pursuant to the terms of any Material Agreement.

 

5.             Each

of the Loan Documents has been duly executed and delivered by each Obligor

party thereto, and the Loan Documents to which each is a party, constitutes the

legal, valid and binding obligation of such Obligor party thereto, enforceable

against such Obligor in accordance with its terms.

 

6.             To

our knowledge, and except as otherwise disclosed in the Credit Agreement, there

are no actions, suits or proceedings at law or in equity or by or before any

governmental authority or instrumentality now pending or threatened against any

Obligor or against any properties or rights of such Obligor which, if adversely

determined, could reasonably be expected to have a Material Adverse Effect.

 

7.             No

consent, approval, authorization or order of, and no filing or registration

with, any court or governmental agency or regulatory body of the State of Ohio

is required on the part of any Obligor for the execution or delivery by such

Obligor of, or the performance by such Obligor of its obligations under, the

Loan Documents to which it is a party.

 

The opinions expressed above are subject to the

following additional qualifications:

 

Our opinions expressed herein are based upon our

review of those laws and regulations that, in our experience, are applicable to

transactions of the type provided for in the Loan Documents, but without having

made any review of any other laws or regulations.

 

All of our opinions are subject to the limitations, if

any, of Title 11 U.S.C., as amended, and of the applicable insolvency,

reorganization, moratorium or other laws affecting the enforcement of

creditors’ rights generally and by principles of equity.  In addition, certain remedial and other

provisions of  the Loan Documents may be

limited by (a) implied covenants of good faith, fair dealing and commercially

reasonable conduct and (b) judicial discretion, in the instance of multiple or

equitable remedies.

 

We have not

conducted requisite factual or legal examinations, and accordingly we express

no opinion, with respect to the application, if any, of laws concerning or

promulgated by (a) environmental effects or agencies; (b) industries the

operations, financial affairs or profits of which are regulated by the United

States or the State of Ohio, to wit, banks and thrift institutions,

 

4

 

insurance and utilities under Ohio Revised

Code (“R.C.”) Title 49; (c) fraudulent dispositions or obligations (R.C.

Chapter 1336 and R.C. Section 1313.56); (d) securities laws; (e) restrictions

attendant to financings of property by public authorities, for example,

industrial revenue bond financings; (f) political subdivisions of the

State of Ohio; (g) any order of any court or other authority directed

specifically to any party to the Loan Documents of which we do not have

knowledge; or (h) any taxes or tax effects.

 

In addition, we express no opinion as to the

enforceability of rights, provisions or interests to the extent, if any,

dependent upon the enforceability of (a) waivers of rights or defenses of

debtors or others which may not be waived or which may be waived only under

certain circum­stances under applicable law; 

(b) provisions of the Loan Documents to the extent held to (i) require

the payment of interest on interest, (ii) compensate any party for loss or

expense in excess of actual loss or reasonable expenses or constitute a

penalty, (iii) require reimbursement for or indemnity against actions by the

Administrative Agent or the Lenders taken in violation of applicable law or

public policy, (iv) require indemnity or reimbursement by a person for

additional costs or expenses where the party reimbursed has incurred such

expense by reason in part of the effect of activities with others not party to

the Loan Documents and has assigned or allocated the burden of reimbursement

unreasonably or arbitrarily, (v) purport to waive or negate in favor of the

Administrative Agent or the Lenders the effect of notice of a default or event

of default, if any, which the Administrative Agent or the Lenders may have at

the time of closing, or (vi) include an acceleration clause and a prepayment

penalty or premium exercised with respect to the same obligation; (c) any

provision for the award of attorneys’ fees to an opposing party, except those

that are governed by the provisions of R.C. Section 1301.21, which became

effective May 1, 2000; (d) provisions which purport to choose venue and

jurisdiction; (e) provisions which purport to waive jury trial; (f) provisions

which purport to effect the alteration or termination of rights currently held

by third parties; (g) provisions which purport to establish evidentiary

standards; (h) disclaimers of liability, or liability limitations, with respect

to third parties; (i) releases of legal or equitable rights;

(j) provisions which purport to authorize execution of various documents

on behalf of another; (k) any remedies for (1) immaterial breaches or (2)

material breaches which are the proximate result of actions taken by the Administrative

Agent or the Lenders or their agents, which actions none of them is entitled to

take pursuant to the relevant agreements or instruments or applicable law or

which otherwise violate applicable laws; (l) powers of attorney; or (m)

provisions, if any, that are ambiguous or inconsistent within a Loan Document

or among the Loan Documents.

 

The opinions expressed herein are limited to the laws

of the State of Ohio and the federal laws of the United States of America

having effect on the date hereof, and we express no opinion as to the laws of

any other jurisdiction.  The opinions

expressed herein are furnished specifically in connection with the execution

and delivery of the Loan Documents for the benefit of the Administrative Agent,

the Swingline Lender, the LC Issuer and the Lenders and their respective

permitted assignees and participants pursuant to the terms of the Credit

Agreement, and may not be relied upon, assigned, quoted or otherwise used in

any manner or for any purpose by any other person or entity, without our

specific prior written consent.

 

Very truly yours,

 

 

VORYS, SATER, SEYMOUR AND

PEASE  LLP

 

5

 

EXHIBIT B

 

COMPLIANCE

CERTIFICATE

 

To:                              The

Lenders party to the

Credit Agreement Described Below

 

This Compliance Certificate is furnished pursuant to

that certain Credit Agreement dated as of [date] (as amended, modified, renewed

or extended from time to time, the “Agreement”) among AirNet Systems, Inc., an

Ohio corporation (the “Borrower”), the Lenders party thereto and The Huntington

National Bank, as Administrative Agent for the Lenders and as Swingline Lender

and as LC Issuer.  Unless otherwise

defined herein, capitalized terms used in this Compliance Certificate have the

meanings ascribed thereto in the Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.                                       I

am the duly elected

                          

of the Borrower;

 

2.             I

have reviewed the terms of the Agreement and I have made, or have caused to be

made under my supervision, a detailed review of the transactions and conditions

of the Borrower and its Subsidiaries during the accounting period covered by

the attached financial statements;

 

3.             The

examinations described in paragraph 2 did not disclose, and I have no knowledge

of, the existence of any condition or event which constitutes a Default or

Unmatured Default during or at the end of the accounting period covered by the

attached financial statements or as of the date of this Certificate, except as

set forth below; and

 

4.             Schedule

I attached hereto sets forth financial data and computations evidencing the

Borrower’s compliance with certain covenants of the Agreement, all of which

data and computations are true, complete and correct.

 

5              Schedule

II hereto sets forth the determination of the applicable margin on the interest

rates to be paid for Advances, the Applicable Fee Rate and the commitment fee

rates commencing on the fifth day following the delivery hereof.

 

6              Schedule

III attached hereto sets forth the various reports and deliveries which are

required at this time under the Credit Agreement and the other Loan Documents

and the status of compliance.

 

 

Described below are the exceptions, if any, to

paragraph 3 (list in detail, the nature of the condition or event, the period during

which it has existed and the action which the Borrower has taken, is taking, or

proposes to take with respect to each such condition or event):

 

	

   

  
	

   

  
	

   

  
	

   

  
	

   

  
	

   

  
	

   

  

 

The foregoing certifications, together with the

computations set forth in Schedule I and Schedule II hereto and the financial

statements delivered with this Certificate in support hereof, are made and

delivered this        day of

                 ,

              .

 

	

   

  	

   

  

 

2

 

SCHEDULE I TO COMPLIANCE CERTIFICATE

 

Compliance as of

              ,

         with Provisions of

      and

           of the Agreement

 

3

 

SCHEDULE II TO COMPLIANCE CERTIFICATE

 

Borrower’s Applicable Margin and Applicable Fee Rate

Calculation

 

4

 

SCHEDULE III TO COMPLIANCE CERTIFICATE

 

Reports and Deliveries Currently Due

 

5

 

EXHIBIT C

 

ASSIGNMENT

AGREEMENT

 

This Assignment Agreement (this “Assignment Agreement”) between

                                                                           

(the “Assignor”) and

                                                                       (the

“Assignee”) is dated as of                                 ,

200   .  The parties

hereto agree as follows:

 

1.             Preliminary

Statement.  The Assignor is a party

to a Credit Agreement (which, as it may be amended, modified, renewed or

extended from time to time is herein called the “Credit Agreement”) described

in Item 1 of Schedule 1 attached hereto (“Schedule 1”).  Capitalized terms used herein and not

otherwise defined herein shall have the meanings attributed to them in the

Credit Agreement.

 

2.             Assignment and

Assumption.  The Assignor hereby sells

and assigns to the Assignee, and the Assignee hereby purchases and assumes from

the Assignor, an interest in and to the Assignor’s rights and obligations under

the Credit Agreement and the other Loan Documents, such that after giving

effect to such assignment the Assignee shall have purchased pursuant to this

Assignment Agreement the percentage interest specified in Item 3 of Schedule 1

of all outstanding rights and obligations under the Credit Agreement and the

other Loan Documents relating to the facilities listed in Item 3 of Schedule

1.  The Revolving Commitment (or

Outstanding Credit Exposure, if the applicable Revolving Commitment has been

terminated), Outstanding Revolving Credit Exposure and/or aggregate outstanding

Term Loan purchased by the Assignee hereunder is set forth in Item 4 of

Schedule 1.

 

3.             Effective Date.  The effective date of this Assignment

Agreement (the “Effective Date”) shall be the later of the date specified in

Item 5 of Schedule 1 or two Business Days (or such shorter period agreed to by

the Administrative Agent) after this Assignment Agreement, together with any

consents required under the Credit Agreement, are delivered to the

Administrative Agent. In no event will the Effective Date occur if the payments

required to be made by the Assignee to the Assignor on the Effective Date are

not made on the proposed Effective Date.

 

4.             Payment

Obligations.  In consideration for

the sale and assignment hereunder, the Assignee shall pay the Assignor, on the

Effective Date, the amount agreed to by the Assignor and the Assignee.  On and after the Effective Date, the

Assignee shall be entitled to receive all payments of principal, interest,

Reimbursement Obligations and fees with respect to the interest assigned

hereby.  The Assignee will promptly

remit to the Assignor any interest on Loans and fees received from the

Administrative Agent which relate to the portion of the interest assigned to

the Assignee hereunder and not previously paid by the Assignee to the Assignor.  In the event that either party hereto

receives any payment to which the other party hereto is entitled under this

Assignment Agreement, then the party receiving such amount shall promptly remit

it to the other party hereto.

 

 

5.             Assignment Fee.  The Assignor and Assignee each agree to pay

one-half of the assignment fee required to be paid to the Administrative Agent

in connection with this Assignment Agreement unless otherwise specified in Item

6 of Schedule 1.

 

6.             Representations

of the Assignor; Limitations on the Assignor’s Liability.  The Assignor represents and warrants that

(i) it is the legal and beneficial owner of the interest being assigned by it

hereunder, (ii) such interest is free and clear of any adverse claim created by

the Assignor and (iii) the execution and delivery of this Assignment Agreement

by the Assignor is duly authorized.  It

is understood and agreed that the assignment and assumption hereunder are made

without recourse to the Assignor and that the Assignor makes no other

representation or warranty of any kind to the Assignee.  Neither the Assignor nor any of its

officers, directors, employees, agents or attorneys shall be responsible for

(i) the due execution, legality, validity, enforceability, genuineness, sufficiency

or collectibility of any Loan Document, (ii) any representation, warranty or

statement made in or in connection with any of the Loan Documents, (iii) the

financial condition or creditworthiness of the Borrower or any guarantor, (iv)

the performance of or compliance with any of the terms or provisions of any of

the Loan Documents, (v) inspecting any of the property, books or records of the

Borrower, or (vi) any mistake, error of judgment, or action taken or omitted to

be taken in connection with the Loans or the Loan Documents.

 

7.             Representations

and Undertakings of the Assignee. 

The Assignee (i) confirms that it has received a copy of the Credit

Agreement, together with copies of the financial statements requested by the

Assignee and such other documents and information as it has deemed appropriate

to make its own credit analysis and decision to enter into this Assignment

Agreement, (ii) agrees that it will, independently and without reliance upon

the Administrative Agent, the Assignor or any other Lender and based on such

documents and information at it shall deem appropriate at the time, continue to

make its own credit decisions in taking or not taking action under the Loan

Documents, (iii) appoints and authorizes the Administrative Agent to take such

action as agent on its behalf and to exercise such powers under the Loan

Documents as are delegated to the Administrative Agent by the terms thereof,

together with such powers as are reasonably incidental thereto, (iv) confirms

that the execution and delivery of this Assignment Agreement by the Assignee is

duly authorized, (v) agrees that it will perform in accordance with their terms

all of the obligations which by the terms of the Loan Documents are required to

be performed by it as a Lender, (vi) agrees that its payment instructions and notice

instructions are as set forth in the attachment to Schedule 1, (vii) confirms

that none of the funds, monies, assets or other consideration being used to

make the purchase and assumption hereunder are “plan assets” as defined under

ERISA and that its rights, benefits and interests in and under the Loan

Documents will not be “plan assets” under ERISA, (viii) agrees to indemnify and

hold the Assignor harmless against all losses, costs and expenses (including

reasonable attorneys’ fees) and liabilities incurred by the Assignor in

connection with or arising in any manner from the Assignee’s non-performance of

the obligations assumed under this Assignment Agreement, and (ix) if

applicable, attaches the forms prescribed by the Internal Revenue Service of the

United States certifying that the Assignee is entitled to receive payments

under the Loan Documents without deduction or withholding of any United States

federal income taxes.

 

2

 

8.             Governing Law.  This Assignment Agreement shall be governed

by the internal law, and not the law of conflicts, of the State of Ohio.

 

9.             Notices.  Notices shall be given under this Assignment

Agreement in the manner set forth in the Credit Agreement.  For the purpose hereof, the addresses of the

parties hereto (until notice of a change is delivered) shall be the address set

forth in the attachment to Schedule 1.

 

10.           Counterparts;

Delivery by Facsimile.  This

Assignment Agreement may be executed in counterparts.  Transmission by facsimile of an executed counterpart of this

Assignment Agreement shall be deemed to constitute due and sufficient delivery

of such counterpart and such facsimile shall be deemed to be an original

counterpart of this Assignment Agreement.

 

IN WITNESS WHEREOF, the duly authorized officers of the parties hereto

have executed this Assignment Agreement by executing Schedule 1 hereto as of

the date first above written.

 

3

 

SCHEDULE 1

to Assignment Agreement

 

	

  1.

  	

  Description and Date of Credit Agreement:

  
	

   

  	

   

  	

   

  
	

  2.

  	

  Date of Assignment

  Agreement:               , 20   

  
	

   

  	

   

  	

   

  
	

  3.

  	

  Amounts (As of Date of Item 2 above):

  

 

	

   

  	

   

  	

   

  	

  Outstanding

  Revolving

  Credit Exposure

  	

   

  	

  Term

  Loans

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  a.

  	

  Assignee’s

  percentage of each credit facility purchased under the Assignment Agreement**

  	

                     

  	

  %

  	

                    

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  b.

  	

  Amount of each

  credit facility purchased under the Assignment Agreement***

  	

  $                   

  	

   

  	

  $                  

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  4.

  	

  Assignee’s

  Revolving Commitment (or Outstanding Revolving Credit Exposure with respect

  to terminated Revolving Commitments) purchased hereunder:

  	

  $                   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  5.

  	

  Proposed

  Effective Date:

  	

                     

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  6.

  	

  Assignment Fee

  Arrangement

  	

  50/50

  	

   

  	

   

  	

   

  

 

Accepted and

Agreed:

 

	

  [NAME OF

  ASSIGNOR]

  	

   

  	

  [NAME OF

  ASSIGNEE]

  
	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

   

  	

  Title:

  	

   

  	

   

  
									

 

 

	

  ACCEPTED AND

  CONSENTED TO**** BY

  [NAME OF BORROWER]

  	

   

  	

  ACCEPTED AND

  CONSENTED TO**** BY

  [NAME OF ADMINISTRATIVE AGENT]

  
	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

   

  	

  Title:

  	

   

  	

   

  
									

 

 

**           Percentage taken to 10 decimal places

***         If fee is split 50-50, pick N/A as

option

****       Delete if not required by Credit

Agreement

 

 

Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

 

ADMINISTRATIVE

INFORMATION SHEET

 

Attach Assignor’s

Administrative Information Sheet, which must include notice addresses for the

Assignor and the Assignee (Sample form shown below)

 

Assignor Information

Contact:

 

	

  Name:

  	

   

  	

   

  	

  Telephone No.:

  	

   

  
	

  Fax No.:

  	

   

  	

   

  	

  Telex No.:

  	

   

  
	

   

  	

  Answerback:

  	

   

  
								

 

Payment Information:

 

	

  Name & ABA #

  of Destination Bank:

  	

   

  
	

   

  	

   

  
	

   

  
	

  Account Name

  & Number for Wire Transfer:

  	

   

  
	

   

  	

   

  
	

   

  
	

  Other

  Instructions:

  	

   

  
	

   

  
	

   

  
	

  Address for Notices for Assignor:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
					

 

 

	

  Assignee Information

  
	

   

  	

   

  	

   

  
	

  Credit Contact:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  	

   

  	

  Telephone No.:

  	

   

  
	

  Fax No.:

  	

   

  	

   

  	

   

  	

  Telex No.:

  	

   

  
	

   

  	

   

  	

  Answerback:

  	

   

  
	

   

  	

   

  	

   

  
	

  Key Operations Contacts:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Booking

  Installation:

  	

   

  	

   

  	

   

  	

  Booking

  Installation:

  	

   

  
	

  Name:

  	

   

  	

   

  	

   

  	

  Name:

  	

   

  
	

  Telephone No.:

  	

   

  	

   

  	

   

  	

  Telephone No.:

  	

   

  
	

  Fax No.:

  	

   

  	

   

  	

   

  	

  Fax No.:

  	

   

  
	

  Telex No.:

  	

   

  	

   

  	

   

  	

  Telex No.:

  	

   

  
	

  Answerback:

  	

   

  	

   

  	

   

  	

  Answerback:

  	

   

  
																				

 

 

Payment Information:

 

	

  Name & ABA # of Destination Bank:

  	

   

  
	

   

  	

   

  
	

   

  
	

  Account Name & Number for Wire Transfer:

  	

   

  
	

   

  	

   

  
	

   

  
	

  Other Instructions:

  	

   

  
	

   

  
	

   

  
	

  Address for Notices for Assignee:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
					

 

 

HNB

INFORMATION

 

Assignee will be called promptly upon receipt of the

signed agreement.

 

	

  Initial Funding Contact:

  	

   

  	

  Subsequent Operations Contact:

  
	

   

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  	

   

  	

  Name:

  	

   

  
	

  Telephone

  No.:  (614)

  	

   

  	

   

  	

  Telephone

  No.:  (614)

  
	

  Fax No.:  (614)

  	

   

  	

   

  	

  Fax No.: (614)

  
	

  Huntington Telex No.:

  	

  (Answerback:

  	

  )

  
								

 

Initial Funding Standards:

 

Floating - Fund 1 day after notice.

Eurodollar - Fund 2 days notice.

 

	

  Huntington Wire Instructions:

  	

   

  	

  The Huntington National Bank

  
	

   

  	

   

  	

  ABA # 044000024

  
	

   

  	

   

  	

  Account GL#

  15804-777777

  
	

   

  	

   

  	

  Ref: Attn:

  Special Processing

  
	

   

  	

   

  	

  Ref: AirNet

  Systems, Inc.

  
	

   

  	

   

  	

   

  
	

  Address for

  Notices for Huntington:

  	

   

  	

  The Huntington

  National Bank

  
	

   

  	

   

  	

  7450 Huntington

  Park Drive – H20338

  
	

   

  	

   

  	

  Columbus, Ohio

  43235

  
	

   

  	

   

  	

  Attn:  Tina Diddle or Jason Roush

  
	

   

  	

   

  	

  Fax No.:

  614-480-2533

  

 

 

EXHIBIT D

LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION

 

To The Huntington

National Bank

 as Administrative Agent (the “Administrative

Agent”) under the Credit Agreement Described Below.

 

Re:                               Credit

Agreement, dated September 30, 2002 (as the same may be amended or modified,

the “Credit Agreement”), among AirNet Systems, Inc., an Ohio corporation (the

“Borrower”), the Lenders named therein, the Swingline Lender, the LC Issuer and

the Administrative Agent.  Capitalized

terms used herein and not otherwise defined herein shall have the meanings

assigned thereto in the Credit Agreement.

 

The Administrative Agent is specifically authorized and directed to act

upon the following standing money transfer instructions with respect to the

proceeds of Advances or other extensions of credit from time to time until

receipt by the Administrative Agent of a specific written revocation of such

instructions by the Borrower, provided, however, that the Administrative

Agent may otherwise transfer funds as hereafter directed in writing by the

Borrower in accordance with Section 12.14 of the Credit Agreement or based on

any telephonic notice made in accordance with Section 2.14 of the Credit

Agreement.

 

	

  Facility Identification Number(s)

  	

   

  
	

   

  	

   

  
	

  Customer/Account Name

  	

   

  
	

   

  	

   

  
	

  Transfer Funds To

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  For Account No.

  	

   

  
	

   

  	

   

  
	

  Reference/Attention

  To

  	

   

  
	

   

  	

   

  
	

  Authorized

  Officer (Customer Representative)

  	

   

  	

   

  	

  Date

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  (Please Print)

  	

   

  	

  Signature

  
	

   

  	

   

  	

   

  
	

  Bank Officer

  Name

  	

   

  	

  Date

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  (Please Print)

  	

   

  	

  Signature

  
	

   

  	

   

  	

   

  
	

  (Deliver Completed Form to Credit Support Staff For

  Immediate Processing)

  
												

 

 

EXHIBIT E

NOTE

 

[date]

 

AirNet Systems, Inc., an Ohio corporation (the “Borrower”), promises to

pay to the order of

                                                            

(the “Lender”) the aggregate unpaid principal amount of all [Revolving] [Term]

[Swingline] Loans made by the Lender to the Borrower pursuant to Article II of

the Agreement (as hereinafter defined), in immediately available funds at the

main office of The Huntington National Bank in Columbus, Ohio, as

Administrative Agent, together with interest thereon at the rate or rates set

forth in the Agreement.  The Borrower

shall pay the principal of and accrued and unpaid interest on such Loans as set

forth in the Agreement.

 

The Lender shall,

and is hereby authorized to, record by entries made by the Lender into its

electronic data processing system and/or internal memoranda maintained by the

Lender,  or to

otherwise record in accordance with its usual practice, the date and amount of

each such Loan and the date and amount of each principal and interest payment

hereunder.  The Borrower agrees that the

sum or sums shown on such schedule, the most recent printout from the Lender’s

electronic data processing system and/or such memoranda shall be rebuttably

presumptive evidence of the amount of the outstanding principal, interest or

any other amount due under this Note; provided, however, that the failure of the

Lender to make any such entry(s) shall not affect the obligation of the

Borrower to repay outstanding principal, interest or any other amount due under

this Note in accordance with the terms hereof.

 

This Note is one

of the Notes issued pursuant to, and is entitled to the benefits of, the Credit

Agreement dated as of September 30, 2002 (which, as it may be amended,

modified, supplemented, extended, restated and replaced from time to time, is

herein called the “Agreement”), among the Borrower, the Lenders party thereto,

including the Lender, the Swingline Lender, the LC Issuer  and The Huntington National Bank, as

Administrative Agent, to which Agreement reference is hereby made for a

statement of the terms and conditions governing this Note, including the terms

and conditions under which this Note may be prepaid or its maturity date

accelerated.  Capitalized terms used

herein and not otherwise defined herein are used with the meanings attributed

to them in the Agreement.

 

The Borrower

hereby irrevocably authorizes any attorney-at-law, including any

attorney-at-law employed or retained by the Administrative Agent and/or the

Lender, to appear for it in any action on this Note at any time after the same

becomes due as herein provided in any court of record situated in the county

where this warrant was signed (being Franklin County, Ohio), or in the county

where the Borrower then resides or can be found, to waive the issuing and

service of process, and confess a judgment in favor of the holder of this Note

against the Borrower, for the amount that may then be due, with interest at the

rate(s) provided for herein, together with the costs of suit, and to waive and

release all errors in said proceedings and the right to appeal from the

judgment rendered.  The Borrower

consents to the jurisdiction and venue of such court.  The Borrower waives any conflict of interest that any attorney-at-law

employed or retained by the

 

 

Administrative Agent

and/or the Lender may have in confessing judgment hereunder and consents to the

payment of a legal fee to any attorney-at-law confessing judgment hereunder.

 

	

   

  	

  AIRNET SYSTEMS, INC.

  an Ohio corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Print Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
					

 

WARNING

—  BY SIGNING THIS PAPER YOU GIVE UP

YOUR RIGHT TO NOTICE AND COURT TRIAL. 

IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU

WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT

FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR

RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,

OR ANY OTHER CAUSE.

 

 

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL

TO

NOTE

OF                    ,

DATED           ,

200  

 

	

  Date

  	

   

  	

  Principal

  Amount of

  Loan

  	

   

  	

  Maturity

  of Interest

  Period

  	

   

  	

  Principal

  Amount

  Paid

  	

   

  	

  Unpaid

  Balance

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

 

SCHEDULE 1

 

SUBSIDIARIES AND OTHER INVESTMENTS

(See Sections 6.14)

 

	

  Investment

  In

  	

   

  	

  Jurisdiction

  of

  Organization

  	

   

  	

  Owned

  By

  	

   

  	

  Amount of

  Investment

  	

   

  	

  Percent

  Ownership

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

 

SCHEDULE

2

 

INDEBTEDNESS AND

LIENS

(See Sections 6.11 and 6.15)

 

	

  Indebtedness

  Incurred By

  	

   

  	

  Indebtedness

  Owed To

  	

   

  	

  Property

  Encumbered (If Any)

  	

   

  	

  Maturity

  and Amount

  of Indebtedness

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

 

SCHEDULE 5.14

 

ADDRESSES OF REAL PROPERTY

OWNED OR LEASED BY

THE BORROWER

 

 

SCHEDULE 5.16

 

ENVIRONMENTAL MATTERS

 

 

SCHEDULE 5.19

 

INSURANCE SUMMARY

AND CERTIFICATION

 

The undersigned

[President/CFO] of AirNet Systems, Inc., an Ohio corporation (“Borrower”),

being first duly cautioned and sworn, deposes and makes the following

statements for the express purpose of inducing The Huntington National Bank, as

Administrative Agent for the benefit of the Lenders under that certain Credit

Agreement among Borrower, Administrative Agent, the Lenders from time to time

party thereto, the Swingline Lender thereunder and the LC Issuer thereunder to

extend credit to Borrower:

 

1.         The Borrower carries the property and

casualty insurance with respect to itself, its Subsidiaries, and their

respective businesses, described and summarized on the attached Exhibit “A”.

 

2.         The insurance described on Exhibit “A”

is adequate in all manner, including, without limitation, in type and amount of

coverage for Borrower and its Subsidiaries.

 

The undersigned is

not now under any legal disability and is properly authorized to give the

foregoing statement, and the Borrower, as well as the undersigned, shall be

bound by this affidavit.

 

 

	

   

  	

   

  	

   

  
	

   

  	

   

  
	

  STATE OF

  	

  )

  
	

   

  	

  ) SS:

  
	

  COUNTY OF

  	

  )

  

 

BEFORE ME, a

Notary Public in and for said County, personally appeared

                                    ,

the [President/Chief Financial Officer] of the above-named AirNet Systems,

Inc., an Ohio corporation, who acknowledged that he/she did sign the foregoing

instrument and that the same is the free act and deed of said corporation and

the free act and deed of

                  

personally and as such officer.

 

IN TESTIMONY

WHEREOF, I have hereunto set my hand and official seal, at

                                   ,

this       day of

                                                          ,

2002.

 

	

   

  	

   

  
	

   

  	

  Notary PublicExhibit 10.1

 

SUMMARY OF

RETENTION AND INCENTIVE PLAN

 

On September 24, 2002, the

Board of Directors of Restoragen, Inc. approved a Retention and Incentive Plan

for the Company’s four senior managers (the “Plan”).  Following is a summary of the material terms of the Plan.

 

Senior

Managers

 

David Hathaway

Ashleigh

Palmer

Roberta

Schneider

David Walker

 

Retention Plan:

 

•                                          For

the period beginning August 1, 2002 through January 31, 2003, the base salary

of each of the Senior Managers will be increased by 50%.  Each Senior Manager’s increase will apply

only to those pay periods during which the Senior Manager remains employed by

the Company.  Beginning February 1,

2003, the base salary will revert back to the base salary prior to adoption of

this Plan, unless the Board of Directors determines otherwise.

 

•                                          The

Company will pre-pay 100% of the Senior Manager’s health insurance and dental

insurance premiums for the period from October 1, 2002 to September 30,

2003.  This coverage will continue for

this period regardless of whether a Senior Manager resigns or is terminated by

the Company during this period.

 

•                                          Payments

made for increased salary and insurance will reduce any obligations by the

Company under the Senior Manager’s employment contracts.  The employment contracts are not being

terminated at this point in time.

 

Incentive Plan

– This Incentive Plan is intended to define the milestones for incentive

compensation described in the employment agreements with each Senior

Manager.  Rather than basing the

objectives on a calendar year (as contemplated by the employment agreements),

the following incentive payments will be made if the objectives are

accomplished during the 12-month period beginning on the date of adoption of

this Plan by the Board of Directors. 

Each Senior Manager will be entitled to the following incentive payments

if the Senior Manager is employed by the Company on the date the Company signs

a definitive agreement for the transaction and the transaction closes as set

forth in the definitive agreement:

 

•                                          0.5

month’s salary upon receipt of the first $500,000 milestone payment under the

non-strategic license agreement under negotiation.

 

•                                          0.5

month’s salary upon receipt of payment of the second $500,000 payment under the

non-strategic license agreement under negotiation.

 

 

22

 

 

•                                          1.0

month’s salary upon the successful closing of at least $1.5 million in a

private placement of debt.

 

•                                          3.0

months salary upon completion of a Board-approved partnership arrangement with

a viable development partner.

 

Payment of the incentive

amounts will be made as follows:

 

•                                          50%

on the closing of the transaction (receipt of funds) described in objective

 

•                                          50%

within 30 days of closing

 

If a Senior Manager is

terminated by the Company without cause after signing of the definitive

agreement but prior to closing, the Senior Manager will be entitled to payment

of the full amount for that objective. 

If a Senior Manager resigns at any time or is terminated for any other

reason, the Senior Manager forfeits any unpaid amounts under this Incentive

Plan.

 

23

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