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Title: |
Credit Agreement |
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Entities: |
AAR Corp.; Air France; Continental Airlines, Inc.; LaSalle Business Credit, LLC; State Street Bank & Trust Co.; Wilmington Trust Co.; Bank of America, NA; Bank of New York; AAR Distribution, Inc.; AAR Parts Trading, Inc.; AAR Manufacturing, Inc. |
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Date: |
2003 |
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Size: |
Preview shows 21KB of 314KB total |
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Price: |
$58 |
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ID: |
#164453 |
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CREDIT AGREEMENT
DATED AS OF MAY 29, 2003
AMONG
AAR CORP., AAR DISTRIBUTION, INC.,
AAR PARTS TRADING, INC., AAR MANUFACTURING, INC.,
AAR ENGINE SERVICES, INC. AND AAR ALLEN SERVICES, INC.
AS BORROWERS,
MERRILL LYNCH CAPITAL,
A DIVISION OF MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.,
AS AGENT AND AS A LENDER
AND
THE ADDITIONAL LENDERS
FROM TIME TO TIME PARTY HERETO
[MERRILL LYNCH LOGO]
{Page}
TABLE OF CONTENTS
{Table}
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PAGE
{S} {C}
ARTICLE 1 DEFINITIONS................................................................................1
Section 1.1 Certain Defined Terms.............................................................1
Section 1.2 Accounting Terms and Determinations..............................................19
Section 1.3 Other Definitional Provisions....................................................20
ARTICLE 2 LOANS AND LETTERS OF CREDIT...............................................................20
Section 2.1 Revolving Loans..................................................................20
Section 2.2 Interest, Interest Calculations and Certain Fees.................................22
Section 2.3 Notes............................................................................26
Section 2.4 Letters of Credit and Letter of Credit Fees......................................26
Section 2.5 General Provisions Regarding Payment; Loan Account...............................28
Section 2.6 Maximum Interest.................................................................29
Section 2.7 Taxes............................................................................30
Section 2.8 Ancillary Services...............................................................31
ARTICLE 3 REPRESENTATIONS AND WARRANTIES............................................................31
Section 3.1 Existence and Power..............................................................31
Section 3.2 Organization and Governmental Authorization; No Contravention....................31
Section 3.3 Binding Effect...................................................................31
Section 3.4 Capitalization...................................................................32
Section 3.5 Financial Information............................................................32
Section 3.6 Litigation.......................................................................33
Section 3.7 Ownership of Property............................................................33
Section 3.8 No Default.......................................................................33
Section 3.9 Labor Matters....................................................................33
Section 3.10 Regulated Entities...............................................................33
Section 3.11 Margin Regulations...............................................................33
Section 3.12 Compliance With Laws.............................................................34
Section 3.13 Taxes............................................................................34
Section 3.14 Compliance with ERISA............................................................34
Section 3.15 Brokers..........................................................................35
Section 3.16 Compliance with Environmental Requirements; No Hazardous Materials...............35
Section 3.17 Intellectual Property............................................................36
Section 3.18 Real Property Interests..........................................................36
Section 3.19 Solvency.........................................................................36
Section 3.20 Borrowers and Each Other Credit Party............................................36
Section 3.21 Full Disclosure..................................................................37
Section 3.22 Representations and Warranties Incorporated from Other Operative Documents.......37
ARTICLE 4 AFFIRMATIVE COVENANTS.....................................................................37
Section 4.1 Financial Statements and Other Reports...........................................37
Section 4.2 Payment and Performance of Obligations...........................................41
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TABLE OF CONTENTS
(continued)
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Section 4.3 Conduct of Business and Maintenance of Existence.................................41
Section 4.4 Maintenance of Property; Insurance...............................................42
Section 4.5 Compliance with Laws.............................................................43
Section 4.6 Inspection of Property, Books and Records........................................43
Section 4.7 Use of Proceeds..................................................................43
Section 4.8 Lenders' Meetings................................................................43
Section 4.9 Hazardous Materials; Remediation.................................................43
Section 4.10 Further Assurances...............................................................44
ARTICLE 5 NEGATIVE COVENANTS........................................................................44
Section 5.1 Debt.............................................................................44
Section 5.2 Liens............................................................................46
Section 5.3 Restricted Distributions.........................................................47
Section 5.4 Restrictive Agreements...........................................................48
Section 5.5 Payments and Modifications of Other Debt.........................................48
Section 5.6 Consolidations, Mergers and Sales of Assets......................................49
Section 5.7 Purchase of Assets, Investments..................................................50
Section 5.8 Transactions with Affiliates.....................................................50
Section 5.9 Modification of Organizational Documents.........................................51
Section 5.10 Fiscal Year......................................................................51
Section 5.11 Conduct of Business..............................................................51
Section 5.12 Lease Payments...................................................................51
Section 5.13 Bank Accounts....................................................................51
ARTICLE 6 ACCOUNTS AND INVENTORY REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS..............52
Section 6.1 Accounts and Account Collections.................................................52
Section 6.2 Inventory........................................................................53
ARTICLE 7 FINANCIAL COVENANTS.......................................................................54
Section 7.1 Capital Expenditures.............................................................54
Section 7.2 Minimum EBITDA...................................................................55
Section 7.3 Interest Coverage Ratio..........................................................55
ARTICLE 8 CONDITIONS................................................................................55
Section 8.1 Conditions to Closing............................................................55
Section 8.2 Conditions to Each Loan and Support Agreement....................................56
ARTICLE 9 EVENTS OF DEFAULT.........................................................................56
Section 9.1 Events of Default................................................................56
Section 9.2 Acceleration and Suspension or Termination of Revolving Loan Commitment..........58
Section 9.3 Cash Collateral..................................................................59
Section 9.4 Default Rate of Interest and Suspension of LIBOR Rate Options....................59
Section 9.5 Setoff Rights....................................................................59
Section 9.6 Application of Proceeds..........................................................59
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TABLE OF CONTENTS
(continued)
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Section 9.7 Non-Recourse Guarantors..........................................................60
ARTICLE 10 EXPENSES, INDEMNITY, TAXES AND RIGHT TO PERFORM...........................................60
Section 10.1 Expenses.........................................................................60
Section 10.2 Indemnity........................................................................60
Section 10.3 Taxes............................................................................61
Section 10.4 Right to Perform.................................................................61
ARTICLE 11 AGENT.....................................................................................61
Section 11.1 Appointment and Authorization....................................................61
Section 11.2 Agent and Affiliates.............................................................62
Section 11.3 Action by Agent..................................................................62
Section 11.4 Consultation with Experts........................................................62
Section 11.5 Liability of Agent...............................................................62
Section 11.6 Indemnification..................................................................63
Section 11.7 Right to Request and Act on Instructions.........................................63
Section 11.8 Credit Decision..................................................................63
Section 11.9 Collateral Matters...............................................................63
Section 11.10 Agency for Perfection............................................................64
Section 11.11 Notice of Default................................................................64
Section 11.12 Successor Agent..................................................................64
Section 11.13 Disbursements of Revolving Loans; Payment........................................64
ARTICLE 12 MISCELLANEOUS.............................................................................67
Section 12.1 Survival.........................................................................67
Section 12.2 No Waivers.......................................................................67
Section 12.3 Notices..........................................................................67
Section 12.4 Severability.....................................................................67
Section 12.5 Amendments and Waivers...........................................................67
Section 12.6 Assignments; Participations......................................................68
Section 12.7 Headings.........................................................................69
Section 12.8 Confidentiality..................................................................69
Section 12.9 GOVERNING LAW; SUBMISSION TO JURISDICTION........................................70
Section 12.10 WAIVER OF JURY TRIAL.............................................................70
Section 12.11 Publication; Advertisement.......................................................70
Section 12.12 Counterparts; Integration........................................................71
Section 12.13 Reimbursement....................................................................71
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iii
{Page}
ANNEXES AND EXHIBITS
ANNEXES
Annex A - Commitment Annex
Annex B - Closing Checklist
EXHIBITS
Exhibit A - Assignment Agreement
Exhibit B - Compliance Certificate
Exhibit C - Borrowing Base Certificate
Exhibit D - Notice of Borrowing
SCHEDULES
Schedule 3.5 - Financial Statements
Schedule 4.4 - Insurance Coverage
Schedule 5.1(j)- Permitted Mortgage Debt Terms and Conditions
Schedule 5.5 - Terms and Conditions of Extension, Renewal, Replacement or
Refinancing of October, 2003 Principal Installments
Schedule 5.6 - Permitted Dispositions
{Page}
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of May 29, 2003 among AAR Corp., a Delaware
corporation ("AAR"), AAR Distribution, Inc., an Illinois corporation
("DISTRIBUTION"), AAR Parts Trading, Inc., an Illinois corporation ("PARTS
TRADING"), AAR Manufacturing, Inc., an Illinois corporation ("MANUFACTURING"),
AAR Engine Services, Inc., an Illinois corporation ("ENGINE SERVICES") and AAR
Allen Services, Inc., an Illinois corporation ("ALLEN SERVICES" and together
with AAR, Distribution, Parts Trading, Manufacturing, Engine Services and Allen
Services, individually a "BORROWER" and collectively "BORROWERS"), the financial
institutions from time to time parties hereto, each as a Lender, and MERRILL
LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc.,
individually as a Lender and as Agent.
RECITALS:
WHEREAS, Borrowers desire that Lenders extend certain working capital
facilities to Borrowers to provide funds necessary to provide working capital
financing for Borrowers and certain of their Subsidiaries and to provide funds
for other general business purposes of Borrowers and certain of their
Subsidiaries; and
WHEREAS, Borrowers desire to secure all of their Obligations under the
Financing Documents by granting to Agent, for the benefit of Agent and Lenders,
a security interest in and lien upon certain of their personal and real
property;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Lenders and Agent agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS. The following terms have the
following meanings:
"AAR" shall heave the meaning contained in the first paragraph of the
Agreement.
"ACCOUNTS" means "accounts" (as defined in Article 9 of the UCC) of
Borrowers, including without limitation any and all rights to payment for the
sale or lease of goods or rendition of services, whether or not they have been
earned by performance, in each case, for purposes of calculating the Borrowing
Base, net of any credits, rebates or offsets owed by any Borrower to the
respective customer.
"ACCOUNT DEBTOR" means "account debtor", as defined in Article 9 of the
UCC.
"AFFILIATE" means with respect to any Person (i) any Person that directly
or indirectly controls such Person, (ii) any Person which is controlled by or is
under common control with such controlling Person and (iii) in the case of an
individual, the parents, descendants, siblings and spouse of such individual. As
used in this definition, the term "CONTROL" of a Person means the possession,
directly or indirectly, of the power to vote ten percent (10%) or more of any
class
{Page}
of voting securities of such Person or to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"AGENT" means Merrill Lynch in its capacity as agent for the Lenders
hereunder, as such capacity is established and subject to the provisions of
Article 11 and the successors of Merrill Lynch in such capacity.
"AGENT ADVANCES" has the meaning set forth in Section 2.1(a)(ii).
"AGREEMENT" means this Credit Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"AIRCRAFT LEASE DOCUMENTS" means:
(1) (a) Participation Agreement dated as of June 28, 2000 by and among
AAR, as guarantor, certain operating subsidiaries of AAR, as lessee, Bank
of America, National Association, as administrator, and the other Persons
named therein, (b) Master Aircraft and Engine Lease Agreement dated as of
June 28, 2000 among First Security Bank, National Association, as lessor,
AAR Aircraft & Engine Group, Inc. (n/k/a AAR Parts Trading, Inc. and herein
"A&E"), as lessee, and AAR International, Inc. ("AARI"), as lessee, (c)
Security Agreement dated as of June 28, 2000, among First Security Bank,
National Association, First Security Trust Company of Nevada, A&E and AARI,
and (d) Guaranty dated as of June 28, 2000, made by AAR in favor of First
Security Bank, National Association, First Security Trust Company of
Nevada, and certain other parties named therein, and all other documents,
instruments and certificates executed in connection therewith and all
amendments or modifications to, or replacements (whether effected upon
termination of any time thereafter) or refinancings of, any of the
foregoing (to the extent any such amendment, modification, replacement or
refinancing is permitted hereunder);
(2) (a) Second Amended and Restated Lease and Security Agreement dated
as of June 25, 2001 by and between AARI and Wells Fargo Bank Northwest,
N.A., as owner trustee, and (b) Guaranty dated as of June 25, 2001 executed
by AAR, and all other documents, instruments and certificates executed in
connection therewith and all amendments or modifications to, or
replacements (whether effected upon termination or any time thereafter) or
refinancings of, any of the foregoing (to the extent any such amendment,
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