DISBURSEMENT AGREEMENT among WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Disbursement Agent, WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Trustee, and IDLEAIRE TECHNOLOGIES CORPORATION, as the Issuer Dated as of December 30, 2005
Exhibit 10.6
among
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as the Disbursement Agent,
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as the Trustee,
and
IDLEAIRE TECHNOLOGIES CORPORATION,
as the Issuer
Dated as of December 30, 2005
TABLE OF CONTENTS
1. Definitions. |
2 | |||
1.1 Defined Terms |
2 | |||
1.2 Additional Defined Terms |
4 | |||
1.3 Rules of Interpretation |
5 | |||
2. Establishment of the Disbursement Account |
5 | |||
2.1 Appointment of Disbursement Agent |
5 | |||
2.2 Establishment of the Disbursement Account |
6 | |||
2.3 Security Agreement |
6 | |||
2.4 Investment of Funds in the Disbursement Account |
6 | |||
2.5 Agency |
7 | |||
2.6 Waiver of Set-off Rights |
7 | |||
2.7 Transfer of Funds to the Trustee |
7 | |||
3. Disbursement Agent’s Compensation |
8 | |||
4. Disbursement Requests and Disbursements |
8 | |||
5. Representations and Warranties |
9 | |||
5.1 Officer’s Certificate as Representation and Warranty |
10 | |||
6. Disbursement Account |
10 | |||
6.1 Conditions to Disbursements |
10 | |||
6.2 Advance Disbursements |
11 | |||
6.3 Disbursements after an Event of Default |
11 | |||
7. Events of Default |
12 | |||
7.1 Indenture |
12 | |||
7.2 Performance of Certain Obligations |
12 | |||
7.3 Abandonment of Facilities Rollout or Business |
12 | |||
8. Disbursed Funds Account. |
12 | |||
8.1 Rights of the Issuer to Disbursed Funds Account |
12 | |||
8.2 Right to Substitute Disbursed Funds Account |
12 | |||
9. Limitation of Liability |
12 | |||
10. Indemnity |
13 | |||
11. Termination |
13 | |||
12. Substitution or Resignation |
13 | |||
12.1 Disbursement Agent |
13 |
i
13. Account Statement |
14 | |||
14. Notice of Balance Reduction |
15 | |||
15. Miscellaneous |
15 | |||
15.1 Waiver |
15 | |||
15.2 Invalidity; Separability |
15 | |||
15.3 No Authority |
15 | |||
15.4 Assignment |
15 | |||
15.5 Benefit |
15 | |||
15.6 Time |
15 | |||
15.7 Governing Law; Waiver of Jury Trial |
15 | |||
15.8 Entire Agreement; Amendments |
15 | |||
15.9 Notices |
16 | |||
15.10 Counterparts |
16 | |||
15.11 Captions |
16 | |||
15.12 Right to Consult Counsel |
16 | |||
15.13 Force Majeure |
17 |
| EXHIBITS | ||
Exhibit A |
Form of Disbursement Agent’s Closing Certificate | |
Exhibit B-1 |
Form of Facilities Disbursement Request | |
Exhibit B-2 |
Form of Advance Disbursement Request |
ii
THIS DISBURSEMENT AGREEMENT (as amended, supplemented or otherwise modified from time to time,
this “Agreement”), dated as of December 30, 2005, is made by and among ▇▇▇▇▇ Fargo Bank,
National Association, as trustee (together with its successors and assigns, in such capacity, the
“Trustee”) under the Indenture (as defined below), ▇▇▇▇▇ Fargo Bank, National Association,
as disbursement agent (together with its successors and assigns, in such capacity, the
“Disbursement Agent”), and IdleAire Technologies Corporation, a Delaware corporation (the
“Issuer”).
R
E C I T A L S
A. Units. The Issuer has issued 320,000 units (the “Units”), consisting of
$320,000,000 aggregate principal amount of 13% Senior Secured Discount Notes due 2012 (the
“Discount Notes”) and 320,000 warrants to purchase shares of common stock, par value $0.001
per share of the Issuer. The Discount Notes have been issued pursuant to the provisions of an
indenture (as amended, supplemented or otherwise modified from time to time, the
“Indenture”), dated as of the date hereof, among the Issuer and the Trustee, on behalf of
itself and the holders of the Discount Notes, and ▇▇▇▇▇ Fargo Bank, National Association, as
collateral agent (in such capacity, the “Collateral Agent”). An amount equal to TWO
HUNDRED ONE MILLION FIVE HUNDRED EIGHTY-THREE THOUSAND DOLLARS ($201,583.00) (the “Disbursement
Amount”) of the net proceeds from the issuance of Units will be deposited contemporaneously
with the execution of this Agreement into Account No. ▇▇▇▇▇▇▇▇▇▇ held by the Disbursement Agent
(said account, or any substitute account selected in accordance with the terms of this Agreement,
is referred to herein as the “Disbursement Account”), to be maintained by the Disbursement
Agent pursuant to Section 2 of this Agreement.
B. Collateral and Collateral Assignment. As security for its obligations under the
Discount Notes and the Indenture, the Issuer has granted a Lien (as defined below) on and security
interest in certain assets of the Issuer to the Collateral Agent under a security agreement, dated
as of the date hereof (the “Security Agreement”), for the benefit of the Trustee and the
holders of Discount Notes. The Lien granted to the Collateral Agent under the Security Agreement
includes a security interest in the Disbursement Account, the Disbursed Funds Account (as defined
below), amounts and other assets or investments credited thereto or deposited therein, and proceeds
therefrom.
C. Purpose. The parties intend that portions of the Disbursement Amount and the other
amounts on deposit from time to time in the Disbursement Account shall be used for the development,
construction, maintenance and operation of the Facilities (as defined below) (the “Facilities
Rollout”), general corporate and other operating expenses, all in accordance with this
Agreement and the Indenture. The parties have entered into this Agreement to set forth the
conditions upon which, and the manner in which, funds will be disbursed from the Disbursement
Account.
A G R E E M E N T
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions.
1.1 Defined Terms. In this Agreement the terms defined in this Section 1
shall have the meanings herein specified:
“Advance Disbursement” means a disbursement from the Disbursement Account to the
Issuer pursuant to and Advance Disbursement Request.
“Advance Disbursement Request” means an Officer’s Certificate from the Issuer in the
form of Exhibit B-2 attached hereto.
“Business” means the businesses engaged in by the Issuer on the Issue Date as
described in the Memorandum and businesses that are reasonably related thereto or reasonable
extensions thereof.
“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in New York, New York are authorized or obligated by law or
executive order to close.
“Construction Documents” means any Contract entered into by the Issuer on, prior to or
after the Issue Date with respect to construction of all or any portion of the Facilities to be
included in the Facilities Rollout (other than the Financing Agreements and the documents
evidencing or securing the Credit Agreement), as the same may be amended from time to time.
“Contract” means a contract to which the Issuer is a party pertaining to the
Facilities Rollout, including any contract, license and performance and payment bond or guarantee,
if any; provided, that such term shall not include the Financing Agreements or any of the
documents evidencing or securing the Credit Agreement.
“Cost Schedule” means an itemized schedule in the form of Schedule 1 to a
Facilities Disbursement Request, a form of which is attached hereto as Schedule 1 to
Exhibit B-1.
“Default” means any event, omission or failure of a condition that is, or with the
passage of time or the giving of notice or both could be, an Event of Default.
“Disbursed Funds Account” means an account to be designated by the Issuer from time to
time, in the name of the Issuer, or any substitute account selected in accordance with this
Agreement, which account shall be funded by disbursements from the Disbursement Account pursuant to
this Agreement, shall be pledged as collateral to the Collateral Agent pursuant to the Security
Agreement and subject to an account control agreement, in form sufficient to perfect the Collateral
Agent’s Lien on such account and from which the Issuer shall have general check writing authority
to pay amounts identified in the Disbursement Request to which the funds then on deposit in such
account relate.
“Disbursement Agent’s Closing Certificate” is an Officer’s Certificate from the
Disbursement Agent in the form of Exhibit A attached hereto.
“Disbursement Request” means any Facilities Disbursement Request or Advance
Disbursement Request.
“Expenses” means expenses incurred in connection with the design, development,
engineering, construction, installation, equipping and commencement of the Facilities Rollout or
general corporate and other operating expenses of the Issuer.
“Facilities” means the ATE™ system network to be built at approximately 160 travel
center sites and at approximately 50 fleet terminal sites with the proceeds of the sale of the
Units, as described in the Memorandum.
“Facilities Disbursement” means a disbursement from the Disbursement Account to the
Issuer pursuant to a Facilities Disbursement Request.
“Facilities Disbursement Request” means an Officer’s Certificate from the Issuer in
the form of Exhibit B-1 attached hereto.
“Financing Agreements” means, collectively, this Agreement, the Indenture, the
Collateral Agreements, the Registration Rights Agreement, the Warrant Agreement, the Discount
Notes, the Warrants and any other loan or security agreement entered into on, prior to or after the
Issue Date with or for the benefit of the Trustee to finance the Facilities Rollout or any portion
thereof, as each of the same may be amended from time to time as permitted thereunder and in
accordance with the terms and conditions of this Agreement.
“Governmental Authority” means any federal, state, local and other governmental
authority, governmental or regulatory agency or body, court, arbitrator or self-regulatory
organization, domestic or foreign.
“Moody’s” means ▇▇▇▇▇’▇ Investors Service, Inc., and its successors; provided,
that any reference to a particular rating by Moody’s shall be construed to apply to the
corresponding rating of any successor.
“Officer’s Certificate” means a certificate signed by one of the following officers of
the Person on whose behalf or for whose benefit the certificate is being executed or delivered: the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Information
Officer, Senior Vice President or Executive Vice President.
“Other Eligible Investments” means short-term, U.S. dollar-denominated, fixed-income
securities (or other non-equity securities with debt-like characteristics, which pay on a fixed or
floating rate basis) comprised of any of the following:
(1) direct non-callable obligations of states or municipalities of the United States of
America rated in the highest rating category of S&P or Moody’s;
(2) auction rate notes and structured notes rated in the highest rating category of S&P
or Moody’s; and
(3) bonds and notes maturing no more than 180 days from the date of creation thereof
issued by a corporation that is not the Issuer or an Affiliate of the Issuer, and is
organized under the laws of any State of the United States of America or the District of
Columbia and rated in the highest rating category of S&P or Moody’s.
“Responsible Officer” when used with respect to the Disbursement Agent, means an
officer or assistant officer assigned to the corporate trust department of the Disbursement Agent
(or any successor group of the Disbursement Agent) with direct responsibility for the
administration of this Disbursement Agreement and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred because of his knowledge
of and familiarity with the particular subject.
“Retainage Amounts” means, at any given time, amounts which have accrued and are owing
under the terms of a Contract for work or services to the Issuer already provided but which at such
time (and in accordance with the terms of the Contract) are being withheld from payment to the
respective Contractor until certain subsequent events (e.g., completion benchmarks or required to
release to a subcontractor) have been achieved under the Contract.
“S&P” means Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., and its successors; provided, that any reference to a particular rating by
S&P shall be construed to apply to the corresponding rating of any successor.
“Supporting Documentation” means, with respect to any Disbursement Request, the
information and documentation required to be provided pursuant to Sections 4.5 and
4.6.
“Undocumented Advance Disbursements” shall mean all Advance Disbursements for which
Supporting Documentation is required, in accordance with Sections 4.5 and 4.6, but
for which Supporting Documentation has not yet been received and verified by the Disbursement
Agent.
1.2 Additional Defined Terms. In addition, the terms listed below in the left column
below shall have the respective meanings assigned to such terms in the Section of this Agreement
listed opposite such terms in the right column below. All other capitalized terms not defined
herein, but defined in the Indenture, shall have the meanings ascribed to them in the Indenture.
| Defined Terms | Section | |
Agreement |
Preamble | |
Collateral Agent |
Recital B | |
Disbursement Account |
Recital A | |
Disbursement Agent |
Preamble | |
Disbursement Amount |
Recital A | |
Discount Notes |
Recital A |
| Defined Terms | Section | |
Event of Default |
7 | |
Excess Disbursement Amount |
4.4 | |
Facilities Rollout |
Recital C | |
Indenture |
Recital A | |
Issuer |
Preamble | |
Security Agreement |
Recital B | |
Trustee |
Preamble | |
Units |
Recital A |
1.3 Rules of Interpretation. The following rules of interpretation shall apply
herein.
1.3.1 Definitions in the singular includes the plural, and definitions in the plural includes
the singular.
1.3.2 The word “or” is not exclusive.
1.3.3 A reference to a Person includes its permitted successors and permitted assigns.
1.3.4 Accounting terms have the meanings assigned to them by GAAP, as applied by the
accounting entity to which they refer.
1.3.5 The words “include,” “includes” and “including” are not limiting.
1.3.6 A reference in a document to an Article, Section, Exhibit, Schedule is to the Article,
Section, Exhibit, Schedule, Annex or Appendix of such document unless otherwise indicated.
Exhibits, Schedules, Annexes or Appendices to any document shall be deemed incorporated by
reference in such document.
1.3.7 References to any document, instrument or agreement (a) shall include all exhibits,
schedules and other attachments thereto, (b) shall include all documents, instruments or agreements
issued or executed in replacement thereof and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time
to time and in effect at any given time.
1.3.8 The words “hereof,” “herein” and “hereunder” and words of similar import when used in
any document shall refer to such document as a whole and not to any particular provision of such
document.
1.3.9 References to “days” shall mean calendar days, unless the term “Business Days” shall be
used.
2. Establishment of the Disbursement Account.
2.1 Appointment of Disbursement Agent. The Trustee and the Issuer hereby appoint
▇▇▇▇▇ Fargo Bank, National Association as the Disbursement Agent hereunder, and ▇▇▇▇▇ Fargo Bank,
National Association hereby accepts such appointment, upon the terms and conditions set forth in
this Agreement. The Disbursement Agent agrees to act in good faith at all times herein.
2.2 Establishment of the Disbursement Account. Concurrently with the execution and
delivery hereof, the Disbursement Agent shall (a) establish the Disbursement Account and confirm
the establishment of the Disbursed Funds Account with the Company, which Disbursed Funds Account
shall be subject to an account control agreement pursuant to the Security Agreement and (b) credit
thereto, in accordance with the provisions of Recital A hereof, the Disbursement Amount;
provided, that if the Disbursement Account or the Disbursed Funds Account are maintained at
an Affiliate, an account control agreement sufficient to perfect the Collateral Agent’s Lien on
such account(s) shall be established contemporaneously with the creation and funding of such
account(s). All funds in the Disbursement Account and the Disbursed Funds Account shall be held in
trust and not commingled with any deposit or commercial bank account. All funds accepted by the
Disbursement Agent pursuant to this Agreement shall be held in the Disbursement Account or
Disbursed Funds Account for the account of the Issuer, subject to the terms and conditions of this
Agreement and the Collateral Agreements. The Disbursement Agent may, upon the written request of
the Issuer, establish sub-accounts for accounting purposes within the Disbursement Account and the
Disbursed Funds Account, it being understood and agreed that the creation of such sub-accounts
shall in no way affect the pledge in favor of the Collateral Agent in the Disbursement Account and
the Disbursed Funds Account under the Security Agreement and that the Lien of the Collateral Agent
over such sub-accounts shall be perfected at all times.
2.3 Security Agreement. The Disbursement Agent or its Affiliate, if applicable, shall
note in its records that all funds and other assets in the Disbursement Account and the Disbursed
Funds Account have been pledged to the Collateral Agent and that the Disbursement Agent or its
Affiliate, if applicable, is holding such items as agent for the Collateral Agent, as secured
party. The Disbursement Agent or its Affiliate, if applicable, shall maintain dominion and control
over the Disbursement Account and the Disbursed Funds Account and the funds and assets therein
solely for the benefit of the Collateral Agent, as secured party, and for no other parties or
Persons; provided, that the Issuer shall be able to obtain disbursements from the
Disbursement Account and the Disbursed Funds Account in accordance with the terms hereof, and upon
application thereof by the Issuer as provided in the relevant Disbursement Request, such pledge and
security interest shall be extinguished and released automatically and without further action with
respect to the amount so applied. Accordingly, it is the intention of the parties that all such
funds and assets shall not be within the bankruptcy “estate” (as such term is used in 11 U.S.C. §
541, as amended) of the Disbursement Agent. All such funds and all earnings accruing from time to
time thereon shall be held in the Disbursement Account and the Disbursed Funds Account until
disbursed or transferred in accordance with the terms hereof or until transferred to such other
account as the Trustee and the Issuer may jointly direct the Disbursement Agent to establish.
2.4 Investment of Funds in the Disbursement Account. All amounts from time to time on
deposit in or credited to the Disbursement Account shall be invested only in cash, Cash
Equivalents, U.S. Government Obligations or Other Eligible Investments from time to time by written
instructions given by an Officer of the Issuer, or a Person authorized in writing by an Officer of
the Issuer to give such instructions, delivered to the Disbursement Agent, pending disbursement of
such funds pursuant to this Agreement. From time to time, if investment instructions are not
received by the Disbursement Agent (i) within two (2) days of the date hereof, (ii) one day prior
to the maturity of an investment in the Disbursement Account or (iii)
after the occurrence and during a continuance of a Default or Event of Default, as the case
may be, such funds shall not be reinvested by the Disbursement Agent unless the Disbursement Agent
shall have received prior written instructions from the Company for the reinvestment of such funds
in such circumstances or is otherwise directed by the Collateral Agent pursuant to the Security
Agreement. The Disbursement Agent shall not be liable for any investment, reinvestment or similar
losses, fees, taxes or charges or for the availability or liquidity of funds in the Disbursement
Account as a result of any investments made or reduced to cash in accordance with this Agreement,
and the Disbursement Agent is hereby authorized to direct the relevant financial institution in
writing (i) to purchase Cash Equivalents, U.S. Government Obligations or Other Eligible Investments
in accordance herewith and (ii) to reduce to cash any Cash Equivalents, U.S. Government Obligations
or Other Eligible Investments (without regard to maturity) in the Disbursement Account in order to
make any application or disbursement required hereunder.
2.5 Agency. The Disbursement Agent shall act solely as the Trustee’s agent in
connection with its duties under this Agreement, notwithstanding any other provision contained
herein, without any authority to obligate the Trustee outside of the scope of the authority set
forth in this Agreement or to compromise or pledge the Collateral Agent’s security interest in the
Disbursement Account, the Disbursed Funds Account, amounts and other assets or investments credited
thereto or deposited therein, and proceeds therefrom; provided, that the Disbursement Agent
is authorized to make disbursements from the Disbursement Account on behalf of the Trustee pursuant
to the terms of this Agreement. The Issuer acknowledges and agrees that in no event shall the
Trustee or the holders of the Discount Notes be liable for, nor shall the obligations of the Issuer
under the Indenture, the Discount Notes or the other Collateral Agreements be affected or
diminished as a consequence of, any action or inaction of the Disbursement Agent with respect to
the Disbursement Account, the Disbursed Funds Account, amounts and other assets or investments
credited thereto or deposited therein, and proceeds therefrom.
2.6 Waiver of Set-off Rights. The Disbursement Agent hereby acknowledges the
Collateral Agent’s security interest as set forth in this Agreement and the Collateral Agreements.
The Disbursement Agent hereby waives any and all Liens, claims, encumbrances and rights of set off
which it may have in the Disbursement Account, the Disbursed Funds Account, amounts and other
assets or investments credited thereto or deposited therein, and proceeds therefrom, including all
rights of set-off, deductions and Liens, whether statutory or otherwise afforded by law, agreement
or otherwise set forth herein against said accounts, amounts, assets or investments now or in the
future against any indebtedness of the Issuer to the Disbursement Agent. The waivers set forth in
this Section 2.6 are of rights which may exist now or hereafter in favor of the
Disbursement Agent in its individual capacity, and not of any such rights which may exist now or
hereafter in favor of the Disbursement Agent in its capacity as agent for the Trustee. Nothing in
this Section 2.6 shall be construed as waiving, limiting or diminishing any rights of the
Trustee or the Issuer against the Disbursement Agent or one another.
2.7 Transfer of Funds to the Trustee. Upon the receipt of written notice executed by
the Trustee, stating that (a) an Event of Default hereunder has occurred and is continuing and (b)
the Trustee is entitled to all amounts and other assets or investments credited to or deposited in
the Disbursement Account and the Disbursed Funds Account, and proceeds therefrom (a copy of which
notice shall be sent to the Issuer concurrently therewith), the Disbursement Agent shall,
without need for further authorization or notice to the Issuer, deliver to the Trustee all
amounts and other assets or investments credited to or deposited in the Disbursement Account and
the Disbursed Funds Account, and proceeds therefrom, other than amounts the Trustee has directed
the Disbursement Agent to disburse under clauses (i) and (ii) of Section
6.3 hereof.
3. Disbursement Agent’s Compensation. All fees and expenses of the Disbursement Agent
incurred in the ordinary course of performing its responsibilities hereunder (including the
reasonable fees or expenses of Disbursement Agent’s outside counsel attributable to the negotiation
of this Agreement) shall be paid by the Company under a separate fee letter agreement. The Company
shall pay the Disbursement Agent’s customary fees and expenses in connection with investments made
by Disbursement Agent pursuant to Section 2.4. Any extraordinary fees and expenses,
including any fees or expenses (including the fees or expenses of outside counsel to the
Disbursement Agent) incurred by the Disbursement Agent in connection with a dispute over the
disbursement of amounts on deposit in the Disbursement Account or the Disbursed Funds Account or
otherwise shall be paid promptly by the Company upon receipt of a written invoice from the
Disbursement Agent. The provisions of this Section 3.3 shall survive the termination of
this Agreement.
4. Disbursement Requests and Disbursements.
4.1 The Issuer shall have the right from time to time during the course of this Agreement (but
no more frequently than once per calendar month) to submit to the Disbursement Agent, with a copy
to the Trustee, a Facilities Disbursement Request or an Advance Disbursement Request. The
Disbursement Agent shall disburse funds from the Disbursement Account only upon (i) in the case of
a Facilities Disbursement, receipt of a fully complete and executed Facilities Disbursement
Request, substantially in the form attached hereto as Exhibit B-1 together with all
schedules and/or exhibits thereto, and confirmation that the amount of the Facilities Disbursement
Request is consistent with the total amount of the Supporting Documentation, and (ii) in the case
of an Advance Disbursement, receipt of a fully complete and executed Advance Disbursement Request,
substantially in the form attached hereto as Exhibit B-2 together with all schedules and/or
exhibits thereto.
4.2 Upon receipt of each Disbursement Request submitted pursuant to Section 4.1, the
Disbursement Agent shall determine whether such Disbursement Request meets the requirements set
forth in Sections 4.1 and 4.5. The Disbursement Agent shall notify the Issuer and
the Trustee as soon as reasonably practicable (and in any event within one (1) Business Day after
the Disbursement Agent receives the required documents, if received before 12:00 p.m. (Minneapolis
time) on such day, and otherwise, within two (2) Business Days after such receipt) if any
Disbursement Request, or any portion thereof, is disapproved and the reason(s) therefor.
4.3 (a) Provided that a Disbursement Request is received by the Disbursement Agent by 12:00
p.m. (Minneapolis time) and is approved by the Disbursement Agent in accordance with this
Agreement, then, within one (1) Business Day following receipt of such Disbursement Request, the
Disbursement Agent shall disburse to the Disbursed Funds Account the funds requested in such
Disbursement Request, or such portion thereof as is approved by the Disbursement Agent, in either
case subject to adjustment in accordance with Section 4.4 below.
(b) If such Disbursement Request is received after 12:00 p.m. (Minneapolis time) and is
approved by the Disbursement Agent in accordance with this Agreement, then, within two (2) Business
Days following receipt of such Disbursement Request, the Disbursement Agent shall disburse to the
Disbursed Funds Account the funds requested in such Disbursement Request, or such portion thereof
as is approved by the Disbursement Agent, in either case subject to adjustment in accordance with
Section 4.4 below
(c) The Issuer shall withdraw funds from and write checks on the Disbursed Funds Account
solely for the purpose of paying Expenses identified on such Disbursement Request.
4.4 (a) Concurrently with each Facilities Disbursement Request, the Issuer shall provide all
Supporting Documentation to the Disbursement Agent. Within thirty (30 days) following the receipt
of such Supporting Documentation from the Issuer, the Disbursement Agent shall review such
Supporting Documentation and compare it to the Disbursement Request to which such Supporting
Documentation relates. If the Disbursement Agent determines that the amount disbursed pursuant to
such Disbursement Request exceeds by the lesser of (x) $1.0 million or (y) 10% the amount which
should have been disbursed pursuant to such Disbursement Request based upon such Supporting
Documentation provided by the Issuer (such excess, the “Excess Disbursement Amount”), then
(i) the Disbursement Agent shall notify the Trustee and the Issuer of such determination in writing
and (ii) the Issuer shall promptly return such Excess Disbursement Amount to the Disbursement Agent
for deposit in the Disbursement Account, and the Disbursement Agent shall not make any further
disbursements hereunder until receipt of amounts representing such Excess Disbursement Amount from
the Issuer.
(b) Within thirty (30) days following each Advance Disbursement Request (or, if earlier,
promptly following the occurrence of a Default or an Event of Default), the Issuer shall provide
all Supporting Documentation to the Disbursement Agent. Within thirty (30 days) following the
receipt of such Supporting Documentation from the Issuer, the Disbursement Agent shall review such
Supporting Documentation and compare it to the Disbursement Request to which such Supporting
Documentation relates. If the Disbursement Agent determines that the amount disbursed pursuant to
such Disbursement Request exceeds by the lesser of (x) $1.0 million or (y) 10% the amount which
should have been disbursed pursuant to such Disbursement Request based upon such Supporting
Documentation provided by the Issuer, then (i) the Disbursement Agent shall notify the Trustee and
the Issuer of such determination in writing and (ii) the Disbursement Agent shall deduct the Excess
Disbursement Amount from the amount of funds disbursed pursuant to the next Disbursement Request
received by the Disbursement Agent. In no event shall the outstanding balance of Undocumented
Advance Disbursements from the Disbursement Account at any time exceed $10,000,000.
4.5 Concurrently with each Facilities Disbursement Request and within thirty (30) days after
each Advance Disbursement Request, the Issuer shall deliver or cause to be delivered to the
Disbursement Agent true and complete copies of invoices or purchase orders that have been tendered
for all costs, that, individually, exceed $10,000, for which disbursement is or was requested under
such Disbursement Request (provided, that the aggregate amount of invoices, purchase orders
or Contracts omitted from being provided to the Disbursement Agent by virtue of this Section
4.5 shall not exceed $250,000 in any one Disbursement Request).
4.6 (a) With respect to the Supporting Documentation of each Disbursement Request, the Issuer
shall submit a schedule that accurately lists each party for whom payment is requested and the
following, as applicable: (i) the name of the payee to be paid; (ii) the current payment requested;
(iii) the increase or decrease in accrued but unpaid Retainage Amount, if any, for such payee since
the last Disbursement Request (after giving effect to the payment contemplated by such Disbursement
Request); (iv) the total amount contemplated to be payable to such payee under the terms of its
applicable Contract or other agreement through completion of all work and delivery of all materials
contemplated by the Contract or other agreement (i.e., the total contract amount); (v) the
aggregate accrued Retainage Amounts which shall continue to be owed with respect to such Contract
or other agreement (after giving effect to the payment contemplated by such Disbursement Request);
or, if payment is to be made based on invoice or purchase order, confirmation that a copy of the
applicable invoice or purchase order is attached, and a description of the purpose of such payment;
and (vi) the total amount of the Disbursement Request represented by invoices or purchase orders
that do not, individually, exceed $10,000, or in the aggregate, exceed $250,000. The information
set forth in such schedules shall be true, accurate and complete.
(b) Any schedule contemplated under this Section 4.6 or elsewhere under this Agreement
shall be submitted to the Disbursement Agent in the form of a Microsoft Excel spreadsheet (or
similar schedule in a form agreed by the parties hereto) and shall be made available
electronically.
5. Representations and Warranties.
5.1 Officer’s Certificate as Representation and Warranty. Each Officer’s Certificate
signed on behalf of the Issuer and delivered to the Disbursement Agent and/or the Trustee pursuant
to, or in connection with, this Agreement, shall be deemed to be a representation and warranty by
the Issuer to the Disbursement Agent and/or the Trustee, as the case may be, as to the matters
covered by such certificates.
6. Disbursement Account.
6.1 Conditions to Disbursements. Upon satisfaction of the conditions described in
this Section 6.1 and in Section 4.1, the Disbursement Agent shall make the
disbursements described in the corresponding Disbursement Request from the Disbursement Account to
the Disbursed Funds Account:
(a) The Disbursement Agent shall have received the Disbursement Amount;
(b) The Disbursement Agent shall have delivered the Disbursement Agent’s Closing Certificate
to the Trustee and the Issuer, and each such document shall have been executed and completed as to
the information required therein, and the required exhibits and attachments, if any, shall be
attached thereto;
(c) The Disbursement Agent shall have received confirmation from the Issuer that the Disbursed
Funds Account has been established and a control agreement entered into with respect thereto;
(d) The Issuer shall have submitted to the Disbursement Agent and the Trustee a Disbursement
Request, pursuant to the requirements of Section 4, that shall have been executed and
completed as to the information required therein, and the required schedules, exhibits and
attachments, if any, shall be attached;
(e) The Disbursement Agent shall not have notice that a Default or Event of Default has
occurred and remains continuing; and
(f) The Issuer shall have certified that any amounts deposited into the Disbursed Funds
Account pursuant to any previous Disbursement Requests (other than Advance Disbursements permitted
to be outstanding under this Agreement) shall have been paid to the respective parties (i)
identified on Schedule 1 of each such previous Facilities Disbursement Request or (ii) subsequently
identified by the Issuer to the Disbursement Agent in a schedule or schedules included in the
Supporting Documentation submitted in accordance with Section 6.2 below, except for such
limited payments relating to amounts deposited in the Disbursed Funds Account pursuant to any and
all previous Disbursement Requests withheld by the Issuer for good cause and set forth on Schedule
2 to a Facilities Disbursement Request or Schedule 1 to an Advance Disbursement Request, as
applicable (together with a brief explanation as to why such payment has been withheld).
6.2 Advance Disbursements. Advance Disbursement Requests shall not be required to
include any Supporting Documentation; provided, that (i) within thirty (30) days after any
Advance Disbursement is made (or, if earlier, promptly following the occurrence of a Default or an
Event of Default), the Issuer shall, with respect to such Advance Disbursement, provide the
Supporting Documentation. In no event shall the outstanding balance of Undocumented Advance
Disbursements from the Disbursement Account at any time exceed $10,000,000. Concurrently with all
Disbursement Requests, the Issuer shall provide a Microsoft Excel spreadsheet (or similar schedule
in a form agreed by the parties hereto) setting forth all Undocumented Advance Disbursements.
6.3 Disbursements after an Event of Default. In the event that a Default or Event of
Default exists and is continuing, the Disbursement Agent shall not approve any disbursement of
funds pursuant to a Disbursement Request; provided, that the following payments can be made
(and provided further, that nothing in this Section 6.3 shall limit the Trustee’s
right to the disbursement of funds from the Disbursement Account pursuant to Section 2.7):
| (i) | if all other conditions in Section 6.1 are met, funds from the Disbursement Account may be disbursed for work completed or materials purchased on or prior to the date that such Default or Event of Default first occurred; and | ||
| (ii) | if such condition continues for a period of three (3) consecutive months or more, at the written request of the Issuer, funds from the Disbursement Account may be disbursed to pay Retainage Amounts for work completed; provided, that the Issuer certifies to the Disbursement Agent and the Trustee in writing the amount required to be paid for such Retainage Amounts and that the conditions for paying such amounts are met. |
7. Events of Default. The occurrence of any of the following specified events shall be an
“Event of Default” hereunder:
7.1 Indenture. A Default or an Event of Default under the Indenture (as such terms
are defined therein) has occurred and is continuing, in either case beyond the expiration of
applicable notice, grace and cure periods.
7.2 Performance of Certain Obligations. The failure of Issuer to perform, observe or
comply in all material respects with any of its obligations under this Agreement and such failure
continues for a period of thirty (30) days after notice thereof without being cured.
7.3 Abandonment of Facilities Rollout or Business. The Issuer shall cease (i) to use
the amounts on deposit from time to time in the Disbursement Account for the Facilities Rollout,
general corporate and other operating expenses, in accordance with the terms of this Agreement and
the Indenture or (ii) to operate the Business or shall sell or otherwise dispose of any material
interest in the Business.
8. Disbursed Funds Account.
8.1 Rights of the Issuer to Disbursed Funds Account. All amounts disbursed from the
Disbursement Account shall be paid directly to the Disbursed Funds Account. The Disbursed Funds
Account shall be designated by the Issuer from time to time and maintained in the name of the
Issuer and all funds deposited or held in such account shall belong to the Issuer, subject to the
Lien of the Collateral Agent, against which the Issuer may draw for expenditures permitted by this
Agreement from time to time. All funds deposited and held in the Disbursed Funds Account shall,
pending disbursement in accordance with this Agreement, be invested in cash or Cash Equivalents as
directed by the Issuer, except as otherwise provided herein or in the Security Agreement. Funds in
the Disbursed Funds Account shall be disbursed solely in accordance with the terms and conditions
of, and solely for the purposes permitted under, this Agreement (including the Disbursement Request
to which such funds originally relate) and the Indenture.
8.2 Right to Substitute Disbursed Funds Account. The Issuer from time to time shall
have the right to designate a substitute account to serve as the Disbursed Funds Account;
provided, that no such substitute account shall become the “Disbursed Funds Account” until
(a) the depository financial institution at which the substitute account is located shall have
acknowledged in a manner satisfactory to the Trustee that such institution has waived its right of
set off in such account or any Liens thereto, statutory or otherwise, and will have entered into an
account control agreement sufficient to perfect the Collateral Agent’s Lien on and security
interest in such account, and (b) the Trustee shall have received written notice of the location
and account number of such new substitute account.
9. Limitation of Liability. The Disbursement Agent’s responsibility and liability under
this Agreement shall be limited as follows: (a) the Disbursement Agent does not represent, warrant
or guaranty to the Trustee or the holders of the Discount Notes the performance by the Issuer, any
contractor or provider of materials or services in connection with the Facilities Rollout; (b) the
Disbursement Agent shall have no responsibility to the Issuer, the Trustee or the holders of the
Discount Notes as a consequence of performance by the Disbursement Agent hereunder, except
as a result of gross negligence or willful misconduct by the Disbursement Agent; (c) the Issuer
shall remain solely responsible for all aspects of the Business and the implementation and
completion of the Facilities Rollout, the accuracy of all applications for payment, and the proper
application of all disbursements; (d) the Disbursement Agent is not obligated to supervise, inspect
or inform the Issuer, the Trustee or any third party of any aspect of the Facilities Rollout; and
(e) except as set forth herein, the Disbursement Agent owes no duty of care to the Issuer, to
protect against, or to inform the Issuer of, any negligent, faulty, inadequate or defective design
or construction of the Facilities or otherwise. The Disbursement Agent shall have no duties or
obligations hereunder, except as expressly set forth herein, shall be responsible only for the
performance of such duties and obligations, shall not be required to take any action otherwise than
in accordance with the terms hereof and shall not be in any manner liable or responsible for any
loss or damage arising by reason of any act or omission to act by it hereunder or in connection
with any of the transactions contemplated hereby, including, but not limited to, any loss that may
occur by reason of forgery, false representations, the exercise of its discretion, or any other
reason, except as a result of its gross negligence or willful misconduct.
10. Indemnity. The Issuer hereby indemnifies, protects, holds harmless and agrees to
defend the Disbursement Agent and each of its officers, directors, agents and employees, from and
against any and all claims, actions, obligations, liabilities and expenses, including defense
costs, investigative fees and costs, legal fees, and claims for damages, arising from the
disbursement of funds pursuant to a Disbursement Request, the performance by the Disbursement Agent
under this Agreement, arising from the Disbursement Agent’s reliance on any Officer’s Certificate
delivered by the Issuer under this Agreement or arising from any material error, inaccuracy,
misstatement or omission of fact therein, except to the extent that such liability, expense or
claim is attributable to the gross negligence or willful misconduct of the Disbursement Agent. The
provisions of this Section 10 shall survive the termination of this Agreement or the
removal or resignation of the Disbursement Agent.
11. Termination. This Agreement shall terminate automatically thirty (30) days following
such time as all amounts in the Disbursement Account and the Disbursed Funds Account have been
distributed pursuant to and in accordance with the terms hereof; provided, that the
obligations of the Issuer under Sections 3.3 and 10 of this Agreement shall survive
termination of this Agreement.
12. Substitution or Resignation.
12.1 Disbursement Agent. The Disbursement Agent may be removed by the Issuer or may
resign hereunder with the prior approval of the Issuer and the Trustee. A resignation or removal
of the Disbursement Agent and appointment of a successor Disbursement Agent shall become effective
only upon the successor Disbursement Agent’s acceptance of appointment as provided in this
Section 12.1.
12.1.1 After obtaining the consent of the Issuer, the Disbursement Agent may resign in writing
at any time and be discharged from all duties hereunder upon 30 days’ written notice to all parties
hereto. The Trustee (if a different Person than the Disbursement Agent), at the request of a
majority in principal amount of the then outstanding Discount Notes, or the holders of a majority
in principal amount of the then outstanding Discount Notes, may remove
the Disbursement Agent upon 30 days written notice by so notifying the Disbursement Agent, the
Trustee and the Issuer.
12.1.2 If the Disbursement Agent resigns or is removed or if a vacancy exists in the office of
Disbursement Agent for any reason, the Disbursement Agent shall notify the Trustee of such within
five (5) Business Days and the Trustee shall notify the holders of the Discount Notes within five
(5) Business Days of its receipt of notice from the Disbursement Agent and the Trustee (if a
different Person than the Disbursement Agent) at the request of a majority in principal amount of
the then outstanding Discount Notes, shall, and the holders of a majority in principal amount of
the then outstanding Discount Notes (if such holders provided a notice pursuant to Section
12.1.1 or if there is no Trustee capable of acting at such time) may, promptly appoint a
successor Disbursement Agent reasonably acceptable to the Issuer. Within one year after any
successor Disbursement Agent appointed by the Trustee takes office, the holders of a majority in
principal amount of the then outstanding Discount Notes may appoint a successor Disbursement Agent
reasonably acceptable to the Issuer to replace the Disbursement Agent appointed by the Trustee.
12.1.3 If a successor Disbursement Agent does not take office within 60 days after the
retiring Disbursement Agent resigns or is removed, the retiring Disbursement Agent, the Trustee,
the Issuer or the holders of at least 25% in principal amount of the then outstanding Discount
Notes may petition, at the expense of the Issuer, any court of competent jurisdiction for the
appointment of a successor Disbursement Agent.
12.1.4 A successor Disbursement Agent shall deliver a written acceptance of its appointment to
the retiring Disbursement Agent, the Issuer and the Trustee. Thereupon, the resignation or removal
of the retiring Disbursement Agent shall become effective, and the successor Disbursement Agent
shall have all the rights, powers and duties of the Disbursement Agent under this Agreement. The
retiring Disbursement Agent shall promptly transfer all property held by it as Disbursement Agent
to the successor Disbursement Agent.
12.1.5 If the Disbursement Agent consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation or association, the
successor corporation without any further act shall be the successor Disbursement Agent.
12.1.6 The Disbursement Agent shall at all times be a bank chartered under the laws of the
United States of America or of any state thereof that is authorized under such laws to exercise
corporate trust power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million as set forth in
its most recent published annual report of condition and a Thomson’s BankWatch rating of “B” or
better.
13. Account Statement. On the first business day of each and every calendar month, the
Disbursement Agent shall make available to the Issuer and the Trustee a statement prepared by the
Disbursement Agent in a form reasonably satisfactory to the Trustee and the Issuer, setting forth
with reasonable particularity the balance of funds then in each of the Disbursement Account and the
manner in which such funds are invested.
14. Notice of Balance Reduction. The parties hereto irrevocably instruct the Disbursement
Agent that on the first date upon which the balance of the Disbursement Account is reduced to zero,
the Disbursement Agent shall deliver to the Trustee and the Issuer a notice that the balance in
such account has been reduced to zero.
15. Miscellaneous.
15.1 Waiver. Any party hereto may specifically waive any breach of this Agreement by
any other party, but no such waiver shall be deemed to have been given unless such waiver is in
writing, signed by the waiving party and specifically designates the breach waived, nor shall any
such waiver constitute a continuing waiver of similar or other breaches.
15.2 Invalidity; Separability. If, for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative, unenforceable or invalid in
a particular case or in all cases, such circumstances shall not have the effect of rendering any of
the other provisions of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so as to effectuate, to
the maximum extent possible, the parties’ intent.
15.3 No Authority. Except as set forth herein, the Disbursement Agent shall have no
authority to, and shall not, make any warranty or representation or incur any obligation on behalf
of, or in the name of, the Trustee.
15.4 Assignment. This Agreement is personal to the parties hereto, and the rights and
duties of any party hereunder shall not be assignable except with the prior written consent of the
other parties hereto. In any event, this Agreement shall inure to and be binding upon the parties
and their successors and permitted assigns.
15.5 Benefit. The parties hereto, the holders from time to time of the Discount
Notes, and their respective successors and assigns, but no others, shall be bound hereby and
entitled to the benefits hereof.
15.6 Time. Time is of the essence of each provision of this Agreement.
15.7 Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to contracts made and to
be performed in the State of New York, including Sections 5-1401 and 5-1402 of the New York General
Obligations Law and New York Civil Practice Laws and Rules 327(b), but without regard to principles
of conflicts of laws.
Each of the Issuer, the Disbursement Agent and the Trustee hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transaction contemplated hereby.
15.8 Entire Agreement; Amendments. This Agreement (together with the Indenture and
the Collateral Agreements) contains the entire agreement among the parties with respect to the
subject matter hereof and supersedes any and all prior agreements, understandings and
commitments, whether oral or written. This Agreement may be amended only by a writing signed
by duly authorized representatives of all parties.
15.9 Notices. All notices and other communications required or permitted to be given
or made under this Agreement shall be in writing and shall be deemed to have been duly given and
received, regardless of when and whether received, either (a) on the day of hand delivery; (b) on
the date of confirmation of receipt of facsimile transmission; or (c) on the third day after sent,
when sent by United States certified mail, postage and certification fee prepaid, return receipt
requested, addressed as follows:
If to the Issuer:
IDLEAIRE TECHNOLOGIES CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Disbursement Agent or the Trustee:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
MAC N9303-120
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
MAC N9303-120
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the specified entity most recently may have designated in writing in
accordance with this paragraph to the other parties hereto. Any notice to the Disbursement Agent
or the Trustee under this Agreement shall be deemed effective only upon receipt.
15.10 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together shall constitute one and the same
instrument.
15.11 Captions. Captions in this Agreement are for convenience only and shall not be
considered, construed or given meaning in resolving questions of interpretation of this Agreement.
15.12 Right to Consult Counsel. Each of the Disbursement Agent and the Trustee may,
if any of them deems necessary or appropriate, consult with and be advised by counsel in respect of
their duties hereunder. Each of the Disbursement Agent or the Trustee shall be entitled to
conclusively rely upon the advice of its counsel in any action taken in its capacity as the
Disbursement Agent or the Trustee, as the case may be, hereunder and shall be protected from any
liability of any kind for actions taken in reasonable reliance upon such opinion of its counsel.
The Issuer agrees to pay all such reasonable counsel fees and expenses.
15.13 Force Majeure. In no event shall the Disbursement Agent be responsible or
liable for any failure or delay in the performance of its obligations hereunder arising out of or
caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages,
accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications
or computer (software and hardware) services; it being understood that the Disbursement Agent shall
use reasonable efforts which are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Disbursement Agreement
as of the date first above written.
| Very truly yours, IDLEAIRE TECHNOLOGIES CORPORATION |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | Chief Executive Officer | |||
| AGREED AND ACCEPTED: | ||||
| ▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION, as Disbursement Agent |
||||
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|||
| Title: Vice President | ||||
| ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as Trustee |
||||
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|||
| Title: Vice President | ||||