LOAN AGREEMENT

 

                                                                     DRAFT DATED
                                                                    MAY 17, 1996

                              AIRNET SYSTEMS, INC.

                   __________________________________________

                                 LOAN AGREEMENT

                            dated as of May __, 1996

                   __________________________________________

                             The Banks party hereto,

                                       and

                               NBD BANK, as Agent

                                TABLE OF CONTENTS

Article                                                                     Page
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     I.   DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . .     

          1.1  Certain Definitions . . . . . . . . . . . . . . . . . .     
          1.2  Other Definitions; Rules of
                  Construction . . . . . . . . . . . . . . . . . . . .     

     II.  THE COMMITMENTS AND THE ADVANCES . . . . . . . . . . . . . .     

          2.1  Commitment of the Banks . . . . . . . . . . . . . . . .     
          2.2  Termination and Reduction of
                Commitments. . . . . . . . . . . . . . . . . . . . . .     
          2.3  Fees. . . . . . . . . . . . . . . . . . . . . . . . . .     
          2.4  Disbursement of Advances. . . . . . . . . . . . . . . .     
          2.5  Conditions for First Disbursement . . . . . . . . . . .     
          2.6  Further Conditions for Disbursement . . . . . . . . . .     
          2.7  Subsequent Elections as to 
                 Borrowings; Etc.. . . . . . . . . . . . . . . . . . .     
          2.8  Limitation of Requests and Elections. . . . . . . . . .     
          2.9  Minimum Amounts; Limitation on
                  Number of Loans. . . . . . . . . . . . . . . . . . .     
          2.10 Extension of Termination Dates. . . . . . . . . . . . .     

     III. PAYMENTS AND PREPAYMENTS OF ADVANCES . . . . . . . . . . . .     

          3.1  Principal Payments and Prepayments. . . . . . . . . . .     
          3.2  Interest Payments . . . . . . . . . . . . . . . . . . .     
          3.3  Letter of Credit Reimbursement
                  Payments . . . . . . . . . . . . . . . . . . . . . .     
          3.4  Payment Method. . . . . . . . . . . . . . . . . . . . .     
          3.5  No Setoff or Deduction. . . . . . . . . . . . . . . . .     
          3.6  Payment on Non-Business Day;
                  Payment Computations . . . . . . . . . . . . . . . .     
          3.7  Additional Costs. . . . . . . . . . . . . . . . . . . .     
          3.8  Illegality and Impossibility. . . . . . . . . . . . . .     
          3.9  Indemnification . . . . . . . . . . . . . . . . . . . .     

                                       -i-

     IV.  REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . .     

          4.1  Corporate Existence and Power . . . . . . . . . . . . .     
          4.2  Corporate Authority . . . . . . . . . . . . . . . . . .     
          4.3  Binding Effect. . . . . . . . . . . . . . . . . . . . .     
          4.4  Subsidiaries. . . . . . . . . . . . . . . . . . . . . .     
          4.5  Litigation. . . . . . . . . . . . . . . . . . . . . . .     
          4.6  Financial Condition . . . . . . . . . . . . . . . . . .     
          4.7  Use of Advances . . . . . . . . . . . . . . . . . . . .     
          4.8  Consents, Etc.. . . . . . . . . . . . . . . . . . . . .     
          4.9  Taxes . . . . . . . . . . . . . . . . . . . . . . . . .     
          4.10 Title to Properties; Acquisition. . . . . . . . . . . .     
          4.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . .     
          4.12 Environmental Matters . . . . . . . . . . . . . . . . .     
          4.13 No Defaults . . . . . . . . . . . . . . . . . . . . . .     
          4.14 No Burdensome Restriction . . . . . . . . . . . . . . .
          4.15 Initial Public Offering . . . . . . . . . . . . . . . .
          4.16 FAA Certifications. . . . . . . . . . . . . . . . . . .
          4.17 Airworthiness Certificates. . . . . . . . . . . . . . .

     V    COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . .     

          5.1  Affirmative Covenants . . . . . . . . . . . . . . . . .     

               (a)     Preservation of Corporate
                          Existence, Etc.. . . . . . . . . . . . . . .     
               (b)     Compliance with Laws, Etc.. . . . . . . . . . .     
               (c)     Maintenance of Properties;
                          Insurance. . . . . . . . . . . . . . . . . .     
               (d)     Reporting Requirements. . . . . . . . . . . . .     
               (e)     Accounting; Access to
                          Records, Books, Etc. . . . . . . . . . . . .     
               (f)     Further Assurances. . . . . . . . . . . . . . .          
               

          5.2  Negative  Covenants . . . . . . . . . . . . . . . . . .     

               (a)     Tangible Net Worth. . . . . . . . . . . . . . .     
               (b)     Funded Debt to Ratio  . . . . . . . . . . . . .     
               (c)     Funded Debt to 
                          Total Capitalization . . . . . . . . . . . .
               (d)     Cash Flow Coverage Ratio. . . . . . . . . . . .

                                      -ii-

               (e)     Liens . . . . . . . . . . . . . . . . . . . . .          
               (f)     Merger; Etc.. . . . . . . . . . . . . . . . . .     
               (g)     Disposition of Assets, Etc. . . . . . . . . . .     
               (h)     Dividends and Other Restricted
                          Payments . . . . . . . . . . . . . . . . . .     
               (i)     Investment Loans and Advances . . . . . . . . .
               (j)     Indebtedness. . . . . . . . . . . . . . . . . .
               (k)     Nature of Business. . . . . . . . . . . . . . .
               (l)     Transactions with Affiliates. . . . . . . . . .
               (m)     Additional Covenants. . . . . . . . . . . . . .     

     VI.  DEFAULT .    . . . . . . . . . . . . . . . . . . . . . . . .

          6.2  Events of Default . . . . . . . . . . . . . . . . . . .     
          6.2  Remedies. . . . . . . . . . . . . . . . . . . . . . . .     

     VII. THE AGENT AND THE BANKS. . . . . . . . . . . . . . . . . . .     

          7.1  Appointment and Authorization . . . . . . . . . . . . .     
          7.2  Agent and Affiliates. . . . . . . . . . . . . . . . . .     
          7.3  Scope of Agent's Duties . . . . . . . . . . . . . . . .     
          7.4  Reliance by Agent . . . . . . . . . . . . . . . . . . .     
          7.5  Default . . . . . . . . . . . . . . . . . . . . . . . .
          7.6  Liability of Agent. . . . . . . . . . . . . . . . . . .     
          7.7  Nonreliance on Agent and
                  Other Banks. . . . . . . . . . . . . . . . . . . . .     
          7.8  Indemnification . . . . . . . . . . . . . . . . . . . .     
          7.9  Successor Agent . . . . . . . . . . . . . . . . . . . .     
          7.10 Sharing of Payments . . . . . . . . . . . . . . . . . .     
          7.11 Withholding Tax Exemption . . . . . . . . . . . . . . .     

     VIII.  MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . .     

          8.1  Amendments, Etc.. . . . . . . . . . . . . . . . . . . .     
          8.2  Notices . . . . . . . . . . . . . . . . . . . . . . . .
          8.3  No Waiver By conduct; Remedies
                  Cumulative . . . . . . . . . . . . . . . . . . . . .     
          8.4  Reliance on and Survival of
                  Various Provisions . . . . . . . . . . . . . . . . .     

                                      -iii-

          8.5  Expenses; Indemnification . . . . . . . . . . . . . . .     
          8.6  Successors and Assigns. . . . . . . . . . . . . . . . .     
          8.7  Counterparts. . . . . . . . . . . . . . . . . . . . . .     
          8.8  Governing Law . . . . . . . . . . . . . . . . . . . . .     
          8.9  Table of Contents and Headings. . . . . . . . . . . . .     
          8.10 Construction of Certain Provisions. . . . . . . . . . .
          8.11 Integration and Severability. . . . . . . . . . . . . .     
          8.12 Independence of Covenants . . . . . . . . . . . . . . .     
          8.13 Interest Rate Limitation. . . . . . . . . . . . . . . .     

EXHIBITS
- --------

          Exhibit A. . . . . . . . .     Revolving Credit A Note 
          Exhibit B. . . . . . . . .     Revolving Credit B Note 
          Exhibit C. . . . . . . . .     Request for Advance
          Exhibit D. . . . . . . . .     Request for Conversion
          Exhibit E. . . . . . . . .     Assignment and Acceptance
          
SCHEDULES
- ----------

          Schedule 2.10. . . . . . .     Extension Request
          Schedule 4.4 . . . . . . .     Subsidiaries
          Schedule 4.5 . . . . . . .     Litigation
          Schedule 4.6 . . . . . . .     Contingent Liabilities
          Schedule 4.12. . . . . . .     Environmental Matters
          Schedule 5.2(e). . . . . .     Liens
          Schedule 5.2(j). . . . . .     Indebtedness

                                      -iv-

     THIS LOAN AGREEMENT, dated as of May ___, 1996 (this "Agreement"), is among
AIRNET SYSTEMS, INC., an Ohio corporation (the "Company"), the lenders party
hereto from time to time (collectively, the "Banks" and individually, a "Bank")
and NBD BANK, a Michigan banking corporation, as agent for the Banks (in such
capacity, the "Agent").

                                  INTRODUCTION

     The Company desires to obtain a revolving credit facility, including
letters of credit, in the aggregate principal amount of $20,000,000 for working
capital and general corporate purposes, and a revolving credit facility in
aggregate principal amount of $30,000,000 to pay off certain outstanding debt,
make acquisitions, and purchase aircraft and equipment, and the Banks are
willing to establish such credit facilities in favor of the Company on the terms
and conditions herein set forth.

     In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

     1.1  CERTAIN DEFINITIONS.  As used herein the following terms shall have
the following respective meanings:

     "ADVANCE" shall mean any Loan and any Letter of Credit Advance.

     "AFFILIATE", when used with respect to any Person shall mean any other
Person which, directly or indirectly, controls or is controlled by or is under
common control with such Person.  For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.

     "APPLICABLE LENDING OFFICE" shall mean, with respect to any Advance made by
any Bank or with respect to such Bank's Commitment, the office of such Bank or
of any Affiliate of such Bank located at the address specified as the applicable
lending office for such Bank set  forth next to the name of such Bank in the
signature pages hereof or any other office or Affiliate of such Bank or of any
Affiliate of such Bank hereafter selected and notified to the Company and the
Agent by such Bank.

     "APPLICABLE MARGIN" shall mean the following margin based upon the Funded
Debt Ratio as adjusted on the first day of each fiscal quarter of the Company
based upon the Funded Debt Ratio as of the last day of the fiscal quarter
preceding the fiscal quarter most recently ended, PROVIDED, THAT, the Eurodollar
Rate shall not be adjusted pursuant to any change in the Applicable 

                                       -1-

Margin for any outstanding Eurodollar Rate Loan until after the end of the
Eurodollar Interest Period for such Eurodollar Rate Loan.

- ------------------------------------------------------------------------------------------------ Funded Debt Ratio Applicable Margin Applicable Margin Applicable Margin for for Eurodollar Rate for Facility Fees Letter of Credit Fees Loan Under Section 2.3(a) Under Section 2.3(b) - ------------------------------------------------------------------------------------------------ less than 1.0 0.700% 0.200% 0.700% - ------------------------------------------------------------------------------------------------ greater than or equal to 0.875% 0.225% 0.875% 1.0 but less than 2.0 - ------------------------------------------------------------------------------------------------ greater than or equal to 1.000% 0.250% 1.000% 2.0 but less than 2.5 - ------------------------------------------------------------------------------------------------ greater than or equal to 1.125% 0.375% 1.125% 2.5 but less than 3.0 - ------------------------------------------------------------------------------------------------
"BORROWING" shall mean the aggregation of Advances, including each Letter of Credit issuance, of the Banks to be made to the Company, or continuations and conversions of any Loans, made pursuant to Article II on a single date and, in the case of any Eurodollar Rate Loans, for a single Eurodollar Interest Period, which Borrowings may be classified for purposes of this Agreement by reference to the type of Loans or the type of Advance comprising the related Borrowing, e.g., a "Eurodollar Rate Borrowing" is a Borrowing comprised of Eurodollar Rate Loans and a "Letter of Credit Borrowing" is an Advance comprised of a single Letter of Credit. "BORROWING BASE A" shall mean an amount from time to time equal to 75% of the quick liquidation value of aircraft and other equipment, in each case acceptable to the Required Banks, owned by the Company. As used in this definition, quick liquidation value shall mean the expected value if such aircraft or equipment if sold "as is, where is" to a broker selected by the Agent. Additionally, any aircraft or equipment (a) which is not in the possession of the Company or is subject to any Lien, (b) that is located outside the United States, or (c) that is otherwise unacceptable to the Agent shall not be included in the calculation of Borrowing Base A. Borrowing Base A may be reset from time to time at the option of the Agent or the Required Banks. "BORROWING BASE B" shall mean an amount from time to time equal to the sum of (a) 80% of the Company's "acceptable accounts receivable," plus (b) the lesser of (i) 50% of the net book value of the Company's "acceptable aircraft parts inventory" and (ii) $4,000,000. As used herein, "acceptable accounts receivable" shall mean the open accounts receivable of the -2- Company except (i) those due from Affiliates, officers, directors or shareholders of the Company, (ii) those which are over 90 days old from the date of invoice, (iii) those which are subject to offset, (iv) those in respect of which the amount is in dispute, (v) those which are payable by any Person as to which 10% or more of the aggregate accounts receivable payable by such Person to the Company do not otherwise constitute acceptable accounts receivable, provided that up to $100,000 of such accounts receivable which would otherwise constitute acceptable accounts receivable but for this clause (v) shall be included in Borrowing Base B, (vi) those which are payable by any Person that is subject to any bankruptcy, insolvency, liquidation, reorganization or similar proceeding or otherwise that it is generally not paying its debts as they become due, and (vii) those which are for any other reason at any time reasonably deemed by the Lender to be unacceptable. As used herein, "acceptable aircraft parts inventory" shall mean that inventory consisting of aircraft spare parts owned by the Company, except such inventory (i) that is not in the possession of the Company, (ii) that is held for lease or is the subject of any lease, and (iii) that for any other reason is at any time reasonably deemed by the Agent to be unacceptable. "BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other day on which the Agent is not open to the public for carrying on substantially all of its banking functions in Detroit, Michigan. "CAPITAL LEASE" of any Person shall mean any lease which, in accordance with generally accepted accounting principles, is or should be capitalized on the books of such Person. "CASH FLOW COVERAGE RATIO" shall mean, as of the last day of any fiscal quarter of the Company and determined for the Company and its Subsidiaries on a Consolidated basis, the ratio of (a) EBITDA plus the amount of rent paid under operating leases, and minus the amount of capital expenditures which are not financed by long term debt, in each case for the four consecutive fiscal quarter period then ending, to (b) Interest Expense, plus the amount of rent paid under operating leases, in each case as calculated for the four fiscal quarters then ending, and plus the current portion of Funded Debt and, to the extent not included in such current portion of Funded Debt, one-sixth of the principal balance of the Revolving Credit A Loans, in each case as of the last day of such fiscal quarter. "CHANGE IN CONTROL" means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock of the Company. "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations thereunder. "COMMITMENT" shall mean, with respect to each Bank, the commitment of each such Bank to make Loans and to participate in Letter of Credit Advances made through the Agent pursuant to Section 2.1, in amounts not exceeding in aggregate principal amount outstanding at any time the respective commitment amounts for each such Bank set forth next to the name of -3- each such Bank in the signature pages hereof, as such amounts may be reduced from time to time pursuant to Section 2.2. The Commitment of each Bank to make Revolving Credit A Advances under Section 2.1(a) is herein referred to as its "REVOLVING CREDIT A COMMITMENT" and the Commitment of each Bank to make Revolving Credit B Loans under Section 2.1(b) is herein referred to as its "REVOLVING CREDIT B COMMITMENT". "CONSOLIDATED" shall mean, when used with reference to any financial term in this Agreement, the aggregate for two or more Persons of the amounts signified by such term for all such Persons determined on a consolidated basis in accordance with generally accepted accounting principles. "CONTINGENT LIABILITIES" of any Person shall mean, as of any date, all obligations of such Person or of others for which such Person is contingently liable, as obligor, guarantor, surety, accommodation party, partner or in any other capacity, or in respect of which obligations such Person assures a creditor against loss or agrees to take any action to prevent any such loss (other than endorsements of negotiable instruments for collection in the ordinary course of business), including without limitation all reimbursement obligations of such Person in respect of any letters of credit, surety bonds or similar obligations (including, without limitation, bankers acceptances) and all obligations of such Person to advance funds to, or to purchase assets, property or services from, any other Person for no purpose other than to maintain the financial condition of such other Person. "CONTRACTUAL OBLIGATION" shall mean as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "DEFAULT" shall mean any event or condition which might become an Event of Default with notice or lapse of time or both. "DOLLARS" and "$" shall mean the lawful money of the United States of America. "EBITDA" means, for any period, Net Income for such period plus all amounts deducted in determining such Net Income on account of (a) Interest Expense, (b) income taxes, and (c) depreciation and amortization expense. "EFFECTIVE DATE" shall mean the effective date specified in the final paragraph of this Agreement. "ENVIRONMENTAL LAWS" at any date shall mean all provisions of law, statute, ordinances, rules, regulations, judgments, writs, injunctions, decrees, orders, awards and standards promulgated by the government of the United States of America or any foreign government or by any state, province, municipality or other political subdivision thereof or therein, or by any court, agency, instrumentality, regulatory authority or commission of any of the foregoing concerning the protection of, or regulating the discharge of substances into, the environment. -4- "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations thereunder. "ERISA AFFILIATE" shall mean, with respect to any Person, any trade or business (whether or not incorporated) which, together with such Person or any Subsidiary of such Person, would be treated as a single employer under Section 414 of the Code and the regulations promulgated thereunder. "EURODOLLAR BUSINESS DAY" shall mean, with respect to any Eurodollar Rate Loan, a day which is both a Business Day and a day on which dealings in Dollar deposits are carried out in the London interbank market. "EURODOLLAR INTEREST PERIOD" shall mean, with respect to any Eurodollar Rate Loan, the period commencing on the day such Eurodollar Rate Loan is made or converted to a Eurodollar Rate Loan and ending on the day which is one, two, three or six months thereafter, as the Company may elect under Section 2.4 or 2.7, and each subsequent period commencing on the last day of the immediately preceding Eurodollar Interest Period and ending on the day which is one, two, three or six months thereafter, as the Company may elect under Section 2.4 or 2.7, PROVIDED, HOWEVER, that (a) any Eurodollar Interest Period which commences on the last Eurodollar Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Eurodollar Business Day of the appropriate subsequent calendar month, (b) each Eurodollar Interest Period which would otherwise end on a day which is not a Eurodollar Business Day shall end on the next succeeding Eurodollar Business Day or, if such next succeeding Eurodollar Business Day falls in the next succeeding calendar month, on the next preceding Eurodollar Business Day, and (c) no Eurodollar Interest Period which would end after Termination Date A with respect to any Revolving Credit A Loan or after Termination Date B with respect to any Revolving Credit B Loan shall be permitted. "EURODOLLAR RATE" shall mean, with respect to any Eurodollar Rate Loan and the related Eurodollar Interest Period, the per annum rate that is equal to the sum of: (a) the Applicable Margin, plus (b) the rate per annum obtained by dividing (i) the per annum rate of interest at which deposits in Dollars for such Eurodollar Interest Period and in an aggregate amount comparable to the amount of such Eurodollar Rate Loan to be made by the Agent in its capacity as a Bank hereunder are offered to the Agent by other prime banks in the London interbank market at approximately 11:00 a.m. London time on the second Eurodollar Business Day prior to the first day of such Eurodollar Interest Period by (ii) an amount equal to one minus the stated maximum rate (expressed as a decimal) of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) that are specified on the first day of such Eurodollar Interest Period by the Board of Governors of the Federal Reserve System (or any successor agency thereto) for determining the maximum reserve requirement with respect -5- to eurocurrency funding (currently referred to as "Eurocurrency liabilities" in Regulation D of such Board) maintained by a member bank of such System; all as conclusively determined by the Agent, absent manifest error, such sum to be rounded up, if necessary, to the nearest whole multiple of one one-hundredth of one percent (1/100 of 1%). "EURODOLLAR RATE LOAN" shall mean any Loan which bears interest at the Eurodollar Rate. "EVENT OF DEFAULT" shall mean any of the events or conditions described in Section 6.1. "FAA" shall mean, collectively, the United States Department of Transportation and/or United States Federal Aviation Administration and/or the Administrator of the United States Federal Aviation Administration and/or the Secretary of Transportation or any Person, governmental department, bureau, commission or agency succeeding to the functions of any of the foregoing. "FEDERAL FUNDS RATE" shall mean the per annum rate that is equal to the average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published by the Federal Reserve Bank of New York for such day, or, if such rate is not so published for any day, the average of the quotations for such rates received by the Agent from three federal funds brokers of recognized standing selected by the Agent in its discretion; all as conclusively determined by the Agent, such sum to be rounded up, if necessary, to the nearest whole multiple of one one-hundredth of one percent (1/100 of 1%), which Federal Funds Rate shall change simultaneously with any change in such published or quoted rates. "FIXED RATE LOAN" shall mean any Eurodollar Rate Loan or any Negotiated Rate Loan. "FLOATING RATE" shall mean the per annum rate equal to the sum of (a) the Applicable Floating Rate Margin plus (b) the greater of (i) the Prime Rate in effect from time to time , and (ii) the sum of one-half percent (1/2%) per annum plus the Federal Funds Rate in effect from time to time; which Floating Rate shall change simultaneously with any change in such Prime Rate or Federal Funds Rate, as the case may be. "FLOATING RATE LOAN" shall mean any Loan which bears interest at the Floating Rate. "FUNDED DEBT" as of any date, shall mean: (a) all debt for borrowed money and similar monetary obligations evidenced by bonds, notes, debentures, Capital Lease obligations or otherwise, including without limitation obligations in respect of the deferred purchase price of properties or assets, in each case whether direct or indirect; (b) all liabilities secured by any Lien -6- existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; (c) all reimbursements obligations under outstanding letters of credit in respect of drafts which (i) may be presented or (ii) have been presented and have not yet been paid, and (d) all Contingent Liabilities relating to any of the obligations of others similar in character to those described in the foregoing clauses (a) through (c), all as determined for the Company and its Subsidiaries on a Consolidated basis. "FUNDED DEBT RATIO" shall mean, as of any date, the ratio of (a) Funded Debt as of such date to (b) EBITDA, as calculated for the four consecutive fiscal quarters of the Company most recently ended. "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean generally accepted accounting principles applied on a basis consistent with that reflected in the financial statements referred to in Section 4.6. "GUARANTIES" shall mean each guaranty executed by any Guarantor, as amended or modified from time to time, which Guaranties shall be in form and substance acceptable to the Agent. "GUARANTORS" shall mean each present and future Subsidiary of the Company. "HAZARDOUS MATERIALS" includes, without limitation, any flammable explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances or related materials defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, ET SEQ.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, ET SEQ.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, ET SEQ.) and in the regulations adopted and publications promulgated pursuant thereto, or any other federal, state or local government law, ordinance, rule or regulation. "INDEBTEDNESS" of any Person shall mean, as of any date, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person as lessee under any Capital Lease, (c) all obligations which are secured by any Lien existing on any asset or property of such Person whether or not the obligation secured thereby shall have been assumed by such Person (to the extent of such Lien if such obligation is not assumed), (d) all obligations of such Person for the unpaid purchase price for goods, property or services acquired by such Person, except for trade accounts payable arising in the ordinary course of business that are not past due, (e) all obligations of such Person to purchase goods, property or services where payment therefor is required regardless of whether delivery of such goods or property or the performance of such services is ever made or tendered (generally referred to as "take or pay contracts"), (f) all liabilities of such Person in respect of Unfunded Benefit Liabilities under any Plan of such Person or of any ERISA Affiliate, (g) all obligations of such Person in respect of any interest rate or currency swap, rate cap or other similar transaction (valued in an amount equal to the highest -7- termination payment, if any, that would be payable by such Person upon termination for any reason on the date of determination), and (h) all Contingent Liabilities. "INTEREST EXPENSE" means, for any period, total interest and related expense (including, without limitation, that portion of any Capitalized Lease obligation attributable to interest expense in conformity with Generally Accepted Accounting Principles, amortization of debt discount, all capitalized interest, the interest portion of any deferred payment obligations, all commissions, discounts and other fees and charges owed with respect to letter of credit and bankers acceptance financing, the net costs and net payments under any interest rate hedging, cap or similar agreement or arrangement, prepayment charges, agency fees, administrative fees, commitment fees and capitalized transaction costs allocated to interest expense) paid, payable or accrued during such period, without duplication for any period, with respect to all outstanding Indebtedness of the Company or any of its Subsidiaries, all as determined for the Company and its Subsidiaries on a Consolidated basis. "INTEREST PAYMENT DATE" shall mean (a) with respect to any Fixed Rate Loan, the last day of each Interest Period with respect to such Fixed Rate Loan and, in the case of any Interest Period exceeding three months, those days that occur during such Interest Period at intervals of three months after the first day of such Interest Period, and (b) in all other cases, the last Business Day of each March, June, September and December occurring after the date hereof, commencing with the first such Business Day occurring after the date of this Agreement. "INTEREST PERIOD" shall mean any Eurodollar Interest Period or Negotiated Interest Period. "LETTER OF CREDIT" shall mean a standby letter of credit having a stated expiry date or a date upon which the draft must be reimbursed not later than twelve months after the date of issuance and not later than the fifth Business Day before the Termination Date B issued by the Agent on behalf of the Banks for the account of the Company under an application and related documentation acceptable to the Agent requiring, among other things, immediate reimbursement by the Company to the Agent in respect of all drafts or other demand for payment honored thereunder and all expenses paid or incurred by the Agent relative thereto. "LETTER OF CREDIT ADVANCE" shall mean any issuance of a Letter of Credit under Section 2.4 made pursuant to Section 2.1(b) in which each Bank acquires a pro rata risk participation pursuant to Section 2.4(d). "LETTER OF CREDIT DOCUMENTS" shall have the meaning ascribed thereto in Section 3.3(b). "LIEN" shall mean any pledge, assignment, hypothecation, mortgage, security interest, deposit arrangement, option, conditional sale or title retaining contract, sale and leaseback transaction, financing statement filing, lessor's or lessee's interest under any lease, subordination -8- of any claim or right, or any other type of lien, charge, encumbrance, preferential arrangement or other claim or right. "LOAN" shall mean any Revolving Credit A Loan and any Revolving Credit B Loan. Any such Loan or portion thereof may also be denominated as a Floating Rate Loan or a Eurodollar Rate Loan and such Loans are referred to herein as "types" of Loans. "LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Notes, the Guarantors and all agreements, instruments and documents executed pursuant thereto at any time. "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the business, assets, operations, prospects or condition (financial or otherwise) of the Company, or any Guarantor, (b) the ability of the Company to perform its obligations under any Loan Document, or (c) the validity or enforceability of any Loan Document or the rights or remedies of the Agent or the Banks under any Loan Document. "MULTIEMPLOYER PLAN" shall mean any "multiemployer plan" as defined in Section 4001(a)(3) of ERISA or Section 414(f) of the Code. "NEGOTIATED RATE" shall mean, with respect to any Negotiated Rate Loan, the rate per annum agreed upon between the Company and the Banks at the time such Negotiated Rate Loan is made. "NEGOTIATED INTEREST PERIOD" shall mean, with respect to any Negotiated Rate Loan, the period commencing on the day such Negotiated Rate Loan is made or converted to a negotiated Rate Loan and ending on the date agreed upon between the Company and the Banks at the time such Negotiated Rate Loan is made, and each subsequent period commencing on the last day of the immediately preceding Negotiated Interest Period and ending on the date agreed upon between the Company and the Banks at the time such Negotiated Rate Loan is elected to be continued as a Negotiated Rate Loan by the Company under Section 2.4 or 2.7, PROVIDED, HOWEVER, that no Negotiated Rate Interest Period which would end after the Termination Date A with respect to any Revolving Credit A Loan or after Termination Date B with respect to any Revolving Credit B Loan shall be permitted. "NEGOTIATED RATE LOAN" shall mean any Loan which bears interest at the Negotiated Rate. "NET INCOME" means, for any period, the Consolidated net income (or loss) of the Company and its Subsidiaries for such period taken as a single accounting period, determined in accordance with Generally Accepted Accounting Principles; PROVIDED that in determining Consolidated Net Income there shall be excluded, without duplication: (a) the income of any Person in which any Person other than the Company has a joint interest or partnership interest, except to the extent of the amount of dividends or other distributions actually paid to the Company by such Person during such period, (b) the proceeds of any insurance policy, (c) gains -9- from the sale, exchange, transfer or other disposition of property or assets not in the ordinary course of business of the Company and its Subsidiaries and related tax effects in accordance with Generally Accepted Accounting Principles, and (d) any other extraordinary or non-recurring gains of the Company or any of its Subsidiaries, and related tax effects in accordance with Generally Accepted Accounting Principles. "NET WORTH" of any Person shall mean, as of any date, the amount of any capital stock, paid in capital and similar equity accounts plus (or minus in the case of a deficit) the capital surplus and retained earnings of such Person and the amount of any foreign currency translation adjustment account shown as a capital account of such Person. "NOTE" shall mean any Revolving Credit A Note or any Revolving Credit B Note. "OVERDUE RATE" shall mean (a) in respect of principal of Floating Rate Loans, a rate per annum that is equal to the sum of three percent (3%) per annum plus the Floating Rate, (b) in respect of principal of Fixed Rate Loans, a rate per annum that is equal to the sum of three percent (3%) per annum plus the per annum rate in effect thereon until the end of the then current Fixed Interest Period for such Loan and, thereafter, a rate per annum that is equal to the sum of three percent (3%) per annum plus the Floating Rate, and (c) in respect of other amounts payable by the Company hereunder (other than interest), a per annum rate that is equal to the sum of three percent (3%) per annum plus the Floating Rate. "PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA. "PERMITTED LIENS" shall mean Liens permitted by Section 5.2(e) hereof. "PERSON" shall include an individual, a corporation, an association, a partnership, a trust or estate, a joint stock company, an unincorporated organization, a joint venture, a trade or business (whether or not incorporated), a government (foreign or domestic) and any agency or political subdivision thereof, or any other entity. "PLAN" shall mean, with respect to any Person, any pension plan (including a Multiemployer Plan) subject to Title IV of ERISA or to the minimum funding standards of Section 412 of the Code which has been established or maintained by such Person, any Subsidiary of such Person or any ERISA Affiliate, or by any other Person if such Person, any Subsidiary of such Person or any ERISA Affiliate could have liability with respect to such pension plan. "PRIME RATE" shall mean the per annum rate announced by the Agent from time to time as its "prime rate" (it being acknowledged that such announced rate may not necessarily be the lowest rate charged by the Agent to any of its customers); which Prime Rate shall change simultaneously with any change in such announced rate. -10- "PROHIBITED TRANSACTION" shall mean any transaction involving any Plan which is proscribed by Section 406 of ERISA or Section 4975 of the Code. "REPORTABLE EVENT" shall mean a reportable event as described in Section 4043(b) of ERISA including those events as to which the thirty (30) day notice period is waived under Part 2615 of the regulations promulgated by the PBGC under ERISA. "REQUIRED BANKS" shall mean Banks holding not less than (i) 66-2/3% percent of the aggregate principal amount of the Advances then outstanding or (ii) 66- 2/3% percent of the Commitments if no Advances are then outstanding. "REQUIREMENT OF LAW" shall mean as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon such Person or any of its property to which such Person or any of its property is subject. "REVOLVING CREDIT A LOAN" shall mean any borrowing under Section 2.4 evidenced by the Revolving Credit A Notes and made pursuant to Section 2.1(a). "REVOLVING CREDIT A ADVANCES" shall mean the Revolving Credit A Loans and the Letter of Credit Advances. "REVOLVING CREDIT A NOTE" shall mean any promissory note of the Company evidencing the Revolving Credit A Loans, in substantially the form annexed hereto as Exhibit A, as amended or modified from time to time and together with any promissory note or notes issued in exchange or replacement therefor. "REVOLVING CREDIT B LOAN" shall mean any borrowing under Section 2.4 evidenced by the Revolving Credit B Notes and made pursuant to Section 2.1(b). "REVOLVING CREDIT B NOTE" shall mean any promissory note of the Company evidencing the Revolving Credit B Loans, in substantially the form annexed hereto as Exhibit B, as amended or modified from time to time and together with any promissory note or notes issued in exchange or replacement therefor. "SUBSIDIARY" of any Person shall mean any other Person (whether now existing or hereafter organized or acquired) in which (other than directors qualifying shares required by law) at least a majority of the securities or other ownership interests of each class having ordinary voting power or analogous right (other than securities or other ownership interests which have such power or right only by reason of the happening of a contingency), at the time as of which any determination is being made, are owned, beneficially and of record, by such Person or by one -11- or more of the other Subsidiaries of such Person or by any combination thereof. Unless otherwise specified, reference to "Subsidiary" shall mean a Subsidiary of the Company. "TANGIBLE NET WORTH" of any Person shall mean, as of any date, (a) the Net Worth of such Person, less (b) the net book value of all items of the following character which are included in the assets of such Person to the extent they exceed 10% of the total assets of such Person: (i) goodwill, including, without limitation, the excess of cost over book value of any asset, (ii) organization or experimental expenses, (iii) unamortized debt discount and expense, (iv) patents, trademarks, trade names and copyrights, (v) treasury stock, (vi) deferred taxes and deferred charges, (vii) franchises, licenses and permits, and (viii) other assets which are deemed intangible assets under Generally Accepted Accounting Principles. "TERMINATION DATE A" shall mean the earlier to occur of (a) the date five years after the Effective Date or such later date as Termination Date A may be extended pursuant to Section 2.10 and (b) the date on which the Commitment shall be terminated pursuant to Section 2.2 or 6.2. "TERMINATION DATE B" shall mean the earlier to occur of (a) the date five years after the Effective Date or such later date as Termination Date B may be extended pursuant to Section 2.10 and (b) the date on which the Revolving Credit B Commitments shall be terminated pursuant to Section 2.2 or 6.2. "TOTAL CAPITALIZATION" shall mean the sum of the Consolidated Net Worth of the Company and its Subsidiaries plus the Funded Debt. "TOTAL LIABILITIES" of any Person shall mean, as of any date, all obligations which, in accordance with Generally Accepted Accounting Principles, are or should be classified as liabilities on a balance sheet of such Person and all Contingent Liabilities of such Person. "UNFUNDED BENEFIT LIABILITIES" shall mean, with respect to any Plan as of any date, the amount of the unfunded benefit liabilities determined in accordance with Section 4001(a)(18) of ERISA. 1.2 OTHER DEFINITIONS; RULES OF CONSTRUCTION. As used herein, the terms "AGENT", "BANKS", "COMPANY" and "THIS AGREEMENT" shall have the respective meanings ascribed thereto in the introductory paragraph of this Agreement. Such terms, together with the other terms defined in Section 1.1, shall include both the singular and the plural forms thereof and shall be construed accordingly. All computations required hereunder and all financial terms used herein shall be made or construed in accordance with Generally Accepted Accounting Principles unless such principles are inconsistent with the express requirements of this Agreement; PROVIDED that, if the Company notifies the Agent that the Company wishes to amend any covenant in Article V to eliminate the effect of any change in Generally Accepted Accounting Principles in the operation of such covenant (or if the Agent notifies the Company that the Required Banks wish to amend Article V for such purpose), then the Company's compliance with such covenant -12- shall be determined on the basis of Generally Accepted Accounting Principles in effect immediately before the relevant change in Generally Accepted Accounting Principles became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Company and the Required Banks. Use of the terms "HEREIN", "HEREOF", and "HEREUNDER" shall be deemed references to this Agreement in its entirety and not to the Section or clause in which such term appears. References to "SECTIONS" and "SUBSECTIONS" shall be to Sections and subsections, respectively, of this Agreement unless otherwise specifically provided. ARTICLE II THE COMMITMENTS AND THE ADVANCES 2.1 COMMITMENT OF THE BANKS. (a) REVOLVING CREDIT A. Each Bank agrees, for itself only, subject to the terms and conditions of this Agreement, to make Revolving Credit A Loans to the Company pursuant to Section 2.4 from time to time from and including the Effective Date to but excluding the Termination Date A, not to exceed in aggregate principal amount at any time outstanding the amount determined pursuant to Section 2.1(c). (b) REVOLVING CREDIT B LOANS AND LETTER OF CREDIT ADVANCES. Each Bank agrees, for itself only, subject to the terms and conditions of this Agreement, to make Revolving Credit B Loans to the Company pursuant to Section 2.4 and Section 3.3 and to participate in Letter of Credit Advances to Company pursuant to Section 2.4, from time to time from and including the Effective Date to but excluding the Termination Date B, not to exceed in aggregate principal amount at any time outstanding the amount determined pursuant to Section 2.1(c). (c) LIMITATION ON AMOUNT OF ADVANCES. Notwithstanding anything in this Agreement to the contrary, (i) the aggregate principal amount of the Revolving Credit A Loans made (A) by any Bank at any time outstanding shall not exceed the amount of its respective Revolving Credit A Commitment as of the date any such Advance is made and (B) by all Banks at any time outstanding shall not exceed the amount of Borrowing Base A, (ii) the aggregate principal amount of the Revolving Credit B Loans made and Letter of Credit Advances participated in (A) by any Bank at any time shall not exceed the amount of its respective Revolving Credit B Commitment as of the date any such Advance is made and (B) by all Banks at any time shall not exceed the amount of Borrowing Base, B, PROVIDED, HOWEVER, that the aggregate principal amount of Letter of Credit Advances outstanding at any time shall not exceed $3,000,000. 2.2 TERMINATION AND REDUCTION OF COMMITMENTS. (a) The Company shall have the right to terminate or reduce the Commitments at any time and from time to time at its option, PROVIDED that (i) the Company shall give notice of such termination or reduction to the Agent (with sufficient executed copies for each Bank) specifying the amount and effective date thereof, (ii) each partial reduction of the Commitments shall be in a minimum amount of $2,000,000 and -13- in an integral multiple of $2,000,000 and shall reduce the Commitments of all of the Banks proportionately in accordance with the respective commitment amounts for each such Bank set forth in the signature pages hereof next to name of each such Bank, (iii) no such termination or reduction shall be permitted with respect to any portion of the Commitments as to which a request for a Advance pursuant to Section 2.4 is then pending and (iv) the Revolving Credit A Commitments may not be terminated if any Revolving Credit A Advances are then outstanding and may not be reduced below the principal amount of Revolving Credit A Advances then outstanding and the Revolving Credit B Commitments may not be terminated if any Revolving Credit B Loans are then outstanding and may not be reduced below the principal amount of the Revolving Credit B Loans then outstanding. The Commitments or any portion thereof terminated or reduced pursuant to this Section 2.2, whether optional or mandatory, may not be reinstated. (b) For purposes of this Agreement, a Letter of Credit Advance (i) shall be deemed outstanding in an amount equal to the sum of the maximum amount available to be drawn under the related Letter of Credit on or after the date of determination and on or before the stated expiry date thereof plus the amount of any draws under such Letter of Credit that have not been reimbursed as provided in Section 3.3 and (ii) shall be deemed outstanding at all times on and before such stated expiry date or such earlier date on which all amounts available to be drawn under such Letter of Credit have been fully drawn, and thereafter until all related reimbursement obligations have been paid pursuant to Section 3.3. As provided in Section 3.3, upon each payment made by the Agent in respect of any draft or other demand for payment under any Letter of Credit, the amount of any Letter of Credit Advance outstanding immediately prior to such payment shall be automatically reduced by the amount of each Revolving Credit B Loan deemed advanced in respect of the related reimbursement obligation of the Company. 2.3 FEES. (a) The Company agrees to pay to each Bank a facility fee on the daily average amount of its respective Revolving Credit A Commitments and Revolving Credit B Commitments, for the period from the Effective Date to but excluding the relevant Termination Date at a rate equal to the Applicable Margin. Accrued facility fees shall be payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing on the first such Business Day occurring after the Effective Date, and on the Termination Date A and Termination Date B. (b) On or before the date of issuance of any Letter of Credit, the Company agrees (i) to pay to the Banks a fee computed at the rate of the Applicable Margin of the maximum amount available to be drawn from time to time under such Letter of Credit for the period from and including the date of issuance of such Letter of Credit to and including the stated expiry date of such Letter of Credit, and (ii) to pay an additional fee to the Agent for its own account computed at the rate of 0.125% per annum of such maximum amount for such period. Such fees are nonrefundable and the Company shall not be entitled to any rebate of any portion thereof if such Letter of Credit does not remain outstanding through its stated expiry date or for any other reason. The Company further agrees to pay to the Agent, on demand, such other customary administrative fees, charges and expenses of the Agent in respect of the issuance, negotiation, acceptance, amendment, transfer and payment of such Letter of Credit or otherwise -14- payable pursuant to the application and related documentation under which such Letter of Credit is issued. (c) The Company agrees to pay to the Agent such fees in such amounts as may from time to time be agreed upon by the Company and the Agent. 2.4 DISBURSEMENT OF ADVANCES. 0.0.0.0.1 The Company shall give the Agent notice of its request for each Advance in substantially the form of Exhibit C hereto not later than 10:00 a.m. Detroit time (i) three Eurodollar Business Days prior to the date such Advance is requested to be made if such Advance is to be made as a Eurodollar Rate Loan, (ii) five Business Days prior to the date any Letter of Credit Advance is requested to be made, and (iii) one Business Day prior to the date such Advance is requested to be made in all other cases, which notice shall specify whether a Revolving Credit A Loan or Revolving Credit B Loan is requested, whether a Eurodollar Rate Loan, a Negotiated Rate Loan or Floating Rate Loan or a Letter of Credit Advance is requested and, in the case of each requested Fixed Rate Loan, the Interest Period to be initially applicable to such Loan and, in the case of each Letter of Credit Advance, such information as may be necessary for the issuance thereof by the Agent. The Agent, not later than the Business Day next succeeding the day such notice is given, shall provide notice of such requested Advance to each Bank. Subject to the terms and conditions of this Agreement, the proceeds of each such requested Loan shall be made available to the Company by depositing the proceeds thereof in immediately available funds, in an account maintained and designated by the Company at the principal office of the Agent. Subject to the terms and conditions of this Agreement, the Agent shall, on the date any Letter of Credit Advance is requested to be made, issue the related Letter of Credit on behalf of the Banks for the account of the Company. Notwithstanding anything herein to the contrary, the Agent may decline to issue any requested Letter of Credit on the basis that the beneficiary, the purpose of issuance or the terms or the conditions of drawing are contrary to a policy of the Bank. (b) Each Bank, on the date any Borrowing in the form of a Loan is requested to be made, shall make its pro rata share of such Borrowing available in immediately available, freely transferable, cleared funds for disbursement to the Company pursuant to the terms and conditions of this Agreement at the principal office of the Agent. Unless the Agent shall have received notice from any Bank prior to the date such Borrowing is requested to be made under this Section 2.4 that such Bank will not make available to the Agent such Bank's pro rata portion of such Borrowing, the Agent may assume that such Bank has made such portion available to the Agent on the date such Borrowing is requested to be made in accordance with this Section 2.4. If and to the extent such Bank shall not have so made such pro rata portion available to the Agent, the Agent may (but shall not be obligated to) make such amount available to the Company, and such Bank and the Company severally agree to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date such amount is made available to the Company by the Agent until the date such amount is repaid to the Agent, at the Federal Funds Rate in the case of any Bank and at the interest rate applicable to such Advance in the case of the Company. If such Bank shall pay such amount to the Agent together with interest, such amount so paid shall constitute a Loan by such Bank as a part of such the -15- related Borrowing for purposes of this Agreement. The failure of any Bank to make its pro rata portion of any such Borrowing available to the Agent shall not relieve any other Bank of its obligations to make available its pro rata portion of such Borrowing on the date such Borrowing is requested to be made, but no Bank shall be responsible for failure of any other Bank to make such pro rata portion available to the Agent on the date of any such Borrowing. (c) All Revolving Credit A Loans made under this Section 2.4 shall be evidenced by the Revolving Credit A Notes and all Revolving Credit B Loans made under the Section 2.4 shall be evidenced by the Revolving Credit B Notes, and all such Loans shall be due and payable and bear interest as provided in Article III. Each Bank is hereby authorized by the Company to record on the schedule attached to the Notes, or in its books and records, the date, amount and type of each Loan and the duration of the related Eurodollar Interest Period (if applicable), the amount of each payment or prepayment of principal thereon, and the other information provided for on such schedule, which schedule or books and records, as the case may be, shall constitute prima facie evidence of the information so recorded, PROVIDED, HOWEVER, that failure of any Bank to record, or any error in recording, any such information shall not relieve the Company of its obligation to repay the outstanding principal amount of the Loans, all accrued interest thereon and other amounts payable with respect thereto in accordance with the terms of the Notes and this Agreement. Subject to the terms and conditions of this Agreement, the Company may borrow Revolving Credit Loans under this Section 2.4 and under Section 3.3, prepay Revolving Credit Loans pursuant to Section 3.1 and reborrow Revolving Credit Loans under this Section 2.4 and under Section 3.3. (d) Nothing in this Agreement shall be construed to require or authorize any Bank to issue any Letter of Credit, it being recognized that the Agent has the sole obligation under this Agreement to issue Letters of Credit on behalf of the Banks, and the Revolving Credit B Commitment of each Bank with respect to Letter of Credit Advances is expressly conditioned upon the Agent's performance of such obligations. Upon such issuance by the Agent, each Bank shall automatically acquire a pro rata risk participation interest in such Letter of Credit Advance based on the amount of its respective Revolving Credit B Commitment. If the Agent shall honor a draft or other demand for payment presented or made under any Letter of Credit, the Agent shall provide notice thereof to each Bank on the date such draft or demand is honored unless the Company shall have satisfied its reimbursement obligation under Section 3.3 by payment to the Agent on such date. Each Bank, on such date, shall make its pro rata share of the amount paid by the Agent available in immediately available funds at the principal office of the Agent for the account of the Agent. If and to the extent such Bank shall not have made such pro rata portion available to the Agent, such Bank and the Company severally agree to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date such amount was paid by the Agent until such amount is so made available to the Agent at a per annum rate equal to the Federal Funds Rate. If such Bank shall pay such amount to the Agent together with such interest, such amount so paid shall constitute a Revolving Credit B Loan by such Bank as part of the Revolving Credit B Borrowing disbursed in respect of the reimbursement obligation of the Company under Section 3.3 for purposes of this Agreement. The failure of any Bank to make its pro rata portion of any such amount paid by the Agent available -16- to the Agent shall not relieve any other Bank of its obligation to make available its pro rata portion of such amount, but no Bank shall be responsible for failure of any other Bank to make such pro rata portion available to the Agent. 2.5 CONDITIONS FOR FIRST DISBURSEMENT. The obligation of the Banks to2.5 make the first Advance hereunder is subject to receipt by each Bank and the Agent of the following documents and completion of the following matters, in form and substance satisfactory to each Bank and the Agent: (a) CHARTER DOCUMENTS. Certificates of recent date of the appropriate authority or official of the Company's and each Guarantor's state of incorporation (listing all charter documents on file in that office if such listing is available) and certifying as to the good standing and corporate existence of the Company and together with copies of such charter documents certified as of a recent date by such authority or official; (b) BY-LAWS AND CORPORATE AUTHORIZATIONS. Copies of the by-laws of the Company and each Guarantor and together with all authorizing resolutions and evidence of other corporate action taken by the Company and each Guarantor to authorize the execution, delivery and performance by the Company Guarantor of the Loan Documents and the consummation by the Company Guarantor of the transactions contemplated hereby, certified as true and correct as of the Effective Date by a duly authorized officer of the Company and each Guarantor; (c) INCUMBENCY CERTIFICATE. Certificates of incumbency of the Company and each Guarantor containing, and attesting to the genuineness of, the signatures of those officers authorized to act on behalf of the Company and each Guarantor in connection with the Loan Documents and the consummation by the Company and each Guarantor of the transactions contemplated hereby, certified as true and correct as of the Effective Date by a duly authorized officer of the Company and each Guarantor; (d) NOTES. The Notes duly executed on behalf of the Company for each Bank; (e) LEGAL OPINIONS. The favorable written opinion of counsel for the Company and the Guarantors in the form and substance acceptable to the Agent; (f) FEES. The fees required to be paid as of the Effective Date under Section 2.3; (g) INITIAL PUBLIC OFFERING. Evidence satisfactory to the Agent that the Company has completed an initial public offering of equity and received therefrom proceeds of at least $30,000,000, all on terms and conditions satisfactory to the Agent; (h) PAYMENT OF INDEBTEDNESS. Simultaneously with the first Advance hereunder, the Company shall have paid in full all indebtedness and liabilities outstanding -17- pursuant to the Loan Agreement between the Company, formerly known as New Creations, Inc., and NBD Bank, dated July 18, 1990, as amended, and any other indebtedness required by the Agent; (i) GUARANTIES. The Guaranties duly executed on behalf of each Guarantor; and (j) APPRAISALS. Appraisals, in form and substance and performed by an independent third party appraiser, acceptable to the Agent. 2.6 FURTHER CONDITIONS FOR DISBURSEMENT. The obligation of the Banks to make any Advance (including the first Advance), or any continuation or conversion under Section 2.7 is further subject to the satisfaction of the following conditions precedent: (a) The representations and warranties contained in Article IV hereof shall be true and correct on and as of the date such Advance is made (both before and after such Advance is made) as if such representations and warranties were made on and as of such date; (b) No Default or Event of Default shall exist or shall have occurred and be continuing on the date such Advance is made (whether before or after such Advance is made); (c) In the case of any Letter of Credit Advance, the Company shall have delivered to the Agent an application for the related Letter of Credit and other related documentation requested by and acceptable to the Agent appropriately completed and duly executed on behalf of the Company. The Company shall be deemed to have made a representation and warranty to the Banks at the time of the making of, and the continuation or conversion of, each Advance to the effects set forth in clauses (a) and (b) of this Section 2.6. For purposes of this Section 2.6 the representations and warranties contained in Section 4.6 hereof shall be deemed made with respect to both the financial statements referred to therein and the most recent financial statements delivered pursuant to Section 5.1(d)(ii) and (iii). 2.7 SUBSEQUENT ELECTIONS AS TO LOANS. The Company may elect (a) to continue a Fixed Rate Loan, or a portion thereof, as a Fixed Rate Loan or (b) to convert a Fixed Rate Loan, or a portion thereof, to a Loan of another type or (c) to convert a Floating Rate Loan, or a portion thereof, to a Fixed Rate Loan in each case by giving notice thereof to the Agent in substantially the form of Exhibit D hereto not later than 10:00 a.m. Detroit time four Eurodollar Business Days prior to the date any such continuation of or conversion to a Fixed Rate Loan is to be effective and not later than 10:00 a.m. Detroit time one Business Day prior to the date such continuation or conversion is to be effective in all other cases, PROVIDED that an outstanding Fixed Rate Loan may only be converted on the last day of the then current Interest Period with respect to such Loan, and PROVIDED, FURTHER, if a continuation of a Loan as, or a conversion of a Loan -18- to, a Fixed Rate Loan is requested, such notice shall also specify the Interest Period to be applicable thereto upon such continuation or conversion. The Agent, not later than the Business Day next succeeding the day such notice is given, shall provide notice of such election to the Banks. If the Company shall not timely deliver such a notice with respect to any outstanding Fixed Rate Loan, the Company shall be deemed to have elected to convert such Fixed Rate Loan to a Floating Rate Loan on the last day of the then current Interest Period with respect to such Loan. 2.8 LIMITATION OF REQUESTS AND ELECTIONS. Notwithstanding any other provision of this Agreement to the contrary, if, upon receiving a request for a Eurodollar Rate Loan pursuant to Section 2.4, or a request for a continuation of a Eurodollar Rate Loan as a Eurodollar Rate Loan of the then existing type, or a request for a conversion of a Floating Rate Loan to a Eurodollar Rate Loan pursuant to Section 2.7, (a) in the case of any Eurodollar Rate Loan, deposits in Dollars for periods comparable to the Eurodollar Interest Period elected by the Company are not available to any Bank in the London interbank market, or (b) the Eurodollar Rate will not adequately and fairly reflect the cost to any Bank of making, funding or maintaining the related Eurodollar Rate Loan, or (c) by reason of national or international financial, political or economic conditions or by reason of any applicable law, treaty or other international agreement, rule or regulation (whether domestic or foreign) now or hereafter in effect, or the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by any Bank with any guideline, request or directive of such authority (whether or not having the force of law), including without limitation exchange controls, it is impracticable, unlawful or impossible for, or shall limit or impair the ability of, (i) any Bank to make or fund the relevant Loan or to continue such Loan as a Loan of the then existing type or to convert a Loan to such a Loan or (ii) the Company to make or any Bank to receive any payment under this Agreement at the place specified for payment hereunder or to freely convert any amount paid into Dollars at market rates of exchange or to transfer any amount paid or so converted to the address of its principal office specified in Section 8.2, then the Company shall not be entitled, so long as such circumstances continue, to request a Loan of the affected type pursuant to Section 2.4 or a continuation of or conversion to a Loan of the affected type pursuant to Section 2.7. In the event that such circumstances no longer exist, the Banks shall again consider requests for Loans of the affected type pursuant to Section 2.4, and requests for continuations of and conversions to Loans of the affected type pursuant to Section 2.7. 2.9 MINIMUM AMOUNTS; LIMITATION ON NUMBER OF LOANS; ETC. Except for (a) Advances which exhaust the entire remaining amount of the Commitments, and (b) payments required pursuant to Section 3.1(c) or Section 3.8, each Advance and each continuation or conversion pursuant to Section 2.7 and each prepayment thereof shall be in a minimum amount of $100,000 in integral multiples of $100,000 in case of each Fixed Rate Loan, in the minimum amount of $25,000 in the case of Floating Rate Loans and in the minimum amount of $100,000 in the case of Letter of Credit Advances. -19- 2.10 EXTENSION OF TERMINATION DATES. Termination Date A and Termination Date B may be extended as set forth in this Section 2.10. (a) Notwithstanding anything contained in this Agreement to the contrary, not later than December 1 of each year, commencing December 1, 1997, the Company may, by delivery of a duly completed extension request to the Agent in the form of SCHEDULE 2.10 hereto (an "Extension Request"), irrevocably request that each Bank extend Termination Date B or Termination Date A for a one year period. (b) (i) The Agent shall, promptly after receipt of any such Extension Request pursuant to subsection (a) above, notify each Bank by providing them a copy of such Extension Request. (ii) Each Bank shall, on or before the first January 15 following receipt of the Extension Request notify the Agent whether it consents to the request of the Company set forth in such Extension Request, such consent to be in the sole discretion of such Bank. If any Bank does not so notify the Agent of its decision such Bank shall be deemed not to have consented to such request of the Company. (iii) The Agent shall promptly notify the Company which Banks have consented to such request (a "Consenting Bank"). If the Agent does not so notify the Company on or before the first January 31 following such Extension Request, the Agent shall be deemed to have notified the Company that the Banks have not consented to the Company's request. (iv) Each Bank that elects not to extend the requested Termination Date(s) or fails to so notify the Agent of such consent (a "Non- Consenting Bank") hereby agrees that if any other Bank or financial institution acceptable to the Company and the Agent offers to purchase such Non-Consenting Bank's Commitment(s) for a purchase price equal to the sum of all amounts then owing with respect to the Loans and all other amounts accrued for the account of such Non-Consenting Bank and any amounts which may become owing as a result of such purchase under Section 3.9, such Non-Consenting Bank will, promptly or upon the existing Termination Date(s) for such Non-Consenting Bank, as elected by the Company, assign, sell and transfer all of its right, title and obligations with respect to the foregoing to such other Bank or financial institution pursuant to and on the terms specified in the form of Assignment and Acceptance attached hereto as EXHIBIT E. (v) Notwithstanding anything herein to the contrary, the Termination Date(s) will not be extended if the aggregate Commitments of each Consenting Bank plus the additional Commitments of each Bank or other financial institution replacing any Non-Consenting Bank pursuant to clause (iv) above and agreeing to the Extension Request does not equal 100% of the then existing aggregate Commitments. If the Termination Date(s) are extended hereunder, it will not be extended for the Non-Consenting Banks, and each Non-Consenting Bank's Commitment(s) shall remain in effect and not be terminated until the -20- Termination Date(s) that is then in effect for it subject to the purchase of such Non-Consenting Bank's Commitment pursuant to clause (iv) above. ARTICLE III. PAYMENTS AND PREPAYMENTS OF ADVANCES 3.1 PRINCIPAL PAYMENTS AND PREPAYMENTS. (a) Unless earlier payment is required under this Agreement (i) the Company shall pay to the Banks on the Termination Date A the entire outstanding principal amount of the Revolving Credit A Advances, and (ii) the Company shall pay the Banks on the Termination Date B the entire outstanding principal amount of the Revolving Credit B Loans. (b) The Company may at any time and from time to time prepay all or a portion of the Loans, without premium or penalty, PROVIDED that (i) the Company may not prepay any portion of any Loan as to which an election for a continuation of or a conversion to a Fixed Rate Loan is pending pursuant to Section 2.4, and (ii) unless earlier payment is required under this Agreement, any Fixed Rate Loan may only be prepaid on the last day of the then current Interest Period with respect to such Loan. Upon the giving of such notice, the aggregate principal amount of such Loan or portion thereof so specified in such notice, together with such accrued interest and other amounts, shall become due and payable on the specified prepayment date. (c) Anytime that the aggregate principal balance outstanding under Revolving Credit A Note exceeds Borrowing Base A, the Company shall prepay Revolving Credit A Note by an amount equal to such excess. Anytime the sum of the aggregate principal balance outstanding under Revolving Credit B Note plus the aggregate principal amount of all outstanding Letters of Credit exceeds Borrowing Base B, the Company shall prepay Revolving Credit B Note by an amount equal to such excess, and, if a deficiency still remains after Revolving Credit B Note has been paid in full, the Company will provide cash collateral in a manner and by written agreement satisfactory to the Agent to secure the outstanding Letters of Credit in an amount equal to the remaining deficiency. 3.2 INTEREST PAYMENTS. The Company shall pay interest to the Banks on the unpaid principal amount of each Loan, for the period commencing on the date such Loan is made until such Loan is paid in full, on each Interest Payment Date and at maturity (whether at stated maturity, by acceleration or otherwise), and thereafter on demand, at the following rates per annum: (a) During such periods that such Loan is a Floating Rate Loan, the Floating Rate. -21- (b) During such periods that such Loan is a Eurodollar Rate Loan, the Eurodollar Rate applicable to such Loan for each related Eurodollar Interest Period. (c) During such periods that such Loan is a Negotiated Rate Loan, the Negotiated Rate applicable to such Loan for each related Negotiated Interest Period. Notwithstanding the foregoing paragraphs (a), (b) and (c), the Company shall pay interest on demand by the Agent at the Overdue Rate on the outstanding principal amount of any Loan and any other amount payable by the Company hereunder (other than interest) at any time on or after an Event of Default if required in writing by the Required Banks. 3.3 LETTER OF CREDIT REIMBURSEMENT PAYMENTS. (a) (i) The Company agrees to pay to the Banks, on the day on which the Agent shall honor a draft or other demand for payment presented or made under any Letter of Credit, an amount equal to the amount paid by the Agent in respect of such draft or other demand under such Letter of Credit and all expenses paid or incurred by the Agent relative thereto. Unless the Company shall have made such payment to the Banks on such day, upon each such payment by the Agent, the Agent shall be deemed to have disbursed to the Company, and the Company shall be deemed to have elected to satisfy its reimbursement obligation by, a Revolving Credit B Loan bearing interest at the Floating Rate for the account of the Banks in an amount equal to the amount so paid by the Agent in respect of such draft or other demand under such Letter of Credit. Such Revolving Credit B Loan shall be disbursed notwithstanding any failure to satisfy any conditions for disbursement of any Loan set forth in Article II hereof and, to the extent of the Revolving Credit B Loan so disbursed, the reimbursement obligation of the Company under this Section 3.3 shall be deemed satisfied; PROVIDED, HOWEVER, that nothing in this Section 3.3 shall be deemed to constitute a waiver of any Default or Event of Default caused by the failure to the conditions for disbursement or otherwise. (ii) If, for any reason (including without limitation as a result of the occurrence of an Event of Default with respect to the Company pursuant to Section 6.1(h)), Floating Rate Loans may not be made by the Banks as described in Section 3.3(a)(i), then (A) the Company agrees that each reimbursement amount not paid pursuant to the first sentence of Section 3.3(a)(i) shall bear interest, payable on demand by the Agent, at the interest rate then applicable to Floating Rate Loans, and (B) effective on the date each such Floating Rate Loan would otherwise have been made, each Bank severally agrees that it shall unconditionally and irrevocably, without regard to the occurrence of any Default or Event of Default, in lieu of deemed disbursement of Loans, to the extent of such Bank's Revolving Credit B Commitment, purchase a participating interest in each reimbursement amount. Each Bank will immediately transfer to the Agent, in same day funds, the amount of its participation. Each Bank shall share on a pro rata basis (calculated by reference to its Revolving Credit B Commitment) in any interest which accrues thereon and in all repayments thereof. If and to the extent that any Bank shall not have so made the amount of such participating interest available to the Agent, such Bank and the Company severally agree to pay to the Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Agent until the date -22- such amount is paid to the Agent, at (x) in the case of the Company, the interest rate then applicable to Floating Rate Loans and (y) in the case of such Bank, the Federal Funds Rate. (b) The reimbursement obligation of the Company under this Section 3.3 shall be absolute, unconditional and irrevocable and shall remain in full force and effect until all obligations of the Company to the Banks hereunder shall have been satisfied, and such obligations of the Company shall not be affected, modified or impaired upon the happening of any event, including without limitation, any of the following, whether or not with notice to, or the consent of, the Company: (i) Any lack of validity or enforceability of any Letter of Credit or any documentation relating to any Letter of Credit or to any transaction related in any way to such Letter of Credit (the "Letter of Credit Documents"); (ii) Any amendment, modification, waiver, consent, or any substitution, exchange or release of or failure to perfect any interest in collateral or security, with respect to any of the Letter of Credit Documents; (iii) The existence of any claim, setoff, defense or other right which the Company may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or any such transferee may be acting), the Agent or any Bank or any other Person or entity, whether in connection with any of the Letter of Credit Documents, the transactions contemplated herein or therein or any unrelated transactions; (iv) Any draft or other statement or document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (v) Payment by the Agent to the beneficiary under any Letter of Credit against presentation of a documents which do not comply with the terms of the Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit; (vi) Any failure, omission, delay or lack on the part of the Agent or any Bank or any party to any of the Letter of Credit Documents to enforce, assert or exercise any right, power or remedy conferred upon the Agent, any Bank or any such party under this Agreement or any of the Letter of Credit Documents, or any other acts or omissions on the part of the Agent, any Bank or any such party; (vii) Any other event or circumstance that would, in the absence of this clause, result in the release or discharge by operation of law or otherwise of the Company from the performance or observance of any obligation, covenant or agreement contained in this Section 3.3. -23- No setoff, counterclaim, reduction or diminution of any obligation or any defense of any kind or nature which the Company has or may have against the beneficiary of any Letter of Credit shall be available hereunder to the Company against the Agent or any Bank. Nothing in this Section 3.3 shall limit the liability, if any, of the Banks to the Company pursuant to Section 8.5. 3.4 PAYMENT METHOD. (a) All payments to be made by the Company hereunder will be made to the Agent for the account of the Banks in Dollars and in immediately available, freely transferable, cleared funds not later than 1:00 p.m. at the principal office of the Agent specified in Section 8.2. Payments received after 1:00 p.m. at the place for payment shall be deemed to be payments made prior to 1:00 p.m. at the place for payment on the next succeeding Business Day. The Company hereby authorizes the Agent to charge its account with the Agent in order to cause timely payment of amounts due hereunder to be made (subject to sufficient funds being available in such account for that purpose). (b) At the time of making each such payment, the Company shall, subject to the other terms and conditions of this Agreement, specify to the Agent that Loan or other obligation of the Company hereunder to which such payment is to be applied. In the event that the Company fails to so specify the relevant obligation or if an Event of Default shall have occurred and be continuing, the Agent may apply such payments as it may determine in its sole discretion. (c) On the day such payments are deemed received, the Agent shall remit to the Banks their pro rata shares of such payments in immediately available funds to the Banks at their respective address in the United States specified for notices pursuant to Section 8.2. In the case of payments of principal and interest on any Borrowing, such pro rata shares shall be determined with respect to each such Bank by the ratio which the outstanding principal balance of its Loan included in such Borrowing bears to the outstanding principal balance of the Loans of all of the Banks included in such Borrowing, and in the case of fees paid pursuant to Section 2.3 and other amounts payable hereunder (other than the Agent's fees payable pursuant to Section 2.3(d) and amounts payable to any Bank under Section 3.7), such pro rata shares shall be determined with respect to each such Bank by the ratio which the Commitment of such Bank bears to the Commitments of all the Banks. 3.5 NO SETOFF OR DEDUCTION. All payments of principal of and interest on the Loans and other amounts payable by the Company hereunder shall be made by the Company without setoff or counterclaim, and, subject to the next succeeding sentence, free and clear of, and without deduction or withholding for, or on account of, any present or future taxes, levies, imposts, duties, fees, assessments, or other charges of whatever nature, imposed by any governmental authority, or by any department, agency or other political subdivision or taxing authority. If any such taxes, levies, imposts, duties, fees, assessments or other charges are imposed, the Company will pay such additional amounts as may be necessary so that payment of principal of and interest on the Loans and other amounts payable hereunder, after withholding or deduction for or on account thereof, will not be less than any amount provided to be paid hereunder and, in any such case, the Company will furnish to the Banks certified copies of all -24- tax receipts evidencing the payment of such amounts within 45 days after the date any such payment is due pursuant to applicable law. 3.6 PAYMENT ON NON-BUSINESS DAY; PAYMENT COMPUTATIONS. Except as otherwise provided in this Agreement to the contrary, whenever any installment of principal of, or interest on, any Loan or any other amount due hereunder becomes due and payable on a day which is not a Business Day, the maturity thereof shall be extended to the next succeeding Business Day and, in the case of any installment of principal, interest shall be payable thereon at the rate per annum determined in accordance with this Agreement during such extension. Computations of interest and other amounts due under this Agreement shall be made on the basis of a year of 360 days for the actual number of days elapsed, including the first day but excluding the last day of the relevant period. 3.7 ADDITIONAL COSTS. 0.0.0.0.1 In the event that any applicable law, treaty or other international agreement, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to any Bank or the Agent, or any interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by any Bank or the Agent with any guideline, request or directive of any such authority (whether or not having the force of law), shall (a) affect the basis of taxation of payments to any Bank or the Agent of any amounts payable by the Company under this Agreement (other than taxes imposed on the overall net income of any Bank or the Agent, by the jurisdiction, or by any political subdivision or taxing authority of any such jurisdiction, in which any Bank or the Agent, as the case may be, has its principal office), or (b) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by any Bank or the Agent, or (c) shall impose any other condition with respect to this Agreement, or any of the Commitments, the Notes or the Loans or any Letter of Credit, and the result of any of the foregoing is to increase the cost to any Bank or the Agent, as the case may be, of making, funding or maintaining any Fixed Rate Loan or any Letter of Credit or to reduce the amount of any sum receivable by any Bank or the Agent, as the case may be, thereon, then the Company shall pay to such Bank or the Agent, as the case may be, from time to time, upon request by such Bank (with a copy of such request to be provided to the Agent) or the Agent, additional amounts sufficient to compensate such Bank or the Agent, as the case may be, for such increased cost or reduced sum receivable to the extent, in the case of any Fixed Rate Loan, such Bank or the Agent is not compensated therefor in the computation of the interest rate applicable to such Fixed Rate Loan. A statement as to the amount of such increased cost or reduced sum receivable, prepared in good faith and in reasonable detail by such Bank or the Agent, as the case may be, and submitted by such Bank or the Agent, as the case may be, to the Company, shall be conclusive and binding for all purposes absent manifest error in computation. (b) In the event that any applicable law, treaty or other international agreement, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to any Bank or the Agent, or any interpretation or administration thereof by any governmental authority charged with the interpretation or -25- administration thereof, or compliance by any Bank or the Agent with any guideline, request or directive of any such authority (whether or not having the force of law), including any risk-based capital guidelines, affects or would affect the amount of capital required or expected to be maintained by such Bank or the Agent (or any corporation controlling such Bank or the Agent) and such Bank or the Agent, as the case may be, determines that the amount of such capital is increased by or based upon the existence of such Bank's or the Agent's obligations hereunder and such increase has the effect of reducing the rate of return on such Bank's or the Agent's (or such controlling corporation's) capital as a consequence of such obligations hereunder to a level below that which such Bank or the Agent (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy), then the Company shall pay to such Bank or the Agent, as the case may be, from time to time, upon request by such Bank (with a copy of such request to be provided to the Agent) or the Agent, additional amounts sufficient to compensate such Bank or the Agent (or such controlling corporation) for any increase in the amount of capital and reduced rate of return which such Bank or the Agent reasonably determines to be allocable to the existence of such Bank's or the Agent's obligations hereunder. A statement as to the amount of such compensation, prepared in good faith and in reasonable detail by such Bank or the Agent, as the case may be, and submitted by such Bank or the Agent to the Company, shall be conclusive and binding for all purposes absent manifest error in computation. Such Bank or the Agent may, at its option, specify that such amounts be paid by way of an increase in the commitment fees payable by the Company pursuant to Section 2.3(a). 3.8 ILLEGALITY AND IMPOSSIBILITY. In the event that any applicable law, treaty or other international agreement, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to any Bank, or any interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by any Bank with any guideline, request or directive of such authority (whether or not having the force of law), including without limitation exchange controls, shall make it unlawful or impossible for any Bank to maintain any Loan under this Agreement, (b) shall make it impracticable, unlawful or impossible for, or shall in any way limit or impair ability of, the Company to make or any Bank to receive any payment under this Agreement at the place specified for payment hereunder, the Company shall upon receipt of notice thereof from such Bank, repay in full the then outstanding principal amount of each Loan so affected, together with all accrued interest thereon to the date of payment and all amounts owing to such Bank under Section 3.8, (a) on the last day of the then current Eurodollar Interest Period applicable to such Loan if such Bank may lawfully continue to maintain such Loan to such day, or (b) immediately if such Bank may not continue to maintain such Loan to such day. 3.9 INDEMNIFICATION. If the Company makes any payment of principal with respect to any Fixed Rate Loan on any other date than the last day of the Interest Period applicable thereto (whether pursuant to Section 3.1(c), Section 3.7, Section 6.2 or otherwise), or if the Company fails to borrow any Fixed Rate Loan after notice has been given to the Banks in accordance with Section 2.4, or if the Company fails to make any payment of principal or interest in respect of a Fixed Rate Loan when due, the Company shall reimburse each Bank on demand -26- for any resulting loss or expense incurred by each such Bank, including without limitation any loss incurred in obtaining, liquidating or employing deposits from third parties, whether or not such Bank shall have funded or committed to fund such Loan. A statement as to the amount of such loss or expense, prepared in good faith and in reasonable detail by such Bank and submitted by such Bank to the Company, shall be conclusive and binding for all purposes absent manifest error in computation. Calculation of all amounts payable to such Bank under this Section 3.9 shall be made as though such Bank shall have actually funded or committed to fund the relevant Fixed Rate Loan through the purchase of an underlying deposit in an amount equal to the amount of such Loan in the relevant market and having a maturity comparable to the related Interest Period; PROVIDED, HOWEVER, that such Bank may fund any Fixed Rate Loan in any manner it sees fit and the foregoing assumption shall be utilized only for the purpose of calculation of amounts payable under this Section 3.9. ARTICLE IV. REPRESENTATIONS AND WARRANTIES The Company represents and warrants to the Banks and the Agent that: 4.1 CORPORATE EXISTENCE AND POWER. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio, and is duly qualified to do business, and is in good standing, in all additional jurisdictions where such qualification is necessary under applicable law, except where the failure to be so qualified would not have a Material Adverse Effect. The Company and each Guarantor has all requisite corporate power to own or lease the properties used in its business and to carry on its business as now being conducted and as proposed to be conducted, and to execute and deliver the Loan Documents to which it is a party and to engage in the transactions contemplated by the Loan Documents. 4.2 CORPORATE AUTHORITY. The execution, delivery and performance by the Company and each Guarantor of the Loan Documents have been duly authorized by all necessary corporate action and are not in contravention of any law, rule or regulation, or any judgment, decree, writ, injunction order or award of any arbitrator, court or governmental authority, or of the terms of the Company's or any Guarantor's charter or by-laws, or of any contract or undertaking to which the Company or any Guarantor is a party or by which the Company or any Guarantor or their respective property may be bound or affected or result in the imposition of any Lien except for Permitted Liens. 4.3 BINDING EFFECT. Each Loan Document to which it is a party is the legal, valid and binding obligation of the Company and each Guarantor enforceable against the Company and each Guarantor in accordance with their respective terms. 4.4 SUBSIDIARIES. SCHEDULE 4.4 hereto correctly sets forth the corporate name, jurisdiction of incorporation and ownership of each Subsidiary of the Company. Each such -27- Subsidiary and each corporation becoming a Subsidiary of the Company after the date hereof is and will be a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and is and will be duly qualified to do business in each additional jurisdiction where such qualification is or may be necessary under applicable law, except where the failure to be so qualified would not have a Material Adverse Effect. Each Subsidiary of the Company has and will have all requisite corporate power to own or lease the properties used in its business and to carry on its business as now being conducted and as proposed to be conducted. All outstanding shares of capital stock of each class of each Subsidiary of the Company have been and will be validly issued and are and will be fully paid and nonassessable and, except as otherwise indicated in SCHEDULE 4.4 hereto or disclosed in writing to the Bank from time to time, are and will be owned, beneficially and of record, by the Company or another Subsidiary of the Company free and clear of any Liens, except for Permitted Liens. 4.5 LITIGATION. Except as set forth in SCHEDULE 4.5 hereto, there is no action, suit or proceeding pending or, to the best of the Company's knowledge, threatened against or affecting the Company or any of its Subsidiaries before or by any court, governmental authority or arbitrator, which if adversely decided might result, either individually or collectively, in any Material Adverse Effect and, to the best of the Company's knowledge, there is no basis for any such action, suit or proceeding. 4.6 FINANCIAL CONDITION. The Consolidated balance sheet of the Company and its Subsidiaries and the Consolidated statements of income, and cash flow of the Company and its Subsidiaries for the fiscal year ended September 30, 1995 and reported on by Ernst & Young LLP, independent certified public accountants, and the interim Consolidated balance sheet and interim Consolidated statements of income, and cash flow of the Company and its Subsidiaries, as of or for the six month period ended on March 31, 1996, copies of which have been furnished to the Banks, fairly present, and the financial statements of the Company and its Subsidiaries delivered pursuant to Section 5.1(d) will fairly present, the Consolidated financial position of the Company and its Subsidiaries as at the respective dates thereof, and the Consolidated results of the operations of the Company and its Subsidiaries for the respective periods indicated, all in accordance with Generally Accepted Accounting Principles consistently applied (subject, in the case of said interim statements, to year-end audit adjustments and the absence of footnotes). There has been no Material Adverse Effect since September 30, 1995. There is no material Contingent Liability of the Company or any of its Subsidiaries that is not reflected in such financial statements or in the notes thereto. All Contingent Liabilities of the Company and its Subsidiaries as of the Effective Date are listed on Schedule 4.6 hereto. 4.7 USE OF LOANS. The Company will use the proceeds of the Revolving Credit A Loans to pay off the indebtedness described in Section 2.5(h), to make acquisitions and to purchase aircraft and other equipment and shall use the proceeds of the Revolving Credit B Loans for working capital and other general corporate purposes. Neither the Company nor any of its Subsidiaries extends or maintains, in the ordinary course of business, credit for the purposes, whether immediate, incidental, or ultimate, of buying or carrying margin stock (within the -28- meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Loan will be used for the purpose, whether immediate, incidental, or ultimate, of buying or carrying any such margin stock or maintaining or extending credit to others for such purpose. After applying the proceeds of each Loan, such margin stock will not constitute more than 25% of the value of the assets (either of the Company alone or of the Company and its Subsidiaries on a Consolidated basis) that are subject to any provisions of this Agreement that may cause the Advances to be deemed secured, directly or indirectly, by margin stock. 4.8 CONSENTS, ETC. No consent, approval or authorization of or declaration, registration or filing with any governmental authority or any nongovernmental Person or entity, including without limitation any creditor, lessor or stockholder of the Company or any of its Subsidiaries, is required on the part of the Company in connection with the execution, delivery and performance of the Loan Documents or the transactions contemplated hereby or as a condition to the legality, validity or enforceability of the Loan Documents. 4.9 TAXES. The Company and its Subsidiaries have filed all tax returns (federal, state and local) required to be filed and have paid all taxes shown thereto to be due, including interest and penalties, or have established adequate financial reserves on their respective books and records for payment thereof. Neither the Company nor any of its Subsidiaries knows of any actual or proposed tax assessment or any basis therefor, and no extension of time for the assessment of deficiencies in any federal or state tax has been granted by the Company or any Subsidiary. 4.10 TITLE TO PROPERTIES. Except as otherwise disclosed in the latest year end balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this Agreement, the Company or one or more of its Subsidiaries have good and marketable fee simple title to all of the real property, and a valid and indefeasible ownership interest in all of the other properties and assets reflected in said balance sheet or subsequently acquired by the Company or any Subsidiary. All of such properties and assets are free and clear of any Lien, except for Permitted Liens. 4.11 ERISA. The Company, its Subsidiaries, their ERISA affiliates and their respective Plans are in compliance in all material respects with those provisions of ERISA and of the Code which are applicable with respect to any Plan. No Prohibited Transaction and no Reportable Event has occurred with respect to any such Plan. None of the Company, any of its Subsidiaries or any of their ERISA Affiliates is an employer with respect to any Multiemployer Plan. The Company, its Subsidiaries and their ERISA Affiliates have met the minimum funding requirements under ERISA and the Code with respect to each of their respective Plans, if any, and have not incurred any liability to the PBGC of any Plan. The execution, delivery and performance of this Agreement the Notes does not constitute a Prohibited Transaction. There is no material unfunded benefit liability, determined in accordance with Section 4001(a)(18) of ERISA, with respect to any Plan of the Company, its Subsidiaries or their ERISA Affiliates. -29- 4.12 ENVIRONMENTAL AND SAFETY MATTERS. The Company and each Subsidiary is in substantial compliance with all material federal, state and local laws, ordinances and regulations relating to safety and industrial hygiene or to the environmental condition, including without limitation all Environmental Laws in jurisdictions in which the Company or any Subsidiary owns or operates, or has owned or operated, a facility or site, or arranges or has arranged for disposal or treatment of hazardous substances, solid waste, or other wastes, accepts or has accepted for transport any hazardous substances, solid wastes or other wastes or holds or has held any interest in real property or otherwise. Except as disclosed on SCHEDULE 4.12, no demand, claim, notice, suit, suit in equity, action, administrative action, investigation or inquiry whether brought by any governmental authority, private Person or entity or otherwise, arising under, relating to or in connection with any Environmental laws is pending or threatened against the Company or any of its Subsidiaries, any real property in which the Company or any such Subsidiary holds or has held an interest or any past or present operation of the Company or any Subsidiary. Neither the Company nor any of its Subsidiaries (a) is the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any toxic substances, radioactive materials, hazardous wastes or related materials into the environment, (b) has received any notices of any toxic substances, radioactive materials, hazardous waste or related materials in, or upon any of its properties in violation of any Environmental Laws, or (c) knows of any basis for such investigation, notice or violation, except as disclosed on SCHEDULE 4.12 hereto, and as to such matters disclosed on such Schedule, none will have a Material Adverse Effect. Except as disclosed on SCHEDULE 4.12, to the best of the knowledge of the Company after due inquiry, no release, threatened release or disposal of hazardous waste, solid waste or other wastes is occurring or has occurred on, under or to any real property in which the Company or any of its Subsidiaries holds any interest or performs any of its operations, in violation of any Environmental Law. 4.13 NO DEFAULT. Neither the Company nor any Subsidiary is in default or has received any written notice of default under or with respect to any of its Contractual Obligations in any respect which could have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 4.14 NO BURDENSOME RESTRICTIONS. No Requirement of Law or Contractual Obligation applicable to the Company or any Subsidiary could have a Material Adverse Effect on the financial condition or business of the Company and its Subsidiaries. 4.15 INITIAL PUBLIC OFFERING. The Company has completed an initial public offering of equity and, 100% of the proceeds of such initial public offering, net only of reasonable costs and expenses incurred in connection therewith and a payment to Don Wright or a trust established by him for certain equity interests in the Company in an amount not to exceed $29,900,000, which net amount is equal to or greater than $30,000,000. 4.16 FAA CERTIFICATIONS. The Company is, and at all times will be a "Citizen of the United States" as defined in Section 40102(a)(15) of 490 U.S.C., an air carrier as to which -30- the provisions of Section 1110 of the United States Bankruptcy Code apply, and an air carrier certificated under Sections 41102(a) and 44705 of 49 U.S.C. 4.17 AIRWORTHINESS CERTIFICATES. An airworthiness certificate has been duly issued for each of the aircraft of the Company, all such airworthiness certificates are in full force and effect, each aircraft is in such operating condition, except for such repairs and maintenance in the ordinary course of business, as may be required to permit each such aircraft to be utilized in commercial charter operations and otherwise in material compliance with all applicable laws and regulations. ARTICLE V COVENANTS 5.1 AFFIRMATIVE COVENANTS. The Company covenants and agrees that, until the later of Termination Date A or Termination Date B and thereafter until payment in full of the principal of and accrued interest on the Notes and the payment and performance of all other obligations and liabilities of the Company under the Loan Documents, unless the Required Banks shall otherwise consent in writing, it shall, and shall cause each of its Subsidiaries to: (a) PRESERVATION OF CORPORATE EXISTENCE, ETC. Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and its qualification as a foreign corporation in good standing in each jurisdiction in which such qualifications is necessary under applicable law, except where the failure to be so qualified would not have a Material Adverse Effect and the rights, licenses, permits (including those required under Environmental Laws and those required by the FAA), franchises, patents, copyrights, trademarks and trade names material to the conduct of its businesses; and defend all of the foregoing against all claims, actions, demands, suits or proceedings at law or in equity or by or before any governmental instrumentality or other agency or regulatory authority. (b) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with all applicable laws, rules, regulations and orders of any governmental authority, whether federal, state, local or foreign (including without limitation ERISA, the Code, FAA regulations and Environmental Laws), in effect from time to time, except where the failure to so comply would not have a Material Adverse Effect; and pay and discharge promptly when due all taxes, assessments and governmental charges or levies imposed upon it or upon its income, revenues or property, before the same shall become delinquent or in default, as well as all lawful claims for labor, materials and supplies or otherwise, which, if unpaid, might give rise to Liens upon such properties or any portion thereof, except to the extent that payment of any of the foregoing is then being contested in good faith by appropriate legal proceedings and with respect to which adequate financial reserves have been established on the books and records of the Company or such Subsidiary. -31- (c) MAINTENANCE OF PROPERTIES; INSURANCE. Maintain, preserve and protect all property that is material to the conduct of the business, as such business exists from time to time, of the Company or any of its Subsidiaries and keep such property in good repair, working order and condition and from time to time make, or cause to be made all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times in accordance with customary and prudent business practices for similar businesses; and maintain in full force and effect insurance with responsible and reputable insurance companies or associations in such amounts, on such terms and covering such risks, including fire and other risks insured against by extended coverage, with such deductibles and self insurance amounts as is usually carried by companies engaged in similar businesses and of similar sizes and owning similar properties similarly situated and maintain in full force and effect public liability insurance, insurance against claims for Personal injury or death or property damage occurring in connection with any of its activities or any of any properties owned, occupied or controlled by it, in such amount as it shall reasonably deem necessary, and maintain such other insurance as may be required by law or as may be reasonably requested by the Required Banks for purposes of assuring compliance with this Section 5.1(c). (d) REPORTING REQUIREMENTS. Furnish to the Banks and the Agent the following: (i) Promptly and in any event within three calendar days after becoming aware of the occurrence of (A) any Event of Default or any event or condition which, with notice or lapse of time, or both, would constitute an Event of Default, (B) the commencement of any material litigation against, by or affecting the Company or any of its Subsidiaries, and any material developments therein, (C) entering into any material contract or undertaking that is not entered into in the ordinary course of business, (D) any formal investigation or enforcement action by the FAA, or by (E) any development in the business or affairs of the Company or any of its Subsidiaries which has resulted in or which is likely in the reasonable judgment of the Company, to result in a Material Adverse Effect, a statement of the chief financial officer or controller of the Company setting forth details of such Event of Default or such event or condition or such litigation and the action which the Company or such Subsidiary, as the case may be, has taken and proposes to take with respect thereto; (ii) As soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, the Consolidated and consolidating balance sheet of the Company and its Subsidiaries as of the end of such quarter, and the related Consolidated and consolidating statements of income for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the chief financial officer or controller of the Company as having been prepared in accordance with Generally Accepted Accounting Principles, together with a certificate of the chief financial officer or controller of the Company stating (A) -32- that no Event of Default or Default has occurred and is continuing or, if an Event of Default or Default has occurred and is continuing, a statement setting forth the details thereof and the action which the Company has taken and proposes to take with respect thereto, (B) that a computation (which computation shall accompany such certificate and shall be in reasonable detail) showing compliance with Section 5.2(a), (b), (c) and (d) hereof is in conformity with the terms of this Agreement, and (C) that there have been no substantive changes in Schedule 4.12; (iii) As soon as available and in any event within 90 days after the end of each fiscal year of the Company, a copy of the Consolidated and consolidating balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and the related Consolidated and consolidating statements of income and the Consolidated statement of cash flow of the Company and its Subsidiaries for such fiscal year, with a customary audit report of Ernst & Young LLP, or other independent certified public accountants selected by the Company and acceptable to the Required Banks, without qualifications unacceptable to the Required Banks, together with a certificate of such accountants stating that they have reviewed this Agreement and stating further whether, in the course of their review of such financial statements, they have become aware of any Event of Default or any Default, and together with a computation by the Company (which computation shall accompany such certificate and shall be in reasonable detail) showing compliance with Section 5.2 (a), (b), (c) and (d) hereof is in conformity with the terms of this Agreement; (iv) Promptly after the sending or filing thereof, copies of all reports, proxy statements and financial statements which the Company or any of its Subsidiaries sends to or files with any of their respective security holders or any securities exchange or the Securities and Exchange Commission or any successor agency thereof; (v) Promptly and in any event within 10 calendar days after receiving or becoming aware thereof (A) a copy of any notice of intent to terminate any Plan of the Company, its Subsidiaries or any ERISA Affiliate filed with the PBGC, (B) a statement of the chief financial officer or controller of the Company setting forth the details of the occurrence of any Reportable Event with respect to any such Plan, (C) a copy of any notice that the Company, any of its Subsidiaries or any ERISA Affiliate may receive from the PBGC relating to the intention of the PBGC to terminate any such Plan or to appoint a trustee to administer any such Plan, or (D) a copy of any notice of failure to make a required installment or other payment within the meaning of Section 412(n) of the Code or Section 302(f) of ERISA with respect to any such Plan; (vi) Promptly and in any event within ten days after receipt, a copy of any management letter or comparable analysis prepared by the auditors for the Company or any of its Subsidiaries; (vii) as soon as available and in any event within 15 days after the end of each month, a borrowing base certificate in form and detail satisfactory to the Agent, -33- calculating Borrowing Base A and Borrowing Base B and signed by the chief financial officer or controller of the Company; (viii) on or within 15 days of April 30, 1998 and on or within 15 days of each second year thereafter, current appraisals, in form satisfactory to the Agent and performed by an independent third party appraiser acceptable to the Agent, of all aircraft and equipment included in Borrowing Base B; and (ix) Promptly, such other information respecting the business, properties, operations or condition, financial or otherwise, of the Company or any of it Subsidiaries as any Bank or the Agent may from time to time reasonably request. (e) ACCOUNTING; ACCESS TO RECORDS, BOOKS, ETC. Maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in accordance with Generally Accepted Accounting Principles and to comply with the requirements of this Agreement and, at any reasonable time and from time to time, permit any Bank or the Agent or any agents or representatives thereof to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Company and its Subsidiaries, and to discuss the affairs, finances and accounts of the Company and its Subsidiaries with their respective directors, officers, employees and independent auditors, and by this provision the Company does hereby authorize such Persons to discuss such affairs, finances and accounts with any Bank or the Agent. (f) FURTHER ASSURANCES. Will execute and deliver, or cause to be executed and delivered within 30 days after request therefor by the Required Banks or the Agent, a Guaranty for each Subsidiary of the Company, whether now existing or hereafter arising or formed, and all further instruments and documents and take all further action that may be necessary or desirable, or that the Agent may request, in order to give effect to, and to aid in the exercise and enforcement of the rights and remedies of the Banks and the Agent under, the Loan Documents. In addition, the Company agrees to deliver to the Agent and the Banks from time to time upon the acquisition or creation of any Subsidiary not listed in SCHEDULE 4.4 hereto supplements to SCHEDULE 4.4 such that such Schedule, together with such supplements, shall at all times accurately reflect the information provided for thereon. 5.2 NEGATIVE COVENANTS. Until the later of Termination Date A and Termination Date B and thereafter until payment in full of the principal of and accrued interest on the Notes and the payment and performance of all other obligations and liabilities of the Company under the Loan Documents, the Company agrees that, unless the Required Banks shall otherwise consent in writing it shall not, and shall not permit any of its Subsidiaries to: (a) TANGIBLE NET WORTH. Permit or suffer the Consolidated Tangible Net Worth of the Company and its Subsidiaries at any time to be less than the sum of (i) 85% of the Consolidated Tangible Net Worth of the Company and its Subsidiaries as of the Effective Date, after giving effect to Section 2.5 hereof, including without limitation the completion of the -34- initial public offering described at Section 2.5(g) (and the Company agrees to deliver to the Agent a certificate and calculation in reasonable detail showing the Tangible Net Worth of the Company and its Subsidiaries as of the Effective Date after giving effect to such transactions on or prior to thirty (30) days after the Effective Date), plus (b) 50% of the Consolidated net income of the Company and its Subsidiaries, commencing with the fiscal year ending September 30, 1996, provided that, if such net income is negative in any fiscal year of the Company, the amount added for such fiscal year shall be zero and such amount shall not reduce the amount added pursuant to any other fiscal year. (b) FUNDED DEBT RATIO. Permit or suffer the Funded Debt Ratio to exceed 2.50 to 1.0 at any time. (c) FUNDED DEBT TO TOTAL CAPITALIZATION. Permit or suffer the ratio of Funded Debt to Total Capitalization to exceed 0.5 to 1.0 at any time (d) CASH FLOW COVERAGE RATIO. Permit or suffer the Cash Flow Coverage Ratio to be less than (i) 1.05 to 1.0 for any fiscal quarter commencing September 30, 1996 through the fiscal quarter ending June 30, 1997, (ii) 1.1 to 1.0 for the fiscal quarter ending September 30, 1997, or (iii) 1.2 to 1.0 as of the end of any fiscal quarter thereafter. (e) LIENS. Create, incur or suffer to exist any Lien on any of the assets, rights, revenues or property, real, Personal or mixed, tangible or intangible, whether now owned or hereafter acquired, of the Company or any of its Subsidiaries, other than: (i) Liens for taxes not delinquent or for taxes being contested in good faith by appropriate proceedings and as to which adequate financial reserves have been established on its books and records; (ii) Liens (other than any Lien imposed by ERISA) created and maintained in the ordinary course of business which do not secure obligations for borrowed money and are not material in the aggregate and which would not have a Material Adverse Effect and which constitute (A) pledges or deposits under worker's compensation laws, unemployment insurance laws or similar legislation, (B) good faith deposits in connection with bids, tenders, contracts or leases to which the Company or any of its Subsidiaries is a party for a purpose other than borrowing money or obtaining credit, including rent security deposits, (C) Liens imposed by law, such as those of carriers, warehousemen and mechanics, if payment of the obligation secured thereby is not yet due, (D) Liens securing taxes, assessments or other governmental charges or levies not yet subject to penalties for nonpayment, except to the extent such Liens arise from nonpayment of any of such taxes or other assessments and governmental charges if such payment is then being contested in good faith by appropriate legal proceedings and with respect to which adequate financial reserves have been established on the books and records of the Company, and (E) pledges or deposits to secure public or statutory obligations of the Company or any of its Subsidiaries, or surety, customs or appeal bonds to which the Company or any of its Subsidiaries is a party; -35- (iii) Liens affecting real property which constitute minor survey exceptions or defects or irregularities in title, minor encumbrances, easements or reservations of, or rights of others for, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of such real property, PROVIDED that all of the foregoing, in the aggregate, do not at any time materially detract from the value of said properties or materially impair their use in the operation of the businesses of the Company or any of its Subsidiaries; (iv) Each Lien existing on the Effective Date and described in Schedule 5.2(e) hereof, but no extension or renewal thereof shall be permitted; and (v) Any Lien created to secure payment of a portion of the purchase price of, or existing at the time of acquisition of, any tangible fixed asset acquired by the Company 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 Company or such Subsidiary for such fixed asset and the aggregate principal amount of all Indebtedness secured by such Liens does not exceed $250,000; PROVIDED that such Lien does not encumber any other asset at any time owned by the Company or such Subsidiary, and PROVIDED, FURTHER, that not more than one such Lien shall encumber such fixed asset at any one time. (f) ACQUISITIONS; MERGER; ETC. Purchase or otherwise acquire, whether in one or a series of transactions, all or a substantial portion of the business, assets, rights, revenues or property, real, Personal, or mixed, tangible or intangible, of any Person, or all or a substantial portion of the capital stock of or other ownership interest in any other Person; nor merge or consolidate or amalgamate with any other Person or take any other action having a similar effect, nor enter into any joint venture or similar arrangement with any other Person, PROVIDED, HOWEVER, that this Section 5.2(f) shall not prohibit any of the foregoing transactions described in this Section 5.2(f) if each of the following conditions is satisfied: (i) the Company shall be the surviving or continuing corporation thereof, (ii) immediately after such merger or acquisition or other transaction, no Default or Event of Default shall exist or shall have occurred and be continuing and, prior to the consummation of such merger or acquisition, the Company shall have provided to the Banks an opinion of counsel and a certificate of the chief financial officer or controller of the Company (attaching computations to demonstrate compliance with all financial covenants hereunder after giving effect to such merger or acquisition and attaching such pro forma financial statements as may be reasonably requested by the Agent), each stating that such merger or acquisition or other transaction complies with this Section 5.2(f) and that any other conditions under this Agreement relating to such transaction have been satisfied, (iii) the board of directors of the corporation with which the Company or its Subsidiaries is involved in such transaction has approved the transaction, and (iv) if any such merger, acquisition or other transaction involves consideration in excess of $3,000,00, the Required Banks shall have approved in writing such merger, acquisition or other transaction. -36- (g) DISPOSITION OF ASSETS; ETC. Sell, lease, license, transfer, assign or otherwise dispose of any its business, assets, rights, revenues or property, real, Personal or mixed, tangible or intangible, whether in one or a series of transactions, other than inventory sold in the ordinary course of business upon customary credit terms and sales of scrap or obsolete material or equipment, PROVIDED, HOWEVER that this Section 5.2(g) shall not prohibit any such sale, lease, license, transfer, assignment or other disposition if the aggregate book value (disregarding any write-downs of such book value other than ordinary depreciation and amortization) of all of the business, assets, rights, revenues and property disposed of after the date of this Agreement shall be less than $2,500,000 in the aggregate for any calendar year and if, immediately after such transaction, no Default or Event of Default shall exist or shall have occurred and be continuing. (h) DIVIDENDS AND OTHER RESTRICTED PAYMENTS. Make, pay, declare or authorize any dividend, payment or other distribution in respect of any class of its capital stock or any dividend, payment or distribution in connection with the redemption, purchase, retirement or other acquisition, directly or indirectly, of any shares of its capital stock other than such dividends, payments or other distributions to the extent payable solely in shares of the capital stock of the Company, if a Default or Event of Default shall exist or shall have occurred and be continuing, or would be caused thereby. For purposes of this Section 5.2(h), "capital stock" shall include capital stock and any securities exchangeable for or convertible into capital stock and any warrants, rights or other options to purchase or otherwise acquire capital stock or such securities. (i) LOANS AND ADVANCES. Make any loan or advance of any of its funds or property or make any other extension of credit to any Person other than (i) advances by the Company to any of its Subsidiaries, (ii) advances by any Subsidiary of the Company to the Company or to another Subsidiary of the Company, and (iii) extensions of trade credit made in the ordinary course of business on customary credit terms and commission, travel and similar advances made to officers and employees in the ordinary course of business. (j) INDEBTEDNESS. Create, incur, assume or in any manner become liable in respect of, or suffer to exist, any Indebtedness other than: (i) The Advances; (ii) The Indebtedness described in Schedule 5.2(j) hereto, but no increase in the amount thereof or extension thereof shall be permitted; (iii) Indebtedness in aggregate outstanding principal amount not exceeding $250,000 which is secured by one or more liens permitted by Section 5.2(e)(v) hereof; (iv) Indebtedness of any Subsidiary of the Company owing to the Company or to any other Subsidiary of the Company; (v) Other Indebtedness of the Company or any of its Subsidiaries owing to NBD Bank or its Affiliates. -37- (k) NATURE OF BUSINESS. Make any substantial change in the nature of its business from that engaged in on the date of this Agreement or engage in any other businesses other than those in which it is engaged on the date of this Agreement. (l) TRANSACTIONS WITH AFFILIATES. Enter into, become a party to, or become liable in respect of, any contract or undertaking with any Affiliate except in the ordinary course of business and on terms not less favorable to the Company or such Subsidiary than those which could be obtained if such contract or undertaking were an arms length transaction with a Person other than an Affiliate. (m) ADDITIONAL COVENANTS. If at any time the Company or any Subsidiary shall enter into or be a party to any instrument or agreement, including all such instruments or agreements in existence as of the date hereof and all such instruments or agreements entered into after the date hereof, relating to or amending any terms or conditions applicable to any of its Indebtedness which includes covenants, terms, conditions or defaults not substantially provided for in this Agreement or more favorable to the lender or lenders thereunder than those provided for in this Agreement, then the Company shall promptly so advise the Agent and the Banks. Thereupon, if the Agent shall request, upon notice to the Company, the Agent and the Banks shall enter into an amendment to this Agreement or an additional agreement (as the Agent may request), providing for substantially the same covenants, terms, conditions and defaults as those provided for in such instrument or agreement to the extent required and as may be selected by the Agent. ARTICLE VI. DEFAULT 6.1 EVENTS OF DEFAULT. The occurrence of any one of the following events or conditions shall be deemed an "Event of Default" hereunder unless waived pursuant to Section 8.1: (a) NONPAYMENT. The Company shall fail to pay when due any principal of or interest on the Notes or any fees or any other amount payable hereunder, and such failure shall remain unremedied for 2 Business Days; or (b) MISREPRESENTATION. Any representation or warranty made by the Company in Article IV hereof or in any other certificate, report, financial statement or other document furnished by or on behalf of the Company in connection with this Agreement, shall prove to have been incorrect in any material respect when made or deemed made; or (c) CERTAIN COVENANTS. The Company shall fail to perform or observe any term, covenant or agreement contained in Article V hereof, and any such failure shall remain unremedied for 10 calendar days after notice thereof shall have been given to the Company by the Agent; or -38- (d) OTHER DEFAULTS. The Company or any Guarantor shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document, and any such failure shall remain unremedied for 15 calendar days after notice thereof shall have been given to the Company by the Agent; or (e) CROSS DEFAULT. The Company or any of its Subsidiaries shall fail to pay any part of the principal of, the premium, if any, or the interest on, or any other payment of money due under any of its Indebtedness (other than Indebtedness hereunder), beyond any period of grace provided with respect thereto, which individually or together with other such Indebtedness as to which any such failure exists has an aggregate outstanding principal amount in excess of $2,000,000; or if the Company or any of its Subsidiaries fails to perform or observe any other term, covenant or agreement contained in any agreement, document or instrument evidencing or securing any such Indebtedness having such aggregate outstanding principal amount, or under which any such Indebtedness was issued or created, beyond any period of grace, if any, provided with respect thereto if the effect of such failure is to cause or permit the holders of such Indebtedness (or trustee on behalf of such holders) to cause payment in respect of such Indebtedness to become due prior to its due date; or (f) JUDGMENTS. One or more Judgments or orders for the payment of money in an aggregate amount of $2,000,000 shall be rendered against the Company or any of its Subsidiaries, or any other judgment or order (whether or not for the-payment of money) shall be rendered against or shall affect the Company or any of its Subsidiaries which causes or could cause a Material Adverse Effect, and either (i) such judgment or order shall have remained unsatisfied and the Company or such Subsidiary shall not have taken action necessary to stay enforcement thereof by reason of pending appeal or otherwise, prior to the expiration of the applicable period of limitations for taking such action or, if such action shall have been taken, a final order denying such stay shall have been rendered, or (ii) enforcement proceedings shall have been commenced by any creditor upon any such judgment or order; or (g) ERISA. The occurrence of a Reportable Event that results in or could result in liability of the Company, any Subsidiary of the Company or their ERISA Affiliates to the PBGC or to any Plan and such Reportable Event is not corrected within sixty (60) days after the occurrence thereof; or the occurrence of any Reportable Event which could constitute grounds for termination of any Plan of the Company, its Subsidiaries or their ERISA Affiliates by the PBGC or for the appointment by the appropriate United States District Court of a trustee to administer any such Plan and such Reportable Event is not corrected within sixty (60) days after the occurrence thereof; or the filing by the Company, any Subsidiary of the Company or any of their ERISA -39- Affiliates of a notice of intent to terminate a Plan or the institution of other proceedings to terminate a Plan; or the Company, any Subsidiary of the Company or any of their ERISA Affiliates shall fail to pay when due any liability to the PBGC or to a Plan; or the PBGC shall have instituted proceedings to terminate, or to cause a trustee to be appointed to administer, any Plan of the Company, its Subsidiaries or their ERISA Affiliates; or any Person engages in a Prohibited Transaction with respect to any Plan which results in or could result in liability of the Company, any Subsidiary of the Company, any of their ERISA Affiliates, any Plan of the Company, its Subsidiaries or their ERISA Affiliates or fiduciary of any such Plan; or failure by the Company, any Subsidiary of the Company or any of their ERISA Affiliates to make a required installment or other payment to any Plan within the meaning of Section 302(f) of ERISA or Section 412(n) of the Code that results in or could result in liability of the Company, any Subsidiary of the Company or any of their ERISA Affiliates to the PBGC or any Plan; or the withdrawal of the Company, any of its Subsidiaries or any of their ERISA Affiliates from a Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a) (2) of ERISA; or the Company, any of its Subsidiaries or any of their ERISA Affiliates becomes an employer with respect to any Multiemployer Plan without the prior written consent of the Required Banks; or (h) INSOLVENCY, ETC. The Company or any of its Subsidiaries shall be dissolved or liquidated (or any judgment, order or decree therefor shall be entered), or shall generally not pay its debts as they become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors, or shall institute, or there shall be instituted against the Company or any of its Subsidiaries, any proceeding or case seeking to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief or protection of debtors or seeking the entry of an order for relief, or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its assets, rights, revenues or property, and, if such proceeding is instituted against the Company or such Subsidiary and is being contested by the Company or such Subsidiary, as the case may be, in good faith by appropriate proceedings, such proceeding shall remain undismissed or unstayed for a period of 60 days: or the Company or such Subsidiary shall take any action (corporate or other) to authorize or further any of the actions described above in this subsection; (i) CHANGE IN CONTROL. Any Change in Control shall occur; or (j) LOAN DOCUMENTS. Any material provision of any Loan Document shall at any time for any reason cease to be valid and binding and enforceable against any obligor thereunder, or the validity, binding effect or enforceability thereof shall be contested by any Person, or any obligor, shall deny that it has any or further liability or obligation thereunder, or any Loan Document shall be terminated invalidated or set aside, or be declared ineffective or inoperative or in any way cease to give or provide to the Banks and the Agent the benefits purported to be created thereby; or (k) LAWS AND REGULATIONS. Any material violation of the 49 U.S.C. or any FAA regulation applicable to the Company or the Guarantor or to any aircraft owned and/or operated by the Company or Guarantor or to any aircraft owned and/or operated by the Company or the Guarantor is not cured within 30 days; provided, however, that no Event of Default under this clause (k) shall be deemed to exist if the Company and the Guarantors have commenced and diligently pursued appropriate action to cure such violation and such default may be and is cured within 30 days after such 30 day grace period; provided, further, that among other material -40- violations, any violation resulting in a formal investigation or an enforcement action by the FAA shall be presumed material. 6.2 REMEDIES. (a) Upon the occurrence and during the continuance of any Event of Default, the Agent may and, upon being directed to do so by the Required Banks, shall by notice to the Company (i) terminate the Commitments or (ii) declare the outstanding principal of, and accrued interest on, the Notes, all unpaid reimbursement obligations in respect of drawings under Letters of Credit and all other amounts owing under this Agreement to be immediately due and payable, or (iii) demand immediate delivery of cash collateral, and the Company agrees to deliver such cash collateral upon demand, in an amount equal to the maximum amount that may be available to be drawn at any time prior to the stated expiry of all outstanding Letters of Credit, or any one or more of the foregoing, whereupon the Commitments shall terminate forthwith and all such amounts, including such cash collateral, shall become immediately due and payable, PROVIDED that in the case of any event or condition described in Section 6.1(h) with respect to the Company, the Commitments shall automatically terminate forthwith and all such amounts, including such cash collateral, shall automatically become immediately due and payable without notice; in all cases without demand, presentment, protest, diligence, notice of dishonor or other formality, all of which are hereby expressly waived. Such cash collateral delivered in respect of outstanding Letters of Credit shall be deposited in a special cash collateral account to be held by the Agent as collateral security for the payment and performance of the Company's obligations under this Agreement to the Banks and the Agent. (b) The Agent may and, upon being directed to do so by the Required Banks, shall, in addition to the remedies provided in Section 6.2(a), exercise and enforce any and all other rights and remedies available to it, whether arising under the Loan Documents or under applicable law, in any manner deemed appropriate by the Agent, including suit in equity, action at law, or other appropriate proceedings, whether for the specific performance (to the extent permitted by law) of any covenant or agreement contained in any Loan Document or in aid of the exercise of any power granted in any Loan Document. (c) Upon the occurrence and during the continuance of any Event of Default, each Bank may at any time and from time to time, without notice to the Company (any requirement for such notice being expressly waived by the Company set off and apply against any and all of the obligations of the Company now or hereafter existing under this Agreement, Whether owing to such Bank or any other Bank or the Agent, any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Company and any property of the Company from time to time in possession of such Bank, irrespective of whether or not such Bank shall have made any demand hereunder and although such obligations may be contingent and -41- unmatured. The Company hereby grants to the Banks and the Agent a lien on and security interest in all such deposits, indebtedness and property as collateral security for the payment and performance of the obligations of the Company under the Loan Documents. The rights of such Bank under this Section 6.2(c) are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Bank may have. ARTICLE VII. THE AGENT AND THE BANKS 7.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto. The provisions of this Article VII are solely for the benefit of the Agent and the Banks, and the Company shall not have any rights as a third party beneficiary of any of the provisions hereof. In performing its functions and duties under this Agreement, the Agent shall act solely as agent of the Banks and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for the Company. 7.2 AGENT AND AFFILIATES. NBD Bank in its capacity as a Bank hereunder shall have the same rights and powers hereunder as any other Bank and may exercise or refrain from exercising the same as though it were not the Agent. NBD Bank and its affiliates may (without having to account therefor to any Bank) accept deposits from, lend money to, and generally engage in any kind of banking, trust, financial advisory or other business with the Company, or any of its respective Subsidiaries as if it were not acting as Agent hereunder, and may accept fees and other consideration therefor without having to account for the same to the Banks. 7.3 SCOPE OF AGENT'S DUTIES. The Agent shall have no duties or responsibilities except those expressly set forth herein, and shall not, by reason of this Agreement, have a fiduciary relationship with any Bank, and no implied covenants, responsibilities, duties, obligations or liabilities shall be read into this Agreement or shall otherwise exist against the Agent. As to any matters not expressly provided for by the Loan Documents (including, without limitation, collection and enforcement actioned under the Notes), the Agent shall not be required to exercise any discretion or take any action, but the Agent shall take such action or omit to take any action pursuant to the reasonable written instructions of the Required Banks and may request instructions from the Required Banks. The Agent shall in all cases be fully protected in acting, or in refraining from acting, pursuant to the written instructions of the Required Banks (or all of the Banks, as the case may be, in accordance with the requirements of this Agreement), which instructions and any action or omission pursuant thereto shall be binding upon all of the Banks; PROVIDED, HOWEVER, that the Agent shall not be required to act or omit to act if, in the judgment of the Agent, such action or omission may expose the Agent to Personal liability or is contrary to any Loan Document or applicable law. -42- 7.4 RELIANCE BY AGENT. The Agent shall be entitled to rely upon any certificate, notice, document or other communication (including any cable, telegram, telex, facsimile transmission or oral communication) believed by it to be genuine and correct and to have been sent or given by or on behalf of a proper Person. The Agent may treat the payee of any Note as the holder thereof unless and until the Agent receives written notice of the assignment thereof pursuant to the terms of this Agreement signed by such payee and the Agent receives the written agreement of the assignee that such assignee is bound hereby to the same extent as if it had been an original party hereto. The Agent may employ agents (including without limitation collateral agents) and may consult with legal counsel (who may be counsel for the Company), independent public accountants and other experts selected by it and shall not be liable to the Banks, except as to money or property received by it or its authorized agents, for the negligence or misconduct of any such agent selected by it with reasonable care or for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. 7.5 DEFAULT. The Agent shall not be deemed to have knowledge of the occurrence of any Default or Event of Default, unless the Agent has received written notice from a Bank or the Company specifying such Default or Event of Default and stating that such notice is a "Notice of Default". In the event that the Agent receives such a notice, the Agent shall give written notice thereto to the Banks. 7.6 LIABILITY OF AGENT. Neither the Agent nor any of its directors, officers, agents, or employees shall be liable to the Banks for any action taken or not taken by it or them in connection herewith with the consent or at the request of the Required Banks or in the absence of its or their own gross negligence or willful misconduct. Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any recital, statement, warranty or representation contained in any Loan Document, or in any certificate, report, financial statement or other document furnished in connection with this Agreement, (ii) the performance or observance of any of the covenants or agreements of the Company, (iii) the satisfaction of any condition specified in Article II hereof, or (iv) the validity, effectiveness, legal enforceability, value or genuineness of any Loan Documents or any collateral subject thereto or any other instrument or document furnished in connection herewith. 7.7 NONRELIANCE ON AGENT AND OTHER BANKS. Each Bank acknowledges and agrees that it has, independently and without reliance on the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Company and its Subsidiaries decision to enter into this Agreement and that it will, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decision in taking or not taking action under this Agreement. The Agent shall not be required to keep itself informed as to the performance or observance by the Company of the Loan Documents or any other documents referred to or provided for herein or to inspect the properties or books of the Company or any Subsidiary and, except for notices, reports and other documents and information expressly required to be furnished to the Banks by the Agent hereunder, the -43- Agent shall not have any duty or responsibility to provide any Bank with any information concerning the affairs, financial condition or business of the Company, or any of its Subsidiaries which may come into the possession of the Agent or any of its Affiliates. 7.8 INDEMNIFICATION. The Banks agree to indemnify the Agent (to the extent not reimbursed by the Company, but without limiting any obligation of the Company to make such reimbursement), ratably according to the respective principal amounts of the Advances then outstanding made by each of them (or if no Advances are at the time outstanding, ratably according to the respective amounts of their Commitments), from and against any and all claims, damages, losses, liabilities, costs or expenses of any kind or nature whatsoever (including, without limitation, fees and disbursements of counsel) which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or the transactions contemplated hereby or any action taken or omitted by the Agent under this Agreement, PROVIDED, HOWEVER, that no Bank shall be liable for any portion of such claims, damages, losses, liabilities, costs or expenses resulting from the Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Bank agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of- pocket expenses (including without limitation fees and expenses of counsel) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that the Agent is not reimbursed for such expenses by the Company but without limiting the obligation of the Company to make such reimbursement. Each Bank agrees to reimburse the Agent promptly upon demand for its ratable share of any amounts owing to the Agent by the Banks pursuant to this Section. If the indemnity furnished to the Agent under this Section shall, in the judgment of the Agent, be insufficient or become impaired, the Agent may call for additional indemnity from the Banks and cease, or not commence, to take any action until such additional indemnity is furnished. 7.9 SUCCESSOR AGENT. The Agent may resign as such at any time upon ten days' prior written notice to the Company and the Banks. In the event of any such resignation, the Required Banks shall, by an instrument in writing delivered to the Company and the Agent, appoint a successor, which shall be a commercial bank organized under the laws of the United States or any State thereof and having a combined capital and surplus of at least $500,000,000. If a successor is not so appointed or does not accept such appointment before the Agent's resignation becomes effective, the retiring Agent may appoint a temporary successor to act until such appointment by the Required Banks is made and accepted or if no such temporary successor is appointed as provided above by the retiring Agent, the Required Banks shall thereafter perform all the duties of the Agent hereunder until such appointment by the Required Banks is made and accepted. Any successor to the Agent shall execute and deliver to the Company and the Banks an instrument accepting such appointment and thereupon such successor Agent, without further act, deed, conveyance or transfer shall become vested with all of the properties, rights, interests, powers, authorities and obligations of its predecessor hereunder with like effect as if originally named as Agent hereunder. Upon request of such successor Agent, the Company and the retiring Agent shall execute and deliver such instruments of conveyance, assignment and further assurance -44- and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Agent all such properties, rights, interests, powers, authorities and obligations. The provisions of this Article VII shall thereafter remain effective for such retiring Agent with respect to any actions taken or omitted to be taken by such Agent while acting as the Agent hereunder. 7.10 SHARING OF PAYMENTS. The Banks agree among themselves that, in the event that any Bank shall obtain payment in respect of any Advance or any other obligation owing to the Banks under this Agreement through the exercise of a right of set-off, banker's lien, counterclaim or otherwise in excess of its ratable share of payments received by all of the Banks on account of the Advances and other obligations (or if no Advances are outstanding, ratably according to the respective amounts of the Commitments), such Bank shall promptly purchase from the other Banks participation in such Advances and other obligations in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all of the Banks share such payment in accordance with such ratable shares. The Banks further agree among themselves that if payment to a Bank obtained by such Bank through the exercise of a right of set-off, banker's lien, counterclaim or otherwise as aforesaid shall be rescinded or must otherwise be restored, each Bank which shall have shared the benefit of such payment shall, by repurchase of participation theretofore sold, return its share of that benefit to each Bank whose payment shall have been rescinded or otherwise restored. The Company agrees that any Bank so purchasing such a participation may, to the fullest extent permitted by law, exercise all rights of payment, including set-off, banker's lien or counterclaim, with respect to such participation as fully as if such Bank were a holder of such Advance or other obligation in the amount of such participation. The Banks further agree among themselves that, in the event that amounts received by the Banks and the Agent hereunder are insufficient to pay all such obligations or insufficient to pay all such obligations when due, the fees and other amounts owing to the Agent in such capacity shall be paid therefrom before payment of obligations owing to the Banks under this Agreement. Except as otherwise expressly provided in this Agreement, if any Bank or the Agent shall fail to remit to the Agent or any other Bank an amount payable by such Bank or the Agent to the Agent or such other Bank pursuant to this Agreement on the date when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to the Agent or such other Bank at a rate per annum equal to the rate at which borrowings are available to the payee in its overnight federal funds market. It is further understood and agreed among the Banks and the Agent that if the Agent shall engage in any other transactions with the Company and shall have the benefit of any collateral or security therefor which does not expressly secure the obligations arising under this Agreement except by virtue of a so-called dragnet clause or comparable provision, the Agent shall be entitled to apply any proceeds of such collateral or security first in respect of the obligations arising in connection with such other transaction before application to the obligations arising under this Agreement. 7.11 WITHHOLDING TAX EXEMPTION. At least five Business Days prior to the first date on which interest or fees are payable hereunder for the account of any Bank, each Bank that is not incorporated under the laws of the United States of America, or a state thereof, agrees that -45- it will deliver to each of the Company and the Agent two duly completed copies of United States Internal Revenue Service Form 1001 or 4224, certifying in either case that such Bank is entitled to receive payments under this Agreement and the Notes without deduction or withholding of any United States federal income taxes. Each Bank which so delivers a Form 1001 or 4224 further undertakes to deliver to each of the Company and the Agent two additional copies of such form (or a successor form) on or before the date that such form expires (currently, three successive calendar years for Form 1001 and one calendar year for Form 4224) or becomes obsolete or after the occurrence of any event requiring a change in the most recent forms so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Company or the Agent, in each case certifying that such Bank is entitled to receive payments under this Agreement and the Notes without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Bank from duly completing and delivering any such form with respect to it and such Bank advises the Company and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax. Each such Bank delivering such forms shall indemnify the Company and the Agent, and hold harmless the Company and the Agent from, all losses and damages suffered by the Company or the Agent for any inaccuracies in any such forms. ARTICLE VIII. MISCELLANEOUS 8.1 AMENDMENTS, ETC. 1. No amendment, modification, termination or waiver of any provision of any Loan Document nor any consent to any departure therefrom shall be effective unless the same shall be in writing and signed by the Company and Required Banks and, to the extent any rights or duties of the Agent may be affected thereby, the Agent, PROVIDED, HOWEVER, that no such amendment, modification, termination, waiver or consent shall, without the consent of the Agent and all of the Banks, (i) authorize or permit the extension of time for, or any reduction of the amount of, any payment of the principal of, or interest on, the Notes or any Letter of Credit reimbursement obligation, or any fees or other amount payable hereunder, or (ii) amend, extend or terminate the respective Commitments of any Bank set forth on the signature pages hereof or the definition of Required Banks. (b) Any such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. (c) Notwithstanding anything herein to the contrary, no Bank that is in default of any of its obligations to fund any amount due under this Agreement shall be entitled to vote (whether to consent or to withhold its consent) with respect to any amendment, modification, termination or waiver of any provision of this Agreement or any departure therefrom or any direction from the Banks to the Agent, and, for purposes of determining the -46- Required Banks at any time when any Bank is in default under this Agreement, the Commitments and Advances of such defaulting Banks shall be disregarded. 8.2 NOTICES. (a) Except as otherwise provided in Section 8.2(c) hereof, all notices and other communications hereunder shall be in writing and shall be delivered or sent to the Company at 3939 International Gateway, Columbus, Ohio 43219, Attention: Chief Financial Officer or Controller, Facsimile No. (614) 237-1915, Telephone No. (614) 237-9777, and to the Agent and the Banks at the respective addresses for notices set forth on the signatures pages hereof, or to such other address as may be designated by the Company, the Agent or any Bank by notice to the other parties hereto. All notices and other communications shall be deemed to have been given at the time of actual delivery thereof to such address, or, unless sooner delivered, (i) if sent by certified or registered mail, postage prepaid, to such address, on the third day after the date of mailing, (ii) if sent by telex, upon receipt of the appropriate answerback, or (iii) if sent by facsimile transmission, upon confirmation of receipt by telephone at the number specified for confirmation, PROVIDED, HOWEVER, that notices to the Agent shall not be effective until received. (b) Notices by the Company to the Agent with respect to terminations or reductions of the Commitments pursuant to Section 2.2, requests for Advances pursuant to Section 2.4, requests for continuations or conversions of Loans pursuant to Section 2.7 and notices of prepayment pursuant to Section 3.1 shall be irrevocable and binding on the Company. (c) Any notice to be given by the Company to the Agent pursuant to Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or any Bank hereunder, may be given by telephone, and all such notices given by the Company must be immediately confirmed in writing in the manner provided in Section 8.2(a). Any such notice given by telephone shall be deemed effective upon receipt thereof by the party to whom such notice is to be given. The Company shall indemnify and hold harmless the Banks and the Agent from any and all losses, damages, liabilities and claims arising from their good faith reliance on any such telephone notice. 8.3 NO WAIVER BY CONDUCT; REMEDIES CUMULATIVE. No course of dealing on the part of the Agent or any Bank, nor any delay or failure on the part of the Agent or any Bank in exercising any right, power or privilege hereunder shall operate as a waiver of such right, power or privilege or otherwise prejudice the Agent's or such Bank's rights and remedies hereunder; nor shall any single or partial exercise thereof preclude any further exercise thereof or the exercise of any other right, power or privilege. No right or remedy conferred upon or reserved to the Agent or any Bank under any Loan Document is intended to be exclusive of any other right or remedy, and every right and remedy shall be cumulative and in addition to every other right or remedy granted thereunder or now or hereafter existing under any applicable law. Every right and remedy granted by any Loan Document or by applicable law to the Agent or any Bank may be exercised from time to time and as often as may be deemed expedient by the Agent or any Bank and, unless contrary to the express provisions of any Loan Document, irrespective of the occurrence or continuance of any Default or Event of Default. -47- 8.4 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All terms, covenants, agreements, representations and warranties of the Company made herein or in any other Loan Document or in any certificate, report, financial statement or other document furnished by or on behalf of the Company in connection with this Agreement shall be deemed to be material and to have been relied upon by the Banks, notwithstanding any investigation heretofore or hereafter made by any Bank or on such Bank's behalf, and those covenants and agreements of the Company set forth in Section 3.7, 3.9 and 8.5 hereof shall survive the repayment in full of the Advances and the termination of the Commitments. 8.5 EXPENSES; INDEMNIFICATION. (a) The Company agrees to pay, or reimburse the Agent for the payment of, on demand, (i) the reasonable fees and expenses of counsel to the Agent, including without limitation the fees and expenses of Dickinson, Wright, Moon, Van Dusen & Freeman, in connection with the preparation, execution, delivery and administration of the Loan Documents and in connection with advising the Agent as to its rights and responsibilities with respect thereto, and in connection with any amendments, waivers or consents in connection therewith, and (ii) all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing or recording of the Loan Documents (or the verification of filing, recording, perfection or priority thereof) or the consummation of the transactions contemplated hereby, and any and all liabilities with respect to or resulting from any delay in paying or omitting to pay such taxes or fees, and (iii) all reasonable costs and expenses of the Agent and the Banks (including reasonable fees and expenses of counsel and whether incurred through negotiations, legal proceedings or otherwise)) in connection with any Default or Event of Default or the enforcement of, or the exercise or preservation of any rights under, the Loan Documents or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement and (iv) all reasonable costs and expenses of the Agent and the Banks (including reasonable fees and expenses of counsel) in connection with any action or proceeding relating to a court order, injunction or other process or decree restraining or seeking to restrain the Agent from paying any amount under, or otherwise relating in any way to, any Letter of Credit and any and all costs and expenses which any of them may incur relative to any payment under any Letter of Credit. (b) The Company hereby indemnifies and agrees to hold harmless the Banks and the Agent, and their respective officers, directors, employees and agents, harmless from and against any and all claims, damages, losses, liabilities, costs or expenses of any kind or nature whatsoever which the Banks or the Agent or any such Person may incur or which may be claimed against any of them by reason of or in connection with any Letter of Credit, and neither any Bank nor the Agent or any of their respective officers, directors, employees or agents shall be liable or responsible for: (i) the use which may be made of any Letter of Credit or for any acts or omissions of any beneficiary in connection therewith; (ii) the validity, sufficiency or genuineness of documents or of any endorsement thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; (iii) payment by the Agent to the beneficiary under any Letter of Credit against presentation of documents which do not comply with the terms of any Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit; (iv) any error, omission, interruption or -48- delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit; or (v) any other event or circumstance whatsoever arising in connection with any Letter of Credit; PROVIDED, HOWEVER, that the Company shall not be required to indemnify the Banks and the Agent and such other Persons, and the Banks shall be liable to the Company to the extent, but only to the extent, of any direct, as opposed to consequential or incidental, damages suffered by the Company which were caused by (A) the Agent's wrongful dishonor of any Letter of Credit after the presentation to it by the beneficiary thereunder of a draft or other demand for payment and other documentation strictly complying with the terms and conditions of such Letter of Credit, or (B) the Agent's payment by the Agent to the beneficiary under any Letter of Credit against presentation of documents which do not comply with the terms of the Letter of Credit to the extent, but only to the extent, that such payment constitutes gross negligence of wilful misconduct of the Agent. It is understood that in making any payment under a Letter of Credit the Agent will rely on documents presented to it under such Letter of Credit as to any and all matters set forth therein without further investigation and regardless of any notice or information to the contrary, and such reliance and payment against documents presented under a Letter of Credit substantially complying with the terms thereof shall not be deemed gross negligence or wilful misconduct of the Agent in connection with such payment. It is further acknowledged and agreed that the Company may have rights against the beneficiary or others in connection with any Letter of Credit with respect to which the Banks are alleged to be liable and it shall be a precondition of the assertion of any liability of the Banks under this Section that the Company shall first have exhausted all remedies in respect of the alleged loss against such beneficiary and any other parties obligated or liable in connection with such Letter of Credit and any related transactions. (c) In consideration of the execution and delivery of this Agreement by each Bank and the extension of the Commitments, the Company hereby indemnifies, exonerates and holds the Agent, each Bank and each of their respective officers, directors, employees and agents (collectively, the "INDEMNIFIED PARTIES") free and harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities and damages, and expenses incurred in connection therewith (irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), including reasonable attorneys' fees and disbursements (collectively, the "INDEMNIFIED LIABILITIES"), incurred at any time by the Indemnified Parties or any of them as a result of, or arising out of, or relating to: (i) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Advance; (ii) the entering into and performance of this Agreement and any other agreement or instrument executed in connection herewith by any of the Indemnified Parties (including any action brought by or on behalf of the Company as the result of any determination by the Required Banks not to fund any Advance); -49- (iii) any investigation, litigation or proceeding related to any acquisition or proposed acquisition by the Company or any of its Subsidiaries of any portion of the stock or assets of any Person, whether or not the Agent or such Bank is party thereto; (iv) any investigation, litigation or proceeding related to any environmental cleanup, audit, compliance or other matter relating to the protection of the environment or the release by the Company or any of its Subsidiaries of any Hazardous Material; or (v) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or releasing from, any real property owned or operated by the Company or any of its Subsidiaries of any Hazardous Material (including any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under any Environmental Law), regardless of whether caused by, or within the control of, the Company or such Subsidiary, except for any such Indemnified Liabilities arising for the account of a particular Indemnified Party by reason of the activities of the Indemnified Party on the property of the Company conducted subsequent to a foreclosure on such property by the Banks or by reason of the relevant Indemnified Party's gross negligence or willful misconduct or breach of this Agreement, and if and to the extent that the foregoing undertaking may be unenforceable for any reason, the Company hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The Company shall be obligated to indemnify the Indemnified Parties for all Indemnified Liabilities subject to and pursuant to the foregoing provisions, regardless of whether the Company or any of its Subsidiaries had knowledge of the facts and circumstances giving rise to such Indemnified Liability. 8.6 SUCCESSORS AND ASSIGNS. (a) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, PROVIDED that the Company may not, without the prior consent of the Banks, assign its rights or obligations under any Loan Document and the Banks shall not be obligated to make any Advance hereunder to any entity other than the Company. (b) Any Bank may sell to any financial institution or institutions, and such financial institution or institutions may further sell, a participation interest (undivided or divided) in, the Advances and such Bank's rights and benefits under the Loan Documents, and to the extent of that participation interest such participant or participants shall have the same rights and benefits against the Company under Section 3.7, 3.9 and 6.2(c) as it or they would have had if such participant or participants were the Bank making the Advances to the Company hereunder, PROVIDED, HOWEVER, that (i) such Bank's obligations under this Agreement shall remain unmodified and fully effective and enforceable against such Bank, (ii) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Bank shall remain the holder of its Notes for all purposes of this Agreement, (iv) the Company, the Agent and the other Banks shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement, and (v) such Bank shall -50- not grant to its participant any rights to consent or withhold consent to any action taken by such Bank or the Agent under this Agreement other than action requiring the consent of all of the Banks hereunder. (c) The Agent from time to time in its sole discretion may appoint agents for the purpose of servicing and administering this Agreement and the transactions contemplated hereby and enforcing or exercising any rights or remedies of the Agent provided under the Loan Documents or otherwise. In furtherance of such agency, the Agent may from time to time direct that the Company provide notices, reports and other documents contemplated by this Agreement (or duplicates thereof) to such agent. The Company hereby consents to the appointment of such agent and agrees to provide all such notices, reports and other documents and to otherwise deal with such agent acting on behalf of the Agent in the same manner as would be required if dealing with the Agent itself. (d) Each Bank may, with the prior written consent of the Company (which shall not be unreasonably withheld and may not be withheld if an Event of Default has occurred and is continuing) and the Agent, assign to one or more banks or other entities all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it and the Note or Notes held by it); PROVIDED, HOWEVER, that (i) each such assignment shall be of a uniform, and not a varying, percentage of all rights and obligations, (ii) except in the case of an assignment of all of a Bank's rights and obligations under this Agreement, (A) the amount of the Commitment of the assigning Bank being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $5,000,000, and in integral multiples of $1,000,000 thereafter, or such lesser amount as the Company and the Agent may consent to and (B) after giving effect to each such assignment, the amount of the Commitment of the assigning Bank shall in no event be less than $5,000,000, (iii) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register, an Assignment and Acceptance in the form of EXHIBIT E hereto (an "ASSIGNMENT AND ACCEPTANCE"), together with any Note or Notes subject to such assignment and a processing and recordation fee of $3,000, and (iv) any Bank may without the consent of the Company or the Agent, and without paying any fee, assign to any Affiliate of such Bank that is a bank or financial institution all of its rights and obligations under this Agreement. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Bank hereunder and (y) the Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the remaining portion of an assigning Bank's rights and obligations under this Agreement, such Bank shall cease to be a party hereto). -51- (e) By executing and delivering an Assignment and Acceptance, the Bank assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Bank makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Bank makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Company or the performance or observance by the Company of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.6 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Agent, such assigning Bank or any other Bank 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; (v) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Bank. (f) The Agent shall maintain at its address designated on the signature pages hereof a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Banks and the Commitment of, and principal amount of the Advances owing to, each Bank from time to time (the "REGISTER"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Company, the Agent and the Banks may treat each Person whose name is recorded in the Register as a Bank hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Company or any Bank at any reasonable time and from time to time upon reasonable prior notice. (g) Upon its receipt of an Assignment and Acceptance executed by an assigning Bank and an assignee, together with any Note or Notes subject to such assignment, the Agent shall, if such Assignment and Acceptance has been completed, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Company. Within five Business Days after its receipt of such notice, the Company shall execute and deliver to the Agent in exchange for the surrendered Note or Notes a new Note to the order of such assignee in an amount equal to the Commitment assumed by it pursuant to such Assignment and Acceptance and, if the assigning Bank has retained a Commitment hereunder, a new Note to the order of the assigning Bank in an amount equal to the Commitment retained by it hereunder. Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated -52- the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of EXHIBIT E hereto. (h) The Company shall not be liable for any costs or expenses of any Bank in effectuating any participation or assignment under this Section 8.6. (i) The Banks may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.6, disclose to the assignee or participant or proposed assignee or participant any information relating to the Company. (j) Notwithstanding any other provision set forth in this Agreement, any Bank may at any time create a security interest in, or assign, all or any portion of its rights under this Agreement (including, without limitation, the Loans owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System; PROVIDED that such creation of a security interest or assignment shall not release such Bank from its obligations under this Agreement. 8.7 COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. 8.8 GOVERNING LAW. This Agreement is a contract made under, and shall be governed by and construed in accordance with, the law of the State of Michigan applicable to contracts made and to be performed entirely within such State and without giving effect to choice of law principles of such State. The Company and the Banks further agree that any legal or equitable action or proceeding with respect to the Loan Documents or the transactions contemplated hereby shall be brought in any court of the State of Michigan, or in any court of the United States of America sitting in Michigan, and the Company and the Banks hereby submit to and accept generally and unconditionally the jurisdiction of those courts with respect to its Person and property, and, in the case of the Company irrevocably appoints its chief financial officer as its agent for service of process and irrevocably consents to the service of process in connection with any such action or proceeding by Personal delivery to such agent or to the Company or by the mailing thereof by registered or certified mail, postage prepaid to the Company or such Guarantor at its address for notices pursuant to Section 8.2. Nothing in this paragraph shall affect the right of the Banks and the Agent to serve process in any other manner permitted by law or limit the right of the Banks or the Agent to bring any such action or proceeding against the Company or property in the courts of any other jurisdiction. The Company and the Banks hereby irrevocably waives any objection to the laying of venue of any such action or proceeding in the above described courts. 8.9 TABLE OF CONTENTS AND HEADINGS. The table of contents and the headings of the various subdivisions hereof are for the convenience of reference only and shall in no way modify any of the terms or provisions hereof. -53- 8.10 CONSTRUCTION OF CERTAIN PROVISIONS. If any provision of this Agreement refers to any action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person, whether or not expressly specified in such provision. 8.11 INTEGRATION AND SEVERABILITY. The Loan Documents embody the entire agreement and understanding between the Company, the Guarantors, the Agent and the Banks, and supersede all prior agreements and understandings, relating to the subject matter hereof. In case any one or more of the obligations of the Company under the Loan Documents shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining obligations of the Company shall not in any way be affected or impaired thereby, and such invalidity, illegality or unenforceability in one jurisdiction shall not affect the validity, legality or enforceability of the obligations of the Company under any Loan Document in any other jurisdiction. 8.12 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any such covenant, the fact that it would be permitted by an exception to, or would be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or such condition exists. 8.13 INTEREST RATE LIMITATION. Notwithstanding any provisions of any Loan Document, in no event shall the amount of interest paid or agreed to be paid by the Company exceed an amount computed at the highest rate of interest permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any provision of any Loan Document at the time performance of such provision shall be due, shall involve exceeding the interest rate limitation validly prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, IPSO FACTO, the obligations to be fulfilled shall be reduced to an amount computed at the highest rate of interest permissible under applicable law, and if for any reason whatsoever any Bank shall ever receive as interest an amount which would be deemed unlawful under such applicable law such interest shall be automatically applied to the payment of principal of the Advances outstanding hereunder (whether or not then due and payable) and not to the payment of interest, or shall be refunded to the Company if such principal and all other obligations of the Company to the Banks have been paid in full. 8.14 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE COMPANY, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENTS OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER ANY BANK, THE AGENT, NOR THE COMPANY SHALL SEEK TO CONSOLIDATE, BY -54- COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY SUCH PARTY. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered on the ____ day of May, 1996, which shall be the Effective Date of this Agreement, notwithstanding the day and year first above written. AIRNET SYSTEMS, INC. By__________________________________ Its________________________________ Address for Notices: NBD BANK, as a Bank and as Agent 611 Woodward Avenue By__________________________________ Detroit, Michigan 48226 Its_________________________________ Attention: Michigan Banking Division Facsimile No.: (313) 225-2290 Telephone No.:(313) 225-2227 Commitment Amount: $50,000,000 (comprised of a Revolving Credit A Commitment of $20,000,000, and a Revolving Credit B Commitment of $30,000,000) Percentage of Total Commitments:100% -55- SCHEDULE 2.10 FORM EXTENSION REQUEST EXHIBIT A FORM REVOLVING CREDIT A NOTE EXHIBIT B REVOLVING CREDIT B NOTE EXHIBIT C REQUEST FOR ADVANCE EXHIBIT D REQUEST FOR CONTINUATION OR CONVERSION OF LOAN EXHIBIT E ASSIGMENT AND ACCEPTANCE

Basic Info X:

Name: LOAN AGREEMENT
Type: Loan Agreement
Date: May 24, 1996
Company: AIRNET SYSTEMS INC
State: Ohio

Other info:

Date:

  • last day of the fiscal quarter
  • Saturday , Sunday
  • last day of any fiscal quarter
  • last day of such fiscal quarter
  • last Eurodollar Business Day
  • last Business Day of each March
  • July 18 , 1990
  • December 1 , 1997
  • January 15
  • January 31
  • last day of the then
  • March 31 , 1996
  • September 30 , 1995
  • within 15 days of April 30 , 1998
  • September 30 , 1996 through the fiscal quarter ending June 30 , 1997
  • fiscal quarter ending September 30 , 1997

Organization:

  • Reduction of Commitments
  • Further Conditions for Disbursement
  • Limitation of Requests and Elections
  • Letter of Credit Reimbursement Payments
  • Preservation of Corporate Existence
  • Maintenance of Properties ; Insurance
  • c Funded Debt to Total Capitalization
  • Cash Flow Coverage Ratio
  • Nature of Business
  • Survival of Various Provisions
  • Table of Contents
  • Interest Rate Limitation
  • Conversion Exhibit E.
  • Ratio Applicable Margin Applicable Margin Applicable Margin
  • United States Department of Transportation
  • United States Federal Aviation Administration
  • Federal Reserve Bank of New York
  • Comprehensive Environmental Response
  • Eurodollar Interest Period or Negotiated Interest Period
  • Negotiated Rate Interest Period
  • Pension Benefit Guaranty Corporation
  • Consolidated Net Worth of the Company
  • Termination Date B
  • Letter of Credit Advances
  • New Creations , Inc.
  • Eurodollar Business Days
  • Non-Consenting Bank 's Commitment
  • Revolving Credit B Note
  • Federal Funds Rate
  • Letter of Credit Documents
  • Fixed Rate Loan
  • the State of Ohio
  • Event of Default or Default
  • Ernst & Young LLP
  • Securities and Exchange Commission
  • Generally Accepted Accounting Principles
  • Consolidated Tangible Net Worth of the Company
  • Material Adverse Effect
  • United States District Court
  • Letters of Credit
  • United States Internal Revenue Service
  • 3939 International Gateway
  • Van Dusen & Freeman
  • Letter of Credit the Agent
  • Board of Governors of the Federal Reserve System
  • State of Michigan
  • Michigan Banking Division Facsimile No
  • Percentage of Total

Location:

  • London
  • Columbus
  • Ohio
  • State of Michigan
  • United States of America
  • Detroit

Money:

  • $ 4,000,000
  • $ 3,000,000
  • $ 25,000
  • $ 100,000
  • $ 29,900,000
  • $ 2,500,000
  • $ 250,000
  • $ 2,000,000
  • $ 500,000,000
  • $ 1,000,000
  • $ 5,000,000
  • $ 50,000,000
  • $ 20,000,000
  • $ 30,000,000

Person:

  • Don Wright
  • Lien
  • Moon

Time:

  • 11:00 a.m.
  • 10:00 a.m.
  • 1:00 p.m.

Percent:

  • 0.700 % 0.200 % 0.700 %
  • 0.875 % 0.225 % 0.875 %
  • 1.000 % 0.250 % 1.000 %
  • 1.125 % 0.375 % 1.125 %
  • 80 %
  • 20 %
  • one percent
  • 1 %
  • one-half percent
  • 12 %
  • three percent
  • 66-23 % percent
  • 10 %
  • 0.125 %
  • 85 %
  • Commitments:100 %